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Solar panel customers 'should benefit from feed-in tariff'

19th Mar 2012

If your household generates electricity using solar panels that feeds back into the grid, you should be eligible for a fee-free feed-in tariff if you are not eligible for other NSW government incentives, such as the Solar Bonus Scheme.

This is the conclusion of a new research paper published by IPART - New South Wales' Independent Pricing & Regulatory Tribunal.

State premier Barry O'Farrell requested an IPART investigation in August 2011 to determine a fair and reasonable value for electricity generated through household solar panels and other small-scale solar photovoltaic (PV) systems.

The findings of this investigation, published in a research paper yesterday (March 14), indicate that saving money on retail electricity bills is the main financial benefit for people who install solar panels - but establishing a subsidy-free feed-in tariff for those who are not eligible for the Solar Bonus Scheme will also support solar panel installation.

For example, if you install a typical 1.5 kW solar photovoltaic unit with net metering, IPART estimates that you can benefit from savings of up to $300 a year on your electricity bill - and could earn about $50 a year from a subsidy-free feed-in tariff.

This is because the average household with solar PV panels only uses two-thirds of the electricity they generate - meaning that the remaining energy can be fed back into the grid.

Establishing a "fair and reasonable value" for this electricity is essential - particularly with electricity prices widely tipped to rise when the carbon price is introduced later in the year.

IPART concludes that for 2011-12, a subsidy-free feed-in tariff f between 5.2 and 10.3 cents per kilowatt hour is a reasonable benchmark range.

While the figures are wider than those recommended in an earlier IPART draft report, chief executive officer Jim Cox asserts that the latest numbers take more customers into consideration.

He said: "This benchmark range represents the fair and reasonable value of electricity expected to be exported to the grid by PV customers during 2011-12."

Figures will need to be adjusted again in June for 2012-13, he added, as the value of electricity will rise in the coming year due to the introduction of the new carbon pricing mechanism.

Cox also noted that more needs to be done to help solar PV customers make informed choices when it comes to solar panel installation.

Better competition in the solar industry will also lead to more choices for anyone considering a solar panel installation, he explained - adding that this will empower customers to seek out the best feed-in tariff rates.

Posted by Bob Dawson

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