Victorias new solar laws

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Revision as of 14:21, 26 July 2008

The Brumby government in Victoria, Australia, announced the impending introduction of new Feed in tariff legislation in May 2008.

While the intention to encourage clean energy production from solar panels is good, the structure of Victoria's feed in tariff does not really achieve this.

Unfortunately, the Government has made the following serious mistakes in the structure of this tariff, which almost completely negate the positive effects a well structured tariff would have.


The Feed in Tariff is only paid on net metering

The total electricity generated by panels should be subject to the tariff, as all the clean electricity generated has zero emissions which directly substitutes for coal-fired power and therefore reduces emissions accordingly.

In Germany and other locations where they pay the tariff on gross metering, there has been a dramatic rise in installation of solar power. Germany now has 400 times the solar output of Australia despite having about half our sunshine.

The opportunity has been missed to provide similar encouragement to a new economy and local industry (and jobs) based on increased installation of panels on available roof space.

The Feed in Tariff has a maximum ceiling of 2kW

This is difficult to understand. The more solar zero emissions power we generate as a nation the better. This is a critical measure for reducing our emissions to combat climate change. The 2kW array size limit for getting the Feed in Tariff is simply crippling the financial motivation for people to install solar panels, and crippling their payback if they choose to install a bigger array.

Most five star standard households currently consume about 20 to 25kwH of electricity per day. A 1kW array produces about 5kwH per day, while a 2kW array produces about 10 kwH per day. Such systems will therefore export negligible net energy to the grid, particularly if a 2kW air conditioner is run on hot sunny days.

There is no rational reason to apply such a tariff ceiling; it should be removed.

No certainty for investment is provided

The complexities and restrictions of your feed in tariff resulting from net metering combined with the 2kW ceiling provide no certainty or guarantee for investment in a solar array, unlike gross metering with no ceiling which does. This is evident in countries like Germany where there has been significant investment in solar power - now the equivalent of two coal fired power stations, but with zero emissions.

The resultant lack of certainty for investment will greatly impede the uptake of solar power in Victoria.

The Feed in Tariff is discriminatory.

The very few who may be lucky enough to benefit from your tariff will be those who can afford a 6 star house, relatively expensive efficient appliances and a 2kW array. By contrast, lower income less efficient households with a 1kW array and less efficient appliances will get no benefit. This is discriminatory.

In summary

The Victorian government's assertion that the FIT "could pay off the cost of installation in less than 10 years" is incorrect. The combination of the 2kW ceiling and paying on net metering means very few, if any, will get any financial benefits from the tariff so it will be impossible for it to pay off the residual cost of solar panel installation after the rebate.

This scheme effectively does not deliver on Labor's 2006 election promise to introduce a workable feed in tariff due to its crippled nature.

The tariff will not provide any incentive for leadership in Victoria in uptake of solar power or renewable energy initiatives.

The tariff is not strategic and does not improve affordability of sustainable solar power. It will not empower Victorian households to take action on climate change.

The tariff has also not met the expectations of many local community groups who are very keen to see real government action on climate change. As such, it is a great disappointment.

The tariff should be adjusted to remove the 2kW ceiling and use gross metering, so that Victoria can mirror the proven success of such tariffs where they have been implemented elsewhere and I understand will be implemented in the ACT.

See also

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