VCEC solar power report risks cheating consumers

www.cleanenergycouncil.org.au
18 May 2012

The solar industry says that while a draft report from the Victorian Competition and Efficiency Commission (VCEC) contained some important recommendations, consumers could lose out on payments for their solar electricity. Clean Energy Council Policy Director Russell Marsh said many of the VCEC recommendations were sensible, but there was a risk that consumers could miss out on as much as half of the money they were entitled to for their solar power. "We agree that as the cost of solar power continues to drop we should move beyond incentive based feed-in tariffs to a system where consumers are simply paid the fair value for their solar power", Mr Marsh said. "The Clean Energy Council has analysis to show that the fair and reasonable value of solar is between 12-16¢ per kilowatt-hour of electricity.

"The VCEC draft report suggests that households should get a guaranteed payment of between 6-8¢ for the energy they contribute to the grid. But they would then need to negotiate an additional payment from electricity distribution businesses in recognition of the fact that distributed energy such as solar power allows for reduced expenditure on network poles and wires. This is unrealistic. "It will be virtually impossible for consumers to actually get that additional payment, meaning they will miss out on up to half the value they are entitled to. The value of solar power to networks has been quantified successfully in Western Australia and should be the model for Victoria as well", he said.

Mr Marsh said the recommendation that a mandatory minimum value should be paid to consumers for their solar power was important, but to be fair the required payment must include the network benefits too. "More than 100,000 Victorian households from all walks of life have already recognised the value of solar power as a way of fighting rising power bills. We should ensure that people who buy solar power are guaranteed a fair return on this investment that they have made in good faith", he said. "Solar power and other types of renewable energy continue to exceed all expectations, falling rapidly in cost and becoming more efficient. Both state and federal governments have struggled to keep up with the pace of change in the clean energy industry. "More resources need to go into better recognising the growing value of these new technologies, and developing regulations to shape the growth of the industry and protect consumers".