Carbon-exclusive regional feed-in tariff

The Queensland Competition Authority (QCA) today reminded customers in regional Queensland that the 9.07 cents/kWh solar feed-in tariff paid by Ergon Retail will soon be reduced to 6.53 cents to align with the lower value of wholesale energy after repeal of the carbon tax. 

“Repealing the carbon tax in July this year cut the cost of wholesale energy and therefore the value of the electricity imported into the grid from domestic solar panels,” said QCA Chairman, Malcolm Roberts.

“In May, the QCA released a report indicating that repeal of the carbon tax would reduce the value of energy from solar panels from 9.07 cents/kWh to 6.53 cents. After the carbon tax was repealed, the QCA confirmed the switch to the lower price in a gazette notice on 11 August. 

“The QCA understands that Ergon Retail intends to apply the new rate from 1 October.

“For the QCA, the basic principle is that a fair and reasonable feed-in tariff should be equal to the real value of the electricity sold back to the grid. Retailers avoid some costs by on-selling electricity from solar panels to other customers. The most significant avoided cost is the cost of buying wholesale electricity. 

“A fair and reasonable feed-in tariff is equal to these avoided costs. Setting the feed-in tariff rate below this level would disadvantage customers with solar panels; setting the rate above this level would just increase electricity costs for other customers,” said Malcolm Roberts. 

This approach to setting feed-in tariffs is widely used in Australia. In the case of Queensland, it was first outlined by the QCA in November 2012.

NB. The change to the 9.07 cent feed-in tariff will not affect customers receiving the 44 cents solar bonus feed-in tariff. Eligible customers for the solar bonus scheme will continue to receive 44 cents/kWh.

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