IPART releases solar feed-in tariff recommendation for NSW

IPART, the Independent Pricing and Regulatory Tribunal, has determined that a “fair and reasonable” solar feed-in tariff for New South Wales consumers is in the range of 7.7 to 12.9 cents per kWh for electricity exported to the grid.

The feed-in tariff is for customers not eligible for the NSW Government’s subsidised Solar Bonus Scheme.

While IPART’s determination provides a guide as to the value of solar electricity exported to the grid, retailers are not obliged to offer feed-in tariffs within this range and are able to set their own tariffs.

Retailers’ offered tariffs will be available on the MyEnergyOffers.nsw.gov.au website, allowing customers to shop around for the best offers.

“This benchmark range represents the fair and reasonable value of electricity exported to the grid by PV customers during 2012/13,” said IPART CEO Jim Cox. “The value of this electricity is higher than previously estimated by IPART for 2011/12 due to the introduction of a carbon price, which increases the cost of wholesale electricity.”

The 2011/12 range was 5.2 to 10.3 cents per kWh.

Some members of the solar industry have suggested a one-for-one tariff, whereby the customer would receive payment equal to the full retail price. IPART said it has recommended a lower price than a one-for-one tariff as retailers still incur costs on the electricity exported to the grid by PV customers.

“As part of our Final Report, which was released in March 2012, we considered the solar industry’s proposal carefully. While retailers are able to supply electricity generated by solar PV units to other customers, they incur costs in doing so,” said Cox.

“This includes charges for transportation across the networks and costs associated with meeting green scheme obligations. That is why our decision on the benchmark range for the feed-in tariff is less than the retail price.

“Setting a higher feed-in tariff than 7.7 to 12.9 c/kWh for 2012/13 would involve a subsidy, incurring costs that need to be recovered from higher electricity prices or the NSW budget.”

IPART expects retailers will reduce or eliminate voluntary premiums that some retailers have been paying Solar Bonus Scheme customers once the retailer contribution is introduced. IPART said it is reasonable for retailers to contribute towards the cost of the Solar Bonus Scheme to lessen price increases for customers.