Solar households hit as SA regulator flags removal of minimum feed in tariff

Solar households hit as SA regulator flags removal of minimum feed in tariff

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ESCOSA proposes to remove the minimum price retailers are expected to pay for rooftop PV exports in the state, starting January 2017.

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South Australia’s solar feed-in tariff of 6.8c/kWh look set to be scrapped, after the state’s Essential Services Commission (ESCOSA) revealed it was working on a draft proposal to remove the minimum price retailers are expected to pay for rooftop PV exports in the state, starting January 2017.

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In a media release on its website, ESCOSA said its proposal to remove the minimum FiT was “based on the view that the market structures that facilitate electricity retail competition are sound and that continued regulation of the minimum R-FiT may inhibit competition in the future, to the detriment of consumers.”

The Commission also said that its proposal to stop setting a minimum R-FiT did not necessarily mean retailers would no longer pay it.

“Evidence from other jurisdictions strongly suggests that customers will continue to receive an R-FiT set by retailers, reflecting the long term benefit that retailers receive from energy exported by solar customers,” it said.

Indeed, South Australia is one of the few states in Australia that still sets a baseline solar tariff. In most other states there is no mandatory tariff, just a recommended price guide that retailers are under no obligation to follow.

And, as we have noted here, that has not worked out well for most solar households, which in some states are barely catching up with the big increases being pocketed by the utilities with large amounts of coal and gas power.

Households in Victoria are getting the worst deal, being paid only 5c/kWh by the major retailers, under guidance from a formula put together by the Essential Services Commission.

In South Australia, the ESCOSA decision comes at a time where consumer confidence in the function of the electricity market is at an all-time low – an unfortunate irony Solar Citizens is keen to highlight.

“When electricity prices in South Australia have only just last month risen by 10 per cent, it’s incredible that the regulator now thinks a fair price for solar households is effectively zero cents,” said Solar Citizens national director Claire O’Rourke in an statement on Thursday.

“The commission said their decision was based on its view that the market structures that facilitate electricity retail competition are ‘sound’ and continued regulation of the Feed in Tariff might ‘inhibit competition’ in the future.”

“Either the ESCOSA has a real lack of understanding in the South Australian electricity market or an incredibly short memory. It is the lack of competition in the South Australian electricity market that has been widely identified as a major reason behind recent wholesale price spikes,” she said.

“Tens of thousands of solar owners in South Australia will now be offered nothing for their excess solar sent to the grid and that is a loss for all electricity consumers in South Australia.

“The decision …ignores the huge value of rooftop solar in South Australia that has helped provide reliable, cheaper electricity and reduce the price of electricity for all South Australians.

“If we want to encourage a smarter way of generating cheaper energy, we should be valuing solar electricity. Solar power, especially when coupled with battery storage, can provide the solution for higher electricity prices.”

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9 Comments
  1. wmh 4 years ago

    With a zero feed-in tariff, PV owners might be tempted to simply switch their arrays off when not in use or give their PV energy away to the next door neighbour.
    A better idea would be to divert this energy to heat the water in their domestic hot water system using one of the diverters now on the market.

  2. Steve Fuller 4 years ago

    With the energy landscape changing before our eyes with continuing deployment of renewables innovations our governments and regulators are hell bent on keeping the brakes on.

    The transition away from polluting fossil fuels is increasing in urgency with every day that we delay. The energy transition promises new industries and jobs for those willing to engage and SA has done a pretty good job so far.

    Punishing those South Australians who have willingly spent their own money to hasten the transition to renewables is surely about as dumb as you can get.

    I can feel a campaign for a fair feedin tariff for all Australians coming on. The people united………….

  3. GlennM 4 years ago

    They certainly are giving the middle finger to Solar households. Knowing Aussies they are likely to get one back by a significant increase in battery storage. No one likes to be bullied, and solar households, almost by definition have the will and the financial resources to install additional kit ,

  4. DevMac 4 years ago

    This may not be as bad as it seems on the surface. This could trigger greater acknowledgement of the positives of solar households within a retailers customers, and so “the market” may provide a solution that doesn’t leave solar households with nothing for their contribution to the grid.

    I’d like to see the retailers clamouring for solar households so they can tap into the cheaper energy provided by solar households than other energy sources.

    I have no idea how likely this is, but if it doesn’t happen then batteries jump up another level in their rise towards making economic sense. And maybe that’s not a bad thing in itself either…

    It could be a win for the environment despite initially appearing to be a loss. If us solar households are truly green (as opposed to simply being economic opportunists), then we should be rooting for whichever solution is best for the environment in the long term.

  5. Craig Allen 4 years ago

    I don’t understand why there aren’t any companies setting about buying aggregating and reselling electricity from solar households. I can understand why big retailers don’t want to encourage home producers. But why no-one else? There is profit there begging to be had.

    • Analitik 4 years ago

      Yes. With record high electricity prices, it’s almost as if they can’t give the household solar PV generated power away. Guaranteeing supply may be an obstacle for an aggregator – a hedge with a conventional supplier would be needed to overcome this.

  6. solarguy 4 years ago

    If the regulator is a government body, then it is state sanctioned theft by the incumbents!
    If solar households were to get organized and turn off their solar in a protest, the grid will be left with a power shortage. That should get them thinking. Or send the bastards an invoice for the power provided. They won’t be able to disprove the amount as the they would have argue in court that there metering is wrong. Could set a precedent!

  7. MaxG 4 years ago

    Keep on dreaming about justice, or even social justice — the government represents the corporations, while Joe Public is being fleeced… I am dangling on a thread: no FiT of 6 Cents (here in QLD) and I will cut the chord, as the generator @ $2,000 is cheaper than the $500 connection fees I am in for each year.

  8. Daniel 4 years ago

    We need those families who study and work at home during the daytime, to step forward and lead the paradigm shift into PV/storage. They can easily get a financial winner by getting off the majority of the export/import roundabout. These people need only purchase a relatively small battery. Their PV need only be slightly oversized for summer. This will enable all their capital investment to return the swiftest payback. We need leaders to get some runs on the board for the new paradigm, while building our community knowledge base for the comparison of new entrants manufacturing batteries. We need to hear their stories around what the batteries can and cannot do and what strategies are proving most advantageous for bill reduction.

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