Posts Tagged ‘Federal Solar Incentives’

24 March

Australian State Feed-In-Tariffs

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Dear Friends, Visitors/Viewers/Readers, (Please click on red links below),

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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20 March

Australian Federal Solar Incentives

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Dear Friends, Visitors/Viewers/Readers, (Please click on red links below),

Sun Above Brisbane, Australia (credit: sunisthefuture-Susan Sun Nunamaker)

As I’ve promised in our previous post on “Aussie’s Transition Into Renewable Energy Age“, let’s have a closer look at Australian incentive policies designed to encourage the uptake of solar and other types of renewable energy. In essence, there are two types of financial incentive schemes, the Federal Solar Incentives and the State Incentives. In today’s post, I’d like to concentrate on the Federal Solar Incentives.

Firstly, I want to clarify that MRET (Mandatory Renewable Energy Target) and RET (Renewable Energy Target) are not exactly the same policy, even though both MRET and RET are under the category of Federal Incentives.

The MRET of Commonwealth Government began on April 1, 2001, by means of the Renewable Energy (Electricity) Act 2000 (the Act), targeting the generation of 9,500 GWh (gigawatt hour) of extra renewable electricity per year by 2010. In 2009, the Renewable Energy (Electricity) Bill 2009 amended the Act and replaced the MRET with the RET. This altered the target from 9,500 GWh per year by 2010 to 45,000  GWh by 2020 and introduced the Solar Credits scheme. Definitely, RET has much more ambitious goals.

The Renewable Energy Target (RET) requires that 20 per cent of Australia’s electricity be produced from renewable energy sources by 2020. To achieve this, the Government has set annual targets for each year of the scheme and requires Australian electricity retailers and large wholesale purchasers of electricity to demonstrate that they meet these targets. Compliance is demonstrated by surrendering renewable energy certificates (RECs), where one REC is equivalent to one additional megawatt hour (MWh) of electricity generated from renewable energy sources (above a 1997 benchmark). Failure to surrender adequate RECs would lead to a penalty charge of $65 per MWh. Electricity retailers and wholesale buyers can choose to either generate the electricity from renewable energy sources themselves or purchase the RECs from others that have done so. This creates a market for RECs.

RECs come in 2 forms: Small-scale Technology Certificates (STCs) for renewable energy generators up to 100 kilowatts (kW), and Large-scale Generation Certificates (LGCs) for systems whose capacity is greater than 100kW.

The most recent review of the RET has recommended that the size of renewable energy generators eligible for STCs be decreased to 10kW in 2013.

Shortly after the passage of the 2009 legislation, REC prices fell sharply.  This may had been caused by the intricacies and practicalities of the new RET, as well as its interaction with some State-level policy. This price crash created uncertainty in the market and threatened to deter potential investment in large-scale renewable energy projects. So the Australian Government announced a series of reviews and ultimately amended the legislation to create the LRET and SRES.

  • The Large-scale Renewable Energy Target (LRET) has a target of 41,000 gigawatt hours (GWh) by 2020 and only large-scale renewable energy projects are eligible.
  • The Small-scale Renewable Energy Scheme (SRES) targets a theoretical 4,000 GWh annually and is eligible only to small-scale or household installations.

As part of the SRES, a program known as the Solar Credits scheme allows households, businesses or community groups to generate more than just one SREC for each megawatt hour generated. In fact, depending on the set ‘multiplier’, they have been able to generate up to five SRECs per megawatt hour of electricity that they produce. The scheme is based on the capacity of the solar energy system, and on the likely amount it will generate over a given period. The Solar Credits scheme applies only to the first 1.5 kW of installed renewable energy capacity of an eligible small generation unit. For units bigger than this, each megawatt hour generated from the extra capacity is eligible for only the standard 1 to 1 rate of SREC creation. The SREC ‘multiplier’ is set at five until 2011, and then declines to three on July 1, 2011, and then decline by one for each year after 2011 until the Solar Credits scheme ends in 2013.

While the LRET target is certain and capped, target of the SRES is not; it is only notional. As the LRET is capped, the prices of LRECs fluctuate on the market and can vary daily with any number of external and internal factors up to the level of the penalty charge. The price of SRECs, however, is fixed by the Government (initially at $40). The actual amount of electricity generated under the SRES may or may not exceed the 4,000 GWh estimate.

Australian electricity retailers and large wholesale purchasers of electricity are therefore required to surrender a fixed proportion of LRECs annually, but an uncertain and changing proportion of SRECs (since this depends on the total number of SRECs generated each year).

Related sites/links:

Small Generation Unit STCs Calculator

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

Any of your comments/suggestions/questions will be welcomed at sunisthefuture@gmail.com

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