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NSW Feed-in-Tariff a Fizzle

March 14, 2012

The regulator which was handed the thankless task of coming up with a fair and reasonable ‘unsubsidised’ feed-in-tariff rate for solar PV in New South Wales has come to a final conclusion.

The fact sheet can be accessed here.

The final price that they’ve come up with for exports to grid is in fact a wider range than previously indicated:  $0.052-$0.103 per kWh for 2011/2012, taking into account the value to the retailer and to the wholesale market of the electricity.

The NSW State was saddled with massive legacy budget costs following the over-generous gross feed-in-tariff instituted under the previous administration of $0.60/kWh.  This review result is deemed to result in no additional cost to either consumer or the State coffers.

The report suggests that IPART comes up with an annual benchmark rate against which to assess retailers’ offers (ascertained here).

This tariff isn’t going to get raucous applause from the solar industry.  However, with retail PV panel rates now below $1 a Watt, the private sector should be able to come up with offers to make PV attractive to consumers relative to consumer electricity retail prices (approximately $0.20-0.30 per kWh) for most places in Australia.

While on a price basis this decision may look like it has established a level playing field, split incentives between landlords and tenants; and upfront capital costs will  both act as drags on deployment.

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