Moreland Energy Foundation

In transition to the new Transitional Feed-in Tariff

As mentioned in our previous MEFL Blog post, the 60 c/kWh Premium Feed-in Tariff (PFiT) was effectively closed at the end of September. As a result, all new solar PV systems connected to the grid after 30 September 2011 won’t be able to get the 60 c/kWh available under the PFiT, but will instead be in a state of transition before the new ‘Transitional Feed-in Tariff’ (TFiT) comes into effect next year.

What you need to know

Yesterday, the Victorian Government announced that it will close the Premium Feed-in Tariff when the scheme hits its cap. This is expected to occur towards the end of November this year.

If you have recently installed solar, paid a deposit or purchased a solar system, but have not yet finalised all the arrangements to receive the Premium Feed-in Tariff -  read on!

Below are detailed instructions on what you need to do to have the best chance of getting in before the scheme closes.

If you're about to install solar, the Government has said you're unlikely to get in before the cap is reached. Instead, you may be eligible for a Transitional Feed-in Tariff at a lower rate of 25c. There's more information about this transitional arrangement below.

Oh, and if you're already receiving the Premium Feed-in Tariff have no fear! This announcement doesn't affect you at all. You will continue to receive the Premium Feed-in Tariff for fifteen years or (depending on when your system was installed) until the end of the scheme in 2024.

Canada has become something of a showpiece for feed-in-tariff (FiT) policy around the world, particularly the province of Ontario, which recently established a set of FiTs covering a broad range of system sizes and different technologies. As well as helping Ontario achieve its ambitious plan to phase out coal-fired power by 2014, the plan has begun delivering economic benefits.

Feed-in-tariffs are the most widely used mechanism around the world to incentivise the installation of renewable energy. And the trend appears to gaining pace.

MEFL has prepared a submission to the Medium Scale Working Group within DPI about the best way for the government to support people wishing to install medium sized solar energy systems.

Current situation

Currently, there is support in Victoria for small solar systems in the form of the Premium Feed-in-Tariff (PFiT).  However, this only applies to systems up to 5kW in size.  The Brumby Government promised to establish a feed-in-tariff for large scale solar systems, but it is unclear whether the Baillieu administration will support it.  At any rate, there is a gap in support for medium-sized installations, and the purpose of the review was to identify measures to address this gap. 

Main points of our submission

MEFL's submission focused on:

• the significant upfront cost of installation, combined with long payback periods
• the limited time and resources of potential medium-scale solar customers to properly research investing in medium-scale solar
• the limited awareness amongst potential customers of the costs, benefits, risks and opportunities of solar, and the limited availability of independent, accessible and user-friendly information
• regulatory barriers
• policy uncertainty. 

We also stressed the extraordinary opportunities for community involvement in medium-scale solar projects, as demonstrated by the recent Hepburn community owned wind farm.  Download the full submission.

We will continue to work with the new Government on these issues, and would welcome any input from readers on these or any other issues relating to energy or sustainability.

People interested in solar power may have noticed an increase in media attention to solar recently, following the NSW Premier's decision to dramatically reduce the NSW feed-in-tariff.

Some media reporting has drawn a link between solar and other renewable energy policies (including feed-in-tariffs) and electricity price rises, and some reports have gone so far as to suggest that solar schemes are heading the same way as home insulation. This article attempts to explain the costs, benefits and objectives of solar energy policies, and dispel some of the myths surrounding these policies.

MEFL has recently received a number of phone calls from disappointed residents who have found they are paying more for their electricity after installing solar.

Many Moreland residents are finding they are shifted onto different rates, or ‘tariffs’, for the electricity they buy after they’ve installed solar and signed up for the solar Premium Feed-in Tariff. Typically, people are being shifted from flat-rate tariffs of around 17-19 c/kWh, onto ‘time-of-use’ tariffs, with off-peak rates as low as 12c/kWh, but peak rates up around 26-28 c/kWh. With the off-peak period defined as from 11pm to 7am, there is little opportunity to benefit from the lower off-peak rates.

MEFL has been involved in a campaign for an effective renewable energy feed-in tariff in Victoria since early 2008, when the Victorian Government announced it would introduce a model that MEFL considers to be seriously flawed. Along with organisations including Environment Victoria, the Alternative Technology Association (ATA), the Clean Energy Council and a host of other groups and businesses, MEFL has repeatedly called for the Victorian Government to amend its proposed model.

After months of negotiation, the Victorian Parliament finally passed solar feed-in tariff legislation in June this year - more than two-and-a-half years after first being announced as an election promise by the State Labor Party. Following extensive lobbying by MEFL and others, the legislation was modified at the 11th hour to allow local governments, community groups and business to access the feed-in tariff, as well as extending the maximum system size from 3.2kW to 5kW.

Although we were unable to secure a change from a 'net' feed-in tariff to the vastly superior 'gross' feed-in tariff, MEFL is still pleased that we were able to secure some improvements to the scheme.

MEFL's key concerns with the legislation passed is that it is based on 'net' metering, meaning that the system owner is only credited for excess electricity fed into the grid, after in-home consumption (Net feed-in tariff). Further, it is not possible for a solar system owner to actually be paid for the electricity they generate under the proposal, with any credit earned only able to be used to offset your electricity bills.

We will continue to lobby for changes to the Victorian scheme as well as for the adoption of a gross feed-in tariff nationally.

The Victorian proposal is very different from the type of model that has been successful in driving the renewable energy industry in Germany and 43 other countries around the world, where owners of renewable energy generators are paid a premium for all the renewable energy they produce. Known as 'gross' feed-in tariffs, these models have been shown to be extremely effective in boosting the uptake of renewable energy.

Elsewhere in the world, feed-in tariffs apply to a range of different renewable energy sources, are available to community organisations, businesses and householders, and reward the entire amount of energy that a system produces. MEFL continues to urge the Victorian Government to come up with a model that will bring us in line with the international benchmark, helping to give a real boost to the renewable energy industry and allowing the community to play our part in combating climate change.

To find out more about feed-in tariffs and how they can be a key part of a decentralised energy network, download MEFL's position paper on decentralised energy.

Greens Senator Christine Milne introduced a Bill to the Australian Parliament in May 2008 for an amendment to the Renewable Energy (Electricity) Act that would establish a national feed-in tariff. The Bill proposed a gross feed-in tariff that would apply to all types of renewable energy generation, would not include a system size cap and would be available to householders, businesses and community groups. The Bill was referred to the Senate Environment, Communications and the Arts Committee for inquiry.

Visit the Senate website to find out more about the inquiry.