A lot has been going on on the solar world – more of which I wish I had had time to comment upon.
I have however put together a submission to the NSW Solar Summit 2 being held this Friday July 1st in Newcastle, so feel free to read and consume. Feedback always welcomed.
Dear Solar Summit Participants,
I would like to propose a number of measures regarding small, medium and large scale solar which I believe will have a positive impact in the discussion.
First and foremost, the basis on which the discussion needs to be held in the spirit of fairness, reasonability, support for the renewable energy industry and in a way which is sustainable for all parties involved.
The main principles which I believe should be adopted are:
Indexation – all domestic and commercial feed-in tariffs should be subject to indexation of average electricity prices being paid by the consumer / business installing the system.
Annual review – prices paid for solar electricity should be reviewed annually with an adjustment to curb over-adoption, but which has a view to the renewable energy targets set at both a state and federal level.
Stability – the plan should be for a long term support policy, for 15-20 years, with a major review to be conducted each 3 years to assess the success of the program. The program should also have set criteria for changes in policy being implemented which will ensure that cut-offs with less than 8 hours notice never occur. Entrants to the program should have their program locked in for 10 years at the time they apply.
Domestic and small scale commercial systems should have a NET Premium Feed-in Tariff (PFIT) scheme, the basis of which I would suggest as the following:
Based on an index base of that which the consumer/business is charged, Net PFIT could be calculated as
1kW – 9.995kW – PFIT = 2 times index base
10kW – 29.995kW – PFIT = 1.75 times index base
30kW – 59.995kW – PFIT = 1.5 times index base (commercial capped at total energy bill rate)
60kW – 100kW – PFIT = 1.25 times index base (commercial capped at total energy bill rate)
For example then, a householder paying 24¢ per kWh would receive a NET rate of 48¢ per kWh, and a business installing a 60kW system which pays 16¢ per kWh would receive a NET rate of 20¢ per kWh.
This would encourage the continued adoption of a NET system, and provide mechanism to support the domestic industry. Any Net system should be metered and calculated at not more than 30 minute intervals (similar to the Victorian system).
The commercial side (30kW – 100kW) should also be capped to ensure that businesses do not profiteer from the system, but rather that they are encouraged to size their systems appropriately to their energy use. A 100kW system in NSW should provide an average of around 400kWh per day, so this will provide for over 90% of commercial users to gain access to the program (given an average business uses around 240kWh per day)
For large scale solar, it is probably unreasonable to request (as desirous as it may be) for a premium to be legislated for PV generated power, however if a federally legislated program which provided appropriate tax breaks on PV systems, and indeed on PV system components, then this would support large scale development. These tax breaks could include GST-Free status for PV systems across the board, income tax holidays for medium to large scale solar, for either a period of say 5 years, or until the cost of the system is recouped. As with AusIndustry projects, there could also be a tax concession of 150% on the cost of installation of a commercial grade solar system to support the introduction of the 30kW-100kW systems.
In addition the lobbying of the federal government at a state level to develop programs to support, the government could deem a number of PV Regions where these tax offsets / benefits would occur. This would allow the designation of PVRs to support rural and regional development in renewable energy, and investment in rural communities, along with the zoning of areas which are peak demand deficient, such as undersupplied industrial regions.
Previous schemes have been capped at certain number of MW installed capacity. This capping has seen uncertainty enter the market and has been part of the driver behind the “race” to go solar. If any PFIT scheme to be reintroduced is to be capped, then it would be prudent to open a portion of that cap to a competitive tender process whereby the tenderers can agree to purchase the power generated at an agreed rate. This can then be resold by those tenderers as they see fit, and at any time. This process would grow and extend the cap mechanism, and ensure that there was a long term market for the scheme.
Finally, as we move towards a fully deregulated electricity industry in 2015, we need to look at the ability of consumers and PV generators to be paid a premium for electricity fed into the grid at peak times. In the extremes of Summer and Winter, there are days where power on the national market is traded at a premium. Currently more and more businesses and indeed even consumers are moving to a variable rate tariff. Any PFIT scheme which uses an index base (against what the customer is charged) to provide the value of that which is generated must have the ability to provide that premium back to the business in peak demand times. This will further encourage behaviour modification in terms of power consumption, which is of course the object of the entire exercise.
In summary therefore, I recommend the adoption of the following actions:
- Adoption of an indexed PFIT scheme for Domestic systems
- Adoption of an indexed PFIT scheme for Domestic systems, with a generation cap to be placed on the value generated at 100% of the energy consumed
- Introduction of tax breaks / tax holidays / tax incentives for commercial, medium and large scale PV projects
- Commitment to tender all or a significant portion of any cap set on the PFIT scheme
- Introduction of variable rate metering to include variable rate PFIT benefit
I commend these to the summit.
A.
Enviromate Australia 