Projects

2014 Retailer Feed-in Tariff

Stage:
Further Info
Released:
24 Jul 2014
Closes:
31 Dec 2013
Project Type:
Pricing & access
Contact Person:
Nathan Petrus

The Commission reviewed the need for, or nature of, future price regulation of the Feed-in Tariff premium, payable by electricity retailers to solar PV customers.

The Commission has commenced a review of the need for, or nature of, future price regulation of the Feed-in Tariff (FiT) premium, payable by electricity retailers to solar PV customers.

All small customers with eligible photo-voltaic (PV) generators are currently entitled to receive the FiT Premium, which has been set by the Commission at 9.8c/kWh until 31 December 2013. The FiT Premium must be paid by retailers in addition to the feed in tariff (FiT) of 44 cents per kWh (for pre-October 2011 eligible PV installations) or 16 cents per kWh (for PV installations between October 2011 and the end of September 2013) which is payable by SA Power Networks.

The review will assess whether deregulation of the FiT premium should occur from 1 January 2014 in light of the deregulation of energy retail prices in South Australia in February 2013.

The Commission encourages all interested parties to make a submission to the Issues Paper. Written submissions must be made by 26 July 2013.

Publications

The Commission has received submissions on the Review of the Solar Feed-in Tariff Premium.

The Commission has received a document from the Solar Citizens group containing a large number of petitions based on a pro forma. The Commission notes that some submissions within the document also includes additional comments, but due to its privacy policy is unable to make them available in its entirety at this stage, although it is working to address this issue. Notwithstanding, the Commission will consider this document prior to making its final deliberation.

Furthermore, the Commission does note that the Solar Citizens document has also been sent to the offices of the Premier and the Minister for Mineral Resources and Energy.

Submissions are now closed. The Commission wishes to thank all contributors for their submissions to this important issue.

Submissions

The Commission has today released for public consultation a Draft Price Determination in respect of the minimum electricity feed-in tariff payable by electricity retailers to customers with solar photovoltaic units.

The Commission’s draft determination is that it will make a further one-year price determination setting the minimum retailer feed-in tariff at 7.6c/kWh (reducing it from the current level of 9.8c/kWh). The minimum amount fixed by the Commission is at the lower end of the reasonable range of fair and reasonable value to an electricity retailer of electricity fed-in to the distribution network.

Selection of 7.6c/kWh represents a cautious and measured approach, recognising that the value of wholesale electricity has fallen significantly over the past 12 months while, at the same time, also recognising that there remains uncertainty as to how competitive the market for solar PV customers is in this State. Setting the value at 7.6c/kWh will provide a safety net for solar PV customers while at the same time encouraging electricity retailers to compete for those customers by offering higher voluntary feed-in payments.

As well as setting the minimum tariff, the draft price determination provides for the introduction of a formal price-monitoring regime in respect of the feed-in tariff amounts paid by electricity retailers. This will allow the Commission to monitor the extent of competition for PV customers and the incidence of feed-in tariff above the mandatory minimum 7.6c/kWh over the coming 12 months. Evidence provided through that process will inform the Commission’s future decision as to whether or not a further price determination is required.

The Commission invites submissions from all members of the community on this Draft Price Determination, with submissions due on or before Friday 1 November 2013. All submissions will be placed on the Commission’s website, subject to any confidential material being excluded.

The Commission intends to release a Final Decision in early December 2013.  If the Commission elects to make a Price Determination (whether or not on the same terms as this Draft Price Determination) as a result of its Final Decision, then that determination will take effect from 1 January 2014.

Publications

The Commission  has finalised its review of the Retailer Feed-In Tariff  which electricity retailers must, under the provisions of the Electricity Act 1996, pay to solar photovoltaic residential and small business electricity customers whose solar photovoltaic generators feed electricity into the distribution network.

The Commission has today released its final decision in respect of the minimum retailer feed-in tariff payable by electricity retailers to customers with solar photovoltaic units.

The Commission’s final determination is that it will make a further one-year price determination setting the minimum retailer feed-in tariff at 7.6c/kWh (reducing it from the current level of 9.8c/kWh). The minimum amount fixed by the Commission is at the lower end of the reasonable range of fair and reasonable value to an electricity retailer of electricity fed-in to the distribution network. From 1 January 2014, all electricity retailers are required to pay at least that minimum retailer feed-in tariff amount to PV customers for electricity exported into the distribution network, although they may offer higher amounts.

Further, the Final Price Determination provides a mechanism that would reduce the minimum retailer feed-in tariff to 6.0 cents/kWh in the event that the carbon price is removed.

From 1 January 2014, a formal price-monitoring regime will also be implemented to monitor the extent of competition for PV customers and the incidence of payments above the mandatory minimum retailer feed-in tariff  value over the next regulatory period. Evidence provided through that process will inform the Commission’s subsequent decision as to whether to continue to set a minimum retailer feed-in tariff.

Publications

Repeal of Carbon Price: Impact on Minimum Retailer Feed-in Tariff

The Parliament of Australia has repealed the Clean Energy Act 2011, which abolishes the carbon price, effective from 1 July 2014. The 2014 minimum Retailer Feed-In Tariff (R-FiT) price determination incorporated a mechanism to allow the minimum R-FiT payment amount to be varied in the event of the carbon price being removed.

As this has now occurred, the carbon price component of that minimum R-FiT payment amount will no longer apply from 1 July 2014. From 1 July the minimum R-FiT payment amount will be 6.0 cents/kWh (it was 7.6 cents/kWh for the period that there was a carbon price)

All customers that export energy from qualifying solar photovoltaic (PV) generators are now entitled to receive at least 6.0 cents/kWh from 1 July 2014 until 31 December 2014. The Commission will be conducting a review of the R-FiT to apply from 1 January 2015 in the coming months.

The minimum R-FiT does not mean that electricity retailers are required to set the R-FiT at 6.0 cents/kWh – retailers can, and are encouraged to, offer payments above that amount.

South Australian consumers should compare offers from electricity retailers to ensure they have an energy contract that best suits their needs. The Australian Energy Regulator operates a free energy price comparison service (available online at www.energymadeeasy.gov.au or by calling 1300 585 165) that allows consumers to compare offers from electricity retailers in South Australia.

All documents associated with the Commission’s review of the 2014 R-FiT may be accessed from the Commission’s website (www.escosa.sa.gov.au).