South Australia feed-in tariff recipients could lose benefit by installing energy storage

SA electricity distribution company South Australia Power Networks mentioned in a recently released ‘PV Process Update‘ (PDF) that anyone currently receiving one of the state’s solar feed-in tariffs (premium or transitional) could see their rates reduced if they install an energy storage system (either battery or fuel cell). This development is telling of both the rising interest in energy storage devices, as well as some of the adjustments that the electricity industry will undergo as distributed energy solutions such as rooftop solar and energy storage become more common.

Feed-in tariff rate reduction possible for current system owners who turn on energy storage

South Australia’s feed-in tariff rate has gone through several ‘tiers’ of generosity since the subsidy scheme was first introduced several years ago. Those who met the application deadline for each tier will continue to receive that rate until a set date in the future (either 30 June 2028 or 30 September 2016). Those who install a system now (i.e. after 30 September 2013) will be eligible to receive around 8-10c for each unit (kilowatt-hour, kWh) of their solar power that they export to the grid–a sharp reduction from the 44c/kWh or 23/kWh that they may be receiving under their current agreement. (Read more: Are solar panels worth it in South Australia in 2014?)

SA Power Networks’ new policy with regard to energy storage is not dissimilar to its policy on solar PV system expansion for feed-in tariff recipients: customers who add panels to an existing system will have their feed-in tariff reduced to the current rate on offer. This is true across most states (a notable exception being NSW). In both the case of considering solar panel array expansion or the addition of energy storage, customers will need to balance the financial benefits undertaking the change against the benefits that continuing to receive the feed-in tariff would afford them.

New solar system owners will be mostly unaffected

Importantly, SA Power Networks is not barring the installation of energy storage systems in any way, and the policy change will have no impact on new solar system/energy storage customers with regard to their feed-in tariff rate. For new solar customers, installing an energy storage system could potentially add value to the system, allowing greater flexibility with regard to when their self-generated electricity can be consumed. Solar system owners without energy storage must consume their electricity while the sun is shining (and the panels are generating power) or risk ‘wasting’ their electricity by exporting it to the grid.

Although SA Power Networks has a standardised process in place for solar systems to be connected to the grid, no such process yet exists for energy storage technology due to its relative novelty. Recognising that requests to connect energy storage systems to grid will only grow, SA Power Networks is in the process of developing a procedure. In the interim, the company has detailed the steps for getting an energy storage device approved for connection. Until the process has been determined, it appears that each energy storage unit will need to be inspected on a case-by-case basis.

Read more about SA Power Networks’ energy storage policy.

© 2013 Solar Choice Pty Ltd

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