SA's solar feed-in scheme costs to rise higher

7th Aug 2013

The solar feed-in scheme that was introduced in February had good intentions.

Through the program, homeowners who installed a solar photovoltaic system were eligible to be paid by the government for any excess electricity that was generated by the system and introduced back into the grid.

Now, however, it appears the government has a bit of a mess to clean up. According to The Australian, vendors will likely see a late-stage surge in demand for solar panels in August, the last month customers can sign up for the feed-in tariff.

With more people demanding payment for their excess power, already sky-high electricity rates will likely rise to meet the terms of the scheme. South Australia distribution company SA Power Networks stated that the total cost of the program could be as high as $1.53 billion, which will take 20 years to pay off.

And who gets stuck with this bill? The electricity customers. Early estimates peg the program to cost SA electricity customers an extra $90 every year for the next three years. After this, it will drop a mere $18 to $72 a year.

However, not everyone is against the rebate program. Some say it has, in fact, lowered costs, just not where many residents think to look.

A deeper look

According to The Australian, solar power company Zen Energy says the excess electricity that has been integrated back into the grid has been instrumental in lowering the cost of electricity transmission.

"If it weren't for solar panels SA Power Networks would most likely have to spend more money on the grid to supply that extra electricity,'' Zen Energy founder Richard Turner explained.

Tim Flannery, leader of the Australian Climate Commission, agrees, saying that large utilities actually have less customers to worry about, which can lead to lower costs.

"For every person with solar panels on their roof, that's effectively one less customer for the big utilities," he said, according to the Australian Broadcasting Corporation.

"It's changed the time where the peak load occurs and it's also helped to cause a decrease in the overall size of the electricity market."

The root of the mess lies in the drop in solar panel installation prices, which Australians have taken advantage of.

Mr Flannery estimated these costs have fallen by as much as 80 per cent in the last four years, and when the rebates were introduced, many saw it as the perfect opportunity.

Posted by Bob Dawson

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