Tasmania feed-in tariff development: Current 27c/kWh rate to remain for 3 years?

It appears that Tasmanians who install solar panels under current feed-in tariff arrangements will continue to be eligible to receive the generous 27c per kilowatt-hour (kWh) rate for at least 3 years after state-owned utility Aurora Energy is sold off–up from the 2-year guarantee period originally discussed when the issue came up in the public discourse. Although a definitive answer about the destiny of the rate will not be announced until the end of the year, both Labour and Liberal parties in the state have signaled that the current offering should remain in place until at least 2017.

Attention Tasmania customers:

Deadline for applications for Tasmania’s solar feed-in tariff is 30 August 2013

Although this news brings a greater degree of certainty to both industry players as well as rooftop solar PV system owners (who now number over 12,500 in the state), it still leaves a big question as to what will happen after the 3-year period is up. Tasmanian Energy Minister Bryan Green, interviewed by the ABC, insisted that the rate will not drop below 8c/kWh, as it has in many other states after feed-in tariffs were cut back. Save our Solar Tasmania group member John Thirgood, was pessimistic about hopes for anything higher than this rate, however. saying, “The big retailers will get their way at the same price, on the mainland, which is eight cents.”

The Tasmanian solar feed-in tariff situation differs from feed-in tariff schemes in other states and territories in that it is not state-mandated. Instead, it is an arrangement through Tasmania’s state-owned utility company, Aurora Energy. Unlike state government-mandated feed-in tariffs, there is no application deadline, nor is the 27c/kWh rate specifically guaranteed for any period of time. Those who successfully applied for NSW‘s 60c/kWh gross feed-in tariff (which was closed to new applicants on 28 April 2011), for example, knew that they would be eligible to receive this rate until 2016; Queenslanders can expect to receive 44c/kWh rates until 2028.

Since no end date was ever specified in Tasmania’s case, many homes and businesses who invested in solar PV systems made the reasonable assumption that the 27c/kWh rate–or a comparable rate–would remain in place indefinitely. Having the 27c/kWh rate in place means that homes and businesses do not need to worry about ‘wasting’ their solar energy by failing to use it themselves.

In places with an 8c/kWh feed-in tariff, solar system owners stand to save the most money on their power bills by ‘self-consuming’ as much of their power as possible–that is, using it while it is being produced, when the sun is shining. This saves them money on their power bills because it means that they have a reduced need to purchase more expensive power from the grid. Under Tasmania’s 27c/kWh rate, homes don’t need to worry as much about whether they are using their solar power or letting it go to the grid–the savings are comparable either way.

Although longer is clearly preferable, a 3-year guarantee of the 27c/kWh rate as opposed to a 2-year one would give significantly more time for solar systems to work towards ‘paying themselves off’. If the rate is thereafter reduced, system owners could still save money on their power bills by shifting their power usage–as much as possible–to daylight hours. “We’re not losing sight of the fact that we’ve got a product that we can point to the sun and make usable power, and there’s always an application for that, regardless of the feed-in tariff,” said Adrien Luke, a solar panel installer who was also interviewed by the ABC.

Looking to compare solar prices in Tasmania? Request a comparison of solar quotes by filling out the form to the right of this page or calling Solar Choice on 1300 78 72 73. Solar Choice also offers free, impartial advice on going solar across the country–feel free to contact us with your questions about going solar in Tasmania.

Top image by Jeff Schmaltz, via Wikipedia.

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