SA feed in tariff changes: Results from parliamentary debate

South Australia now offers a rate of 23c/kWh for solar energy exported to the grid. For the most up-to-date information on South Australia Solar Feed-in Tariff incentive rates, see the state-by-state Solar Feed-in Tariffs page.  You can also read articles about solar power policy and the economics of owning a solar PV system in SA on our South Australia Solar Feed-in Tariff page.

The South Australian Parliament has decided on what changes will be made to SA feed in tariff legislation. Some of the proposed changes to the SA feed-in tariff  that we wrote about previously will come into effect but others will not. The key news is that, although the feed in tariff will not be retroactively increased from 44c to 54c/kWh (the rate that had been advocated by the government since November last year), there will be an interim feed-in tariff rate of approximately 22c/kWh (16c government rebate plus an estimated electricity retailer contribution of 6-8c), guaranteed for those who sign up during the two years from 1 October, 2011.

This may, paradoxically, be good news for the solar power industry, which would prefer to avoid political backlash and accusations that it is the cause of an increase in electricity prices. The news is, however, still a disappointment to those who are currently taking part in or interested in signing up to take part in SA’s solar feed-in tariff scheme on the 44c/kWh rate. (The deadline for approved application of permission to connect in order to take advantage of the generous 44c/kWh feed in tariff rate is 30 September, 2011.)

The other important news with regard to the SA feed-in tariff changes is that there will be a transition scheme of 22c/kWh, available for those who sign up during the two year period starting from 1 October, 2011. 16c of this tariff will be government-subsidised, plus a 6c retailer contribution.)

While not ideal (the rate is virtually the same as a 1:1 net feed-in tariff), this is less than many advocates of solar and renewable energy had hoped for. It is not cause for despair, however, especially considering that the costs associate with residential solar power installations have been decreasing gradually as manufacturing capacity increases worldwide and infrastructure and technical expertise are amassed nationally in Australia. The goal of the solar feed-in tariff, after all, is to encourage the uptake of clean, renewable energy which is not otherwise cost-competitive with conventional, polluting fossil fuel-based generation systems (which do receive heavy subsidisation, both from governments and from the environment.)

The 22c/kWh transition scheme is also welcomed by the solar power industry; in the original proposed changes to the legislation, a jump to 54c/kWh for current recipients and pre-1 October applicants would have meant a sudden end to the scheme, and therefore rough financial straits for solar power installers who rely to a large degree on government incentives.

Mr Matthew Warren, Chief Executive of the Clean Energy Council, cautiously welcomed the government’s decision. œThis is important for South Australian consumers and the industry. There’s no doubt the industry is disappointed with the severity of the changes, but we are appreciative the Government was open to significantly improving its original legislation.

“Without these amendments there would have been a huge spike in demand for solar after the proposed increase in the feed-in tariff, followed by a big slump when it  ended later in this year.

œThis wouldn’t serve consumers or be conducive to industry best practice in South Australia. There are more than 1000 well-trained workers in the industry, which is a significant part of the local economy.”

The other changes to the SA feed-in tariff explained in our previous blog entry will come into effect as expected.

Written by James Martin

Analyst

© 2010 Solar Choice Pty Ltd

Resources and Links:

Clean Energy Council, personal communication and media release: “SA Solar – Bruised but not beaten”

Previous Solar Choice Blog Articles:

Proposed changes to SA feed-in tariff legislation :  Solar Power vs Coal: Government Subsidisation

 

James Martin II

Contributor at Solar Choice
James was Solar Choice's primary writer & researcher between 2010 and 2018.

He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.

James lives in Newcastle in a house with a weird solar system.
James Martin II