Tasmanian electricity customers with an electricity generating system connected to the distribution network (such as a rooftop solar panel system or wind turbine) are able to make savings on their electricity bills by generating and using their own electricity rather than buying it from a retailer (‘self-consumption’). When they don’t use all the electricity they generate themselves, the excess is exported to the network and they are paid a ‘feed-in tariff’ (FiT).
These 'distributed generators' are connected to the network through import/export meters which record the electricity imported from, and exported to, the network. The amount paid to customers per kilowatt hour (kWh) of electricity exported is based on a FiT rate.
How does the feed-in tariff work?
- Electricity is produced by solar panels or other electricity generating systems. You use the electricity you generate, so you don’t have to buy it from a retailer (ie all electricity ‘self-consumed’ is worth the same as the retail price you pay for electricity). Depending on your level of self-consumption, one of major benefits of having solar panels on your house is the savings on your electricity bill as a result of using the electricity your system produces.
- You export electricity back to the grid when you don’t use it. You are paid a feed-in tariff for the amount of electricity you export. This is where the FiT rate applies, for the excess electricity that goes back into the grid.
- You import electricity from the grid when the solar panels don’t generate enough electricity eg at night and during day-time peak periods in the morning and late afternoon (particularly during winter), when solar panels may not be producing very much electricity. This is particularly true in winter when there are relatively fewer daylight hours.
Benefits of a 5kW system to a homeowner
A homeowner with a typical 5kW solar PV system with average annual generation of 6 232 kWh could receive the following benefits:
+ $823 saved due to self-consumption (assuming 50% of the solar PV generation is used within the home (3 116kWh x 26.43c/kWh Tariff 31)
+ $266 FiT for electricity exported to the grid (assuming 50% of the solar PV generation is exported to the grid (3 116kWh x 8.541c/kWh FiT))
=$1 089 per year
*Benefits will vary depending on how much electricity is used within the home and how much electricity is exported to the grid.
FiT customers
There are two types of FiT customers in respect of premises with qualifying systems: standard and transitional. Standard FiT customers are those customers who installed a qualifying system but did not qualify for the Government’s transitional FiT rate. Standard FiT customers receive the regulated FiT rate for excess energy exported to the network. The eligibility requirements for the transitional FiT rate are set out below under the heading ‘Transitional Feed-in Tariff Rate’.
A “qualifying system" is a system that generates electricity from either solar, wind or water, complies with Australian Standard AS4777 and has a maximum generating capacity of 10kW for a single-phase system or 30kW for a three-phase system.
The Regulator determines the regulated FiT rate after conducting an investigation. Further information regarding the current 2016 Regulated Feed-in Tariff Rate
Investigation and Determination is accessible
here.
Government review of FiT arrangements
During 2018, the State Government conducted its own
FiT Review. In response to the
Review, the
Government decided, amongst other things, that Transitional FiT
customers would receive 5c/kWh, in addition to the regulated FiT rate, between
1 January 2019 and 31 December 2019.
Regulated Feed-in Tariff Rate Investigation
In December 2018 the Regulator commenced its scheduled pricing investigation to determine the regulated feed-in tariff rate to be applied from 1 July 2019.
Regulated FiT Rate
The Regulated FiT rates determined under the 2016 Regulated Feed-in Tariff Rate
Determination are as follows:
Table 1: Regulated FiT rates under the
2016
Regulated Feed-in Tariff Rate
Determination
|
Period |
c/kWh (excluding GST) |
| 1 July 2016 - 30 June 2017 | 6.671 |
The 2018-19 FiT rate is 4.3 per cent lower than the 2017-18 rate of 8.929 c/kWh.
This slightly lower rate was due to the decrease in the Wholesale Electricity Price (WEP) for 2018-19. Movements in the WEP have a major impact on the regulated FiT rate as outlined in the formula in the
2016 FiT Rate Determination.
Transitional Feed-in Tariff Rate
Under section 44D of the
Electricity Supply Industry Act 1995, certain customers are entitled to a Transitional FiT Rate.
To be eligible for this rate, customers had to have
: - a qualifying micro distributed generation system installed as at 31 August 2013; or
- a contract to install a qualifying new micro distributed generation system with the system installed and connected before 31 August 2014 and TasNetworks (the distributor) having received and approved the application by 31 August 2013; or
- a contract to extend an existing micro distributed generation system before 31 August 2013 with the extension installed and connected before 31 August 2014 and TasNetworks having received and approved the application by 31 August 2013.
Transitional FiT customers with billing periods (including parts of billing periods) expiring before 1 January 2019, are entitled to receive the FiT rates specified in the following table:
Table 2: Transitional FiT rates
|
Customer Type |
Column (1) |
Column (2) |
Column (3) |
| |
c/kWh |
c/kWh for first 500 kWh supplied during each billing period |
c/kWh for each kWh supplied after the first 500 kWh during each billing period |
|
Residential | 28.283 (including GST) | N/A - see column (1) | N/A - see column (1) |
|
Small Business | N/A - see Columns (2) and (3) | 38.577 (including GST) | 28.319 (including GST) |
Systems generating more than 10kW continue to be eligible for the transitional feed-in rate where the customer applied to connect the system, and the electricity distributor accepted the application, before 31 August 2013.
Background
In December 2012, the Council of Australian Governments (COAG) agreed on revised National Principles for Feed-in Tariff Arrangements (see Attachment B of the Regulator's
October 2013 Regulated FiT Final Report).
These revised principles outline, amongst other things, that all premium FiT arrangements were to be closed to new participants by 2014. Furthermore, all other FiT customers were to receive a 'fair and reasonable' value for their exported electricity. Consistent with this, premium FiT schemes are now closed to new participants and each Australian jurisdiction has determined new 'fair and reasonable' values for exported electricity for new FiT customers. Electricity retailers may voluntarily pass on a higher FiT amount as part of their unregulated market offers.
Before 30 August 2013, Aurora Energy voluntarily offered a FiT under its net metering buyback scheme (NMBS). The NMBS offered customers a 'one-for-one' (1:1) FiT at the regulated light and power tariff (Tariff 31 for residential customers) or general supply tariff (Tariff 22 for small business customers) for the amount of electricity exported.
Past Government Policy
As part of the 2013 electricity reforms and consistent with the reforms agreed to by COAG, a review of the FiT rate applying in Tasmania was carried out.
Following the release of an issues paper on 16 May 2013 and consideration of submissions received on that paper, the Government at that time announced the following policy position on 18 August 2013:
- the then current one-for-one FiT arrangement would be closed at midnight on 30 August 2013 and would continue to be available to existing customers until 1 January 2019;
- customers applying to install eligible micro distributed generation systems on or after 31 August 2013 would be entitled to a feed-in-tariff rate of 8 c/kWh from 31 August 2013 until 31 December 2013;
- the Regulator would determine the Standard Feed-in Tariff Rate to apply from 1 January 2014 for all new installations occurring on or after 31 August 2013 ; and
- the Regulator would review the FiT rate on an annual basis.
The Regulator subsequently carried out an investigation to determine the Standard Feed-in Tariff Rate to apply for the period from 1 January 2014 to 30 June 2016.
