Energy Matters Forums

[cws]

can anyone imagine anything other than a similar result to that which was suggested by IPART late last year

[Sojin_Muneshi]

"The terms of reference ask the Commission to assess the design, efficiency and effectiveness of feed-in tariffs, recommend whether existing feed-in tariffs should be continued, phased-out or amended and identify barriers to the development of a network of distributed renewable and low emission generation in Victoria."

http://www.vcec.vic.gov.au/CA256EAF001C7B21/pages/vcec-inquiries-current-inquiry-into-feed-in-tariffs---barriers-to-distributed-generation

The most likely outcome will be:

1. PFIT continues for its 15 years for existing customers

2. TFIT remains open until it reaches its Cap, and then continues for its 5 years for its existing customers.

3. "Fair and Reasonable" feed in value determined to be in the 8c to 12c range as per the ESCOSA and IPART decisions in SA and NSW.

4. Existing SFIT will be closed off by retailers with an end date for existing customers and a new Feed in Tariff from retailers based on the "fair & reasonable" rate will be introduced, and subsidised tariffs via the Network in the form of PFIT / SFIT will not be repeated.

regards

Sojin Muneshi

[Tracker]

"Fair and Reasonable" feed in value determined to be in the 8c to 12c range

Thinking as a retail supplier, they want as low a figure as possible.
Thinking as as PV owner, it's hard to consider 8 to 12c to be fair, when that customer might be paying 40 to 50c for that same power. (..and I bet there will be no indexation built into the figure..)
Admittedly, you are only getting ripped off for your surplus power, but in the interset of fairness, you would think they could consider distributed/renewable/free power, to be worth MORE for the environment.
ie. What does it matter, IF they made no profit on something they did not generate, and only supplemented the house-next-door..! ..ie. They should PAY at the current TOU rate.! and then that would be indexed..

So - the bottom line is that our Governments have generally decided that Green-Power is only good if the user is paying for it..
..
.

[cws]

So - the bottom line is that our Governments have generally decided that Green-Power is only good if the user is paying for it..
..

and come July 1 st, we will be paying for it.

I can only hope that by then the federal gov, will re introduce some support other than STC for small solar .

[Smurf1976]

[ What does it matter, IF they made no profit on something they did not generate, and only supplemented the house-next-door..!

The flaw in the electricity industry business model is that it recovers fixed costs largely through a hidden surcharge on consumption, thus requiring consumption to remain at a certain level in order to recover those costs.

The solution is to separate out the fixed versus variable costs, thus removing all subsidies between consumers with varying consumption levels. This was tried in Tasmania circa 1994 - 95 but was a political disaster at the time and will not likely be tried again.

Once it was abandoned, the industry dropped the "use wisely" mantra in favour of literally using the slogan "Use our Energy" in a blatant attempt to drive consumption as high as possible in order to recover fixed costs via consumption whilst maintaining low unit rates so as to avoid the "snowball effect" of declining consumption = higher rates = more declines = even higher rates which is now being faced by some suppliers where solar has become widespread. Left unchecked, that inevitably ends as a spiral into bankruptcy.

Even Australian Standards wiring regulations (AS3000) were routinely ignored at the time if doing so was a means of pushing up a customer's electricity consumption, generally via the installation of electric space heating. There's plenty of homes where 7kW space heaters were added even though that could overload the consumers mains coming in from the street. The rationale was simply that if it really did overload, the service fuse would blow and that the electricity supplier would have to come out and change it, most likely on a Winter evening. But the cost of replacing a few fuses was minor compared to the prospect of selling vastly more electricity and recovering fixed costs that way.

The other states all did the same thing, albeit in a milder form. That's why the utilities historically encouraged consumers to use more electricity. Anyone over a certain age will remember the ads no doubt. If it had a plug attached and made the meter turn then "your local electricity people" were on a mission to convince you that you needed to not just buy one, but use it as much as you could as well. If consumption didn't go up then the utilities faced financial trouble, if it went down then they'd actually go broke. Hence the advertising.

The issue will come back in a big way if solar PV becomes truly mainstream, at which point all states will basically end up with no choice other than to introduce a "Network Charge" (as it was known) or similar at a fixed, flat rate. In very rough terms, expect to pay $200 a quarter without turning anything on at today's likely rates plus a unit rate that is perhaps 10 - 15c a kWh or somewhere in that order. The actual rate was about $100 per quarter back in the mid-90's with a 6.6c unit rate (even lower for heating or off-peak) and I'm just roughly scaling up from there.

The issue was hotly debated in Tas at the time and there are countless reports, submissions and the like relating to it. The charge is legit in that the costs are real, but it became pretty clear that those who benefit from recovery via a consumption charge (mostly shacks, single people at work all day etc) are a big enough group to be of political significance.

I have solar PV (2.88 KW) on my house but I'm well aware that there's a lot of economic issues here and that it's not at all straightforward in an environment where energy flows in two directions and the supplier has no certainty that the consumer will have a reasonable level of consumption.

[cws]

A good post SMURF. It highlights the fact that small solar will always be fighting a losing battle when it comes to taking on the electricity generators/ distributers/ retailers.

Of course it doesn't help that the solar industry loves to treat its competitors like the enemy, instead of its true enemy.

Unfortunately it wil probobly be our children who live in a world where there is cooperation between them

[Greg. P]

Mmmm... Yeah I read a small article in the Sun Herald about the review being announced other day and wondered how many readers actually noticed it. Makes me very nervous... Didn't the NSW state government change their rules after a similar investigation and slashed their F.I.T. rates?

Isn't Ted under pressure to cut electricity costs for all those mortgage belt marginal seats? Mmmm... Maybe a 'under the table' deal has already been done between the large power companies and the state government... Would be a pretty disappointing outcome and large disincentive to solar, particularly after we all know (and governments are now recognizing this fact as well) what's happening with climate change, the advantages of small generators like us, who not only reduce carbon emissions, but build capacity into their power grid...

If the Victorian government decides to (or already has decided to) dump the feed back tariffs why can't all of us who like me will feel a little conned (hey, I thought we signed a contract?) get together with someone like Maurice & Blackman or Slater & Gordon and claim compensation through a large joint action?... I for one would never have invested in such large system if the payback time was not under 6-8 year mark...

If they dropped the 66c FIT tariff I think I would be out of pocket about $2000 to $2500 per year!

It's wrong, surly they can't change the rules now!

[cws]

If they dropped the 66c FIT tariff I think I would be out of pocket about $2000 to $2500 per year!

i don't think you have anything to worry about if you are already connected.

[famlea]

Yeah we too will be out of pocket a great deal of monies. It stinks, i'd be in the glass action if this happens.

[cws]

i'd be in the "glass" action if this happens

I hardly think drinking is the answer to your problems