Solar Power Project in Collinsville

Not more than a week after Victorian’s Andrews government pledged combat network isolation against rooftop solar residences, the territory’s Essential Services Commission (ECS)has announced it will cut the feed-tariff for solar energy transported to the electricity grid to 5c/kWh.

The Essential Services Commission indicated in a statement on Monday that it has planned to set the lowest rate for purchases of small renewable energy electricity at 5c/kWh, beginning January 2016.

The ESC stated that it came about this price by comparing“the marginal cost of the equivalent amount of electricity that would otherwise need to be purchased from central generators, and the locational value of electricity produced close to the final consumers compared to relatively distant central generators.”

The ESC said “the energy value of PV electricity had been calculated as a weighted average of the forecast spot market prices for Victoria for each half-hour period of 2016, as prepared by ACIL Allen Consulting.”

Ironically, the ESCadded thatone of the reasons to choose a lower 5c/kWh rate, below thealready 6.2c/kWh rate, was because of a lower forecast wholesale market price of electricity, preferably during daylight hours when solar electricity was being produced.
The ESC stated it didn’t consider any environmental or network benefits of rooftop solar, due to a “lack of evidence”.

“This decision delivers a transfer of wealth from solar PV owners to electricity retailers,” Australian Solar Council chief John Grimes stated.

“Solar energy exported to the grid is sold to your neighbours at the full retail rate, often upwards of $0.25 per kilowatt-hour. So paying a solar owner $0.05 cents per kilowatt hour for that exported energy is simply unfair.”

National Director of Solar Citizens, Claire O’Rourke stated the commission had got an incorrect decision, and was obviously conveying a different information to Victorians that the territory government which recently made public a Renewable Energy Road map with the aim of attaining RET of 20% by 2020 as well as protecting the rights of rooftop end-users.

“The slashing of the feed-in tariff by the ESC is extremely unfair and risks undermining increased renewable energy as part of Victoria’s energy mix,” O’Rourke said in a statement on Tuesday.

“The Victorian government has committed to a review determining what a fair price should be later this year, but this could be too little too late if the ESC feed-in tariff cuts get the green light.

“It’s not proper process to cut the feed-in tariff now, before we know what a fair price for solar fed back into the grid should be.

“Energy Minister (Lily) D’Ambrosio should delay these changes until the results of the upcoming State Government review are available.

“It punishes tens of thousands of households that are likely to lose a large chunk of the already small financial return they receive from providing clean, renewable energy back into the grid.

“This cut will also make it more difficult for the thousands more families in Victoria who want to make the move to solar and enjoy the cost savings on electricity that rooftop solar can bring.”

S. Vorrath August 25, 2015. Victoria solar feed-in tariff to be slashed to 5c/kWh in 2016 [Accessed on August 27, 2015]