Victoria’s Essential Services Commission has confirmed it will slash the feed-in tariff for solar power exported to the grid to 5c/kWh, starting January 01, 2016.
The ESC announced the decision in in a statement on Monday, less than a week after the Victorian Andrews government promised to fight network discrimination against the state’s rooftop solar households.
The ESC said it had come to this price by weighing up the marginal cost of the equivalent amount of electricity that would otherwise need to be purchased from central generators, as well as “the locational value of electricity produced close to the final consumers compared to relatively distant central generators.”
It said the energy value of PV electricity had been calculated as a weighted average of the forecast spot market prices for Victoria for each half-hour period of 2016, as prepared by ACIL Allen Consulting.
Ironically, the Commission also said part of its decision to go with the lower 5 cent rate, rather than the proposed 6.2c/kWh figure, was due to a lower forecast wholesale market price of electricity, particularly during daylight hours when PV electricity was being generated.
For many Victorian PV owners, the tariff cut amounts to a 20 per cent reduction to the rate they currently get for their exported solar generation.
“This decision delivers a transfer of wealth from solar PV owners to electricity retailers,” said Australian Solar Council chief John Grimes.
“Solar energy exported to the grid is sold to your neighbors at the full retail rate, often upwards of $0.25 per kilowatt-hour. So paying a solar owner $0.05 cents per kilowatt hour for that exported energy is simply unfair.”
Solar Citizens national director Claire O’Rourke said the ESC had got its decision wrong, and was sending a starkly different message to Victorians than the state government, which just last week announced a Renewable Energy Roadmap aimed at achieving a renewable energy target of no less than 20 per cent by 2020 and with the stated goal of promoting rooftop solar uptake, and protecting the rights of existing rooftop solar households.
“The slashing of the feed-in tariff by the ESC is extremely unfair and risks undermining increased renewable energy as part of Victoria’s energy mix,” O’Rourke said in a statement on Tuesday.
“The Victorian government has committed to a review determining what a fair price should be later this year, but this could be too little too late if the ESC feed-in tariff cuts get the green light.
© 2015 Solar Choice Pty Ltd