Australian State Feed-In-Tariffs

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Solar Panel w/Cloud (credit: sunisthefuture-Susan Sun Nunamaker). This design is also available at www.sunisthefuture.com

To continue our series of discussion on Australian Solar Incentives, in addition to Australian Federal Solar Incentives, most states also offer support for solar and other renewables via Feed-In-Tariff (FIT) schemes. Under the FIT scheme owners are paid for each unit of power that they export to the electricity grid. The FIT rates offered range from zero to as much as  66c or 68c per kWh. Most Australian states and territory governments either currently have or previously had a Solar Feed-In-Tariff  (Solar FIT) (also known as a Solar Bonus Scheme or Solar Buy-Back Scheme) in place. A uniform federal scheme to supersede all State schemes has been proposed by Tasmanian Greens Senator Christine Milne, but not enacted. National feed-in tariff systems have been enacted in numerous countries including Brazil, Canada, China and many EU countries.

There have been many changes to Feed-In-Tariff legislation in all Australian states and territories within the past two years. For an overview of these state incentives offered, please see the summary table of Australian State Government Feed-In-Tariffs Schemes, available at: http://en.wikipedia.org/wiki/Feed-in_tariffs_in_Australia

Feed-in-Tariffs were introduced by a number of states in Australia to increase the amount of solar PV power generated. They can be classified by a number of factors including the price paid, whether it is on a net or gross export basis, the length of time payments are guaranteed, the maximum size of installation allowed and the type of customer allowed to participate. The Solar Feed-In-Tariff schemes currently available in Australia are predominantly “net” schemes. A net Feed-In-Tariff rewards one for each unit of solar power that one had exported to the electrical grid. The governments of New South Wales (NSW), Victoria (VIC), South Australia (SA), and Queensland (QLD) are operating under net Feed-In-Tariff scheme. Net FIT’s generally pay comparatively little to the producer (generally a household) because electricity produced by solar photovoltaic or other renewable energy just offsets the producer’s usage. Net FIT’s are referred to as “fake feed-in tariff” and is actually net metering, with a monthly payment for net generation, instead of the normal roll over. Gross tariffs conform to the normal definition of a feed-in tariff, and provide a more certain financial return, paying for all electricity produced, even if it is consumed by the producer, reducing or helping meet peak demand. If you are still not clear about the difference between gross vs net feed-in-tariff, think of net feed-in-tariff as having a cap on the amount of energy one can sell back to the grid at the level of one’s energy consumption whereas gross feed-in-tariff does not have such a cap. Many Australian state feed-in tariffs were net export tariffs, whereas conservation groups argued for gross feed-in tariffs. In March 2009, the Australian Capital Territory (ACT) started a solar gross feed-in tariff. For systems up to 10 kW the payment was 50.05 cents per kWh. For systems from 10 kW to 30 kW the payment was 40.04 cents per kWh. The payment was revised downward once before an overall capacity cap was reached and the scheme closed. Payments are made quarterly based on energy generated and the payment rate is guaranteed for 20 years.

The ACT , TAS, and New South Wales have  or had gross feed-in tariffs. Other State Governments have enacted net feed-in tariff schemes which have been criticised for not providing enough incentive for households to install solar panels and thus for not effectively encouraging the uptake of solar PV.

Australian FIT laws tend to focus on providing support to solar PV particularly in the residential context, and project limits on installed capacity (such as 10kW in NSW) mean effectively that FITs do not support large scale projects such as wind farms or solar thermal power stations.

Solar FITs are one of the key incentive mechanism for the promotion of renewable energy generation across the globe. Through FITs, Germany was able to become the world leader in rooftop solar power. China has also introduced a national FIT program in an effort to expand domestic demand for solar PV systems.

Gathered, written, and posted by sunisthefuture-Susan Sun Nunamaker

Related link/URL:

Feed-In-Tariff

Decarbonisation on the Cheap, How an Electricity Efficiency Feed-In-Tariff Can Cut Energy Costs

Why FITs (from Alliance For Renewable Energy)

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