Tariff cuts eclipse household solar panel - New limits on feed-in payments

Age
17 Oct 2011, Page: 4

THE Baillieu government has quietly cut access for most households to a second incentive to install new rooftop solar panels. It follows the decision last month to slash the state's "premium" feed-in tariff paid by retailers for rooftop solar from 60¢ to 25¢ a kW for power fed into the grid. Under the changes, the government will also restrict access to the state's "standard" feed-in tariff in place since 2004 for new solar panel systems generating less than five kilowatts, the lion's share of installations.

The standard feed-in tariff requires electricity retailers to pay households and businesses that install renewable-energy systems generating up to 100 kW the same price for energy fed into the grid as they charge for power taken out, which is typically between 20¢ and 24¢ a kW. The changes mean households installing smaller solar systems will now only be able to apply for the "transitional" 250 tariff in place for five years. The standard tariff does not have a cut-off date. Critics of the feed-in tariffs argue that they increase the cost to all electricity consumers as energy retailers bear the main costs.

The changes took the Clean Energy Council by surprise, with policy director Russell Marsh saying the group only learnt about it late on Thursday night when legislation for the 25¢ tariff reached Parliament. That is despite discussions with the Department of Primary Industries over several months about the future of Victoria's feed-in tariffs. A spokeswoman for Energy Minister Michael O'Brien said: "When the transitional feed-in tariff is introduced from 1 January, the standard feed-in tariff will not be available to customers who are eligible for the transitional feed-in tariff. "The rate of 25¢ will be the second-most-generous legislated rate in Australia".

The state government will commission the Victorian Competition and Efficiency Commission to inquire into the design of future feed-in tariffs, with a report expected to be completed in 2012. The opposition's energy spokeswoman, Lily D'Ambrosio, said: "It is becoming more evident that the Baillieu government is forcing the small scale solar power industry to take a long walk over a very short cliff to its possible demise next year". She said the legislation to put in place the new transitional 25¢ tariff also allowed the minister to shut it down any time before the guaranteed five years.