Rooftop solar subsidies – ACCC calls for axe.

Rooftop solar subsidies should be completely removed and the solar feed-in tariffs should be managed at a state rather than a federal level, according to recommendations from the competition watchdog.

Rooftop solar subsidies in Australia

The Australian Competition & Consumer Commission’s electricity affordability report, which was released this week, highlights the cost of our National Energy Market, which include the large-scale renewable energy target, the small-scale renewable energy scheme and solar feed-in tariffs.

The ACCC said the cost of the LRET are expected to fall in the years after 2020, and were happy to leave the scheme to wind up on its 2030 end date. They said that the SRES, however, cost $130 million in 2016-17, and should be wound down and abolished by 2021, almost ten years ahead of schedule, to reduce costs for all consumers – not just those with solar installed.

The report, according to the Australian, found that households with solar panels installed earn $538 per year via feed-in tariffs, which doesn’t count the fact that they pay less for electricity as well:

“Meanwhile, non-solar households and businesses have faced the burden of the cost of premium solar feed-in tariff schemes and the SRES,” the ACCC said.

“While premium solar schemes are closed to new consumers, the costs of these schemes are ­enduring.”

With the New South Wales solar feed-in tariff to drop by 44% this financial year, the glory days of feed-in tariffs could be behind us. But at what point do we stop to count the social cost (i.e. the environmental displacement)? 

Rooftop solar subsidies in Australia - Opposition Leader Bill Shorten
Rooftop solar subsidies in Australia – Opposition Leader Bill Shorten (source: Wikipedia)

The 398 page report has ‘produced vital ammunition to reform energy’, has been ‘hijacked by zealots’ and doesn’t justify the building of new coal-fired power stations, depending on who you ask. About an hour ago Bill Shorten admitted he hasn’t read the ACCC report yet so it’ll be interesting to see what his thoughts are. Certainly just early days for this conversation, but it’s good to see Australia talking about our energy future and trying to come up with a plan. Watch this space! 

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Solar PV installations in Australia Triple From 2017

Solar PV installations in Australia have tripled in the first half of 2018 in comparison to solar uptake in 2017. How will this affect our renewable economy and can we expect this to continue for the rest of the year? Where are all the installs coming from? Let’s take a look. 

Solar PV installations in Australia

Solar PV installations in Australia Triple From 2017 (source: Canberra Times via Green Energy Markets)
Solar PV installations in Australia Triple From 2017 (source: Canberra Times via Green Energy Markets)

The Canberra Times is reporting that household systems are now, on average, around 5 kilowatts. As the technology improves we’ll see this figure rise and (potentially) prices fall. They’ll certainly fall in terms of per watt pricing but the system uptake has resulted in 44% lower feed-in tariffs in New South Wales already – we’ll have to wait and see how this affects the rest of the country. It certainly doesn’t seem to have curbed the ACT’s appetite for solar systems – with the state leading Australia by a huge margin with a 130.8% uptake in installs over Q1+2 in 2018 vs. the same period. 

Green Energy Markets are also predicting that by 2020 renewable energy will represent around 33% (1/3) of Australia’s energy mix – almost double the 17.3% measured in 2015. Ric Brazzale of Green Energy Markets told the Canberra Times they are expecting to see around 30% higher figures by the end of the year:

“If we continue on at the same rate of installations we will end the year at between 1450 MW to 1500 MW – this will be more than 30 per cent higher than the 1100 MW installed last year,” he said.

It’s important to note that the amazing growth commercial solar (i.e. systems which are more than 15kW) has also seen over the last 12 months is heavily reflected in these figures. Over a quarter of June’s solar system demand is due to companies wanting to insure themselves from rapidly rising electricity prices and take control of their bills back by installing a commercial solar system on their premises. 

If you’re interested in reading all the specifics of their report, please click here to download Green Markets’ Renewable Energy Index for May 2018.

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New South Wales solar feed-in tariff to drop by 44%

The New South Wales solar feed-in tariff is set to drop by 44% after IPART, the state pricing regulator, confirmed previously drafted cuts to the state’s feed-in tariff benchmark for 2018/19.

New South Wales solar feed-in tariff

New South Wales solar feed-in tariff IPART
Click to view New South Wales solar feed-in tariff changes via IPART (source: IPART.NSW.GOV.AU)

The regulator, IPART (Independent Pricing and Regulator Tribunal for NSW) advised in May that they will be recommending heavy drops in the tariff with the release of a draft publication entitled ‘Solar feed-in tariffs: the value of electricity from small-scale solar panels in 2018-19. 

It looks like the solar feed-in tariff drops will be going ahead – so let’s take a look at what this means for people with solar, and people without:

As per Renew Economy, IPART justified their slashing of the prices in advising that all customers would be affected if they didn’t act.

“We set the benchmark range based on our forecast of the average price that retailers would pay for solar exports across the day (weighted by solar output) if they were buying this electricity on the wholesale spot market,” the report, released yesterday, said.

“We consider that this is reasonable, and that a higher benchmark would lead to unacceptable outcomes.

“Specifically, if retailers were required to pay more than this for solar exports, they would be paying more than they pay for wholesale electricity on the NEM.

“As a result, retail prices for all customers would need to be higher to recover the difference,” the report continued.

Those who have already invested in solar are a little less magnanimous about the changes – with Shani Tager from Solar Citizens conveying her opinon via email to RenewEconomy: 

“The decision to cut the feed-in tariff punishes solar owners, it’s like getting a pay cut for working overtime,”

That particular analogy might be a bit of a stretch but it’s interesting IPART aaren’t considering the ‘social price’ of carbon like Victoria are currently doing. This has raised the ire of the Greens as well:

“If the NSW government are serious about supporting renewable energy then they should be change the criteria to assess solar feed-in tariffs to recognise the multitude of benefits solar energy brings,” Greens MP Tamara Smith said.

To sign off, IPART gave us a hint of things to come and how they plan to deal with the situation in the future:

“We consider that solar customers should be treated like any other generator in the competitive electricity market, which means that they take or pay the market price – and are not otherwise compensated or penalised for their impact on these prices,” the report said.

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UTS Solar – aiming to fully offset all energy.

UTS Solar and renewables – the University of Technology Sydney have asked for proposals from large-scale renewable energy projects as they’re hoping to enter into a Power Purchasing Agreement (PPA) in order to fully offset the energy usage of buildings developed under UTS’ $1.3b City Campus Master Plan program.

UTS Solar – City Campus Master Plan

UTS Solar Large Scale PPA Tender
UTS Solar Large Scale PPA Tender (source: Seb Crawford via uts.edu.au)

According to the UTS Newsroom, their goal is for renewable energy purchasing to meet 40-50% of the university’s entire needs by 2019. The energy requirements of the newest buildings at UTS will be fully offset and are a great representation of UTS’s ongoing commitment to sustainable operation. 

UTS Deputy Vice Chancellor (Resources) Patrick Woods was quoted as saying, “UTS has a strong record of innovation in energy, with Australia’s first offsite solar corporate PPA with Singleton Solar farm, followed by another in Orange NSW and Australia’s first district cooling connection contract with Brookfield Central Park.”

According to Vice Chancellor Woods, “Corporate renewable energy PPAs are a method for institutions to secure competitive and firm energy prices whilst contributing to our sustainability objectives. They’ve been particularly successful in the US for corporations seeking the benefits of renewable energy. The ACT and Victorian Governments, and Telstra have had similar success in Australia.” Woods noted that there are already a number of projects with DA, ready to break ground, but need a PPA for the generation so they can secure financing – so hopefully one of them can pair up with UTS and get started! 

UTS could purchase large-scale generation certificates (LGCs) and electricity for a 10-15 year period – and according to the tender, they plan on implementing the PPA within the next two years. As such renewable technology projects of suitable scale and in the correct phase (i.e. already under development/with development approval and awaiting a PPA) are being sought to tender. 

University solar farms are far from a new thing, with the University of Southern Queensland’s innovative solar carpark winning awards and saving USQ over $1m so far. Although UTS isn’t actually installing solar in this circumstance, it’s still fantastic to see them tendering for a PPA – they do have a lot of solar panels on the premises and support many different renewable endeavours – such as the Solar Stand and their Centre for Clean Energy Technology

 

 
 

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2017 NSW Tariff-Tracking Report released.

The St Vincent de Paul society has released its fifth NSW Tariff-Tracking report and it shows the huge disparity between deals the retailers are offering – with the best offers saving almost $840 p.a. compared to those on the worst plans. In regional NSW this range is even worse, with the difference reported by the SMH as up to $1230. Australian solar power plans are in need of a shake-up and this week the government have taken the retailers to task by asking them to change the way they deal with discounts and rolling over plans.

2017 NSW Tariff-Tracking Project Report Vinnies
2017 NSW Tariff-Tracking Project Report (source:vinnies.org.au)

NSW Tariff-Tracking

Despite ballooning wholesale energy costs, retailer AGL reported a net profit of $539m for the 2016/17 financial year. The profits of energy retailers have been in the crosshairs of the government over the past few months as their dubious tactics of offering short term discounts and then rolling customers onto more expensive plans without the discounts have been examined.

On Wednesday the government met with eight power companies (Energy Australia, Momentum Energy, Simply Energy, Alinta Energy, Origin Energy, AGL, Australian Energy Council and Snowy Hydro) to discuss the rapidly increasing prices and come up with a solution to the murky short-term ‘discount’ based business model they are employing. After the meeting Prime Minister Malcolm Turnbull discussed the issue and the government’s fix, saying  “They are on … discounted plans that have run out, and they are now on a standard offer and paying too much for their electricity. The retailers have agreed that they will write to their customers who have reached the end of a discounted plan and outline, in plain English, alternative offers that are available,”

Given that the Energy Market Commission found 50% of households haven’t changed retailer or plan in the last 5 years, there’s a lot of money being left on the table. According to Energy Minister Josh Frydenberg the Australian Energy Regulator (AER) have told the government households could save over $1,000 per year by changing retailer/plan.

In terms of the power companies, they were mostly happy to agree to Turnbull’s plan, but there was ongoing discussion about Canberra’s dilly dallying with regards to the Clean Energy Target. Origin Energy’s chief exec, Frank Calabria, was quoted by the SMH as saying that “to deliver a genuine reduction in prices for Australians, we must also find a way through on energy policy, including a Clean Energy Target. This is necessary to unlock investment in much-needed new supply to replace our ageing coal-fired power stations, and transition us to a cleaner, more modern energy system”.

Click here to view the full report directly from the Vinnies website.

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Metz Solar Farm installation in Hillgrove, near Armidale.

The Metz Solar Farm installation, which will generate 100MW of power, has been approved for a property in Hillgrove, which is east of Armidale. The project will be one of the largest in New South Wales.

Metz Solar Farm Installation – Details

The farm will comprise of 400,000 panels and, according to Northern Tablelands MP Adam Marshall, will power 40,000 homes and produce almost 10% of New South Wales’ solar output.

“This is an enormously exciting project not only for Armidale and the Northern Tablelands, but for all of NSW,” he said.

Metz Solar Farm Armidale Location
Metz Solar Farm – Armidale Location (source: metzsolarfarm.com.au)

The Northern Tablelands already has some large projects in the works, such as the Moree Solar Farm and three wind farms between Glen Innes and Inverell. This means the area currently has 821MW of large scale renewable energy development approved, or in the construction phase. Some great news for New South Wales solar farms and we hope to see a lot more built over the coming years.

The farm, which represents a $130 million investment, will be developed by Infinenergy Pacific and, according to their website, will reduce CO2 emissions by 225,000 tonnes and save 350 mega litres of clean drinking water over its 30 year lifetime. It’s undecided yet whether the PV panels will be mounted in a fixed tilt position or using a single axis tracking system.

According to the Infinenergy Pacific website over 15 different locations in the Armidale area were considered but they ended up with the final site due to the simple grid connection options onsite, the good transporation links and site access, and the ‘low visual impact’ (rolling topography and extensive local shielding) – so it won’t be a pain for residents.

Work on the farm will commence in early 2018 and is expected to finish in early 2019. It will be decommissioned after 30 years. The construction phase of the farm will generate around 150 full time jobs, and another eight ongoing positions will be required for maintenance and upkeep.

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Power Price Rises in NSW as Regulator Loses Case

There’s never been a better time to start investigating solar energy in New South Wales – this week a federal court has blocked regulatory efforts to curb power price rises in NSW. Residential bills are set to soar even higher in the face of already over-inflated prices.

Power Price Rises in NSW

The Australian Energy Regulator (AER) argued in court that the NSW electricity distribution businesses (pole and wire companies like Ausgrid and Endeavour Energy) were inefficient (the cost of transporting electricity from station to house consists of approximately 40% of your bill). This 40% made up the majority of the AER’s ongoing (since 2015) complaints to the Australian Competition Tribunal and subsequently the Federal Court on appeal.

Power Price Rises in NSW - Paula Conboy
AER Chair Paula Conboy

According to the Australian Financial Review, the loss of this court case means that average households will face an increase of around $100 per year. Ausgrid have advised that average household electricity prices will raise by 1.5% or $11 a year for the next six years. Evidently the actual figure remains to be seen.

Since the 99-year lease for 50.4% of Ausgrid (the electricity infrastructure company which owns, maintains and operates the electrical distribution networks for 1.6m NSW residents) was sold to IFM Investors and AustralianSuper in October 2016, concern about already high energy prices has been growing. This court decision will result in a windfall of billions of dollars for the new investors of Aussgrid and Endeavour Energy. Other companies set to benefit include Jemena (who own ActewAGL) and will set a dangerous precedent for the rest of Australia.

Ramifications for other states

Craig Memery, policy officer with the Public Interest Advocacy Centre was quoted as saying “Not only will NSW households pay more following this decision; the precedent set will affect future decisions by the regulator, impacting households across the country.” However NSW energy minister Don Harwin said the government has ‘guarantees’ in place that mean consumers will pay less to the distributors in 2019 than they did in 2014.

Paula Conboy, chair of the AER, said the decision was “disappointing for NSW and ACT electricity and gas customers overall. Our 2015 decisions set lower revenues than proposed by the network businesses in NSW and ACT, partly because we concluded that costs above efficient levels should be funded by the network owners, not customers.”

Once again we’ll just have to see what this means for the rest of Australia but it’s hard to view it as anything but a growing problem for Australians who are on track to consume almost 200 Terawatt hours in 2017.

 Time to invest in solar?

Despite the outcome of this case prompting Energy Minister Josh Frydenberg to reaffirm his call for a reform of the national electricity market rules (in order to stop companies gaming the price setting system), we don’t have much faith in the government to stop the ridiculous levels power prices have reached. With the cost of solar + storage at an all time low and dropping consistently, it’s definitely reaching a point where you can add value to your residence and decrease energy costs in the medium-long term by investing in solar power. Power price rises in NSW are going to continue at the same rate – take a look at our solar battery comparison chart to learn more about your options and wrest control away from the unmitigated, uncontrolled greed of the power companies and continued incompetence of the government and judicial system.

 

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