We are required to set a benchmark range for feed-in tariffs that will not lead to increased electricity prices or require any additional funding from the NSW State Budget.
To do this, we estimate the value that electricity retailers receive when solar customers export electricity to the grid from their small-scale solar units.
The three components that make up this value include:
- the amount that exported solar electricity would earn if it were sold on the wholesale electricity market at the time it was exported (retailers avoid paying for this)
- an amount to reflect the benefit of exported electricity being located close to where it is used (normally some electricity is lost as it flows long distances over the transmission and distribution network)
- an amount for the market fees and charges that retailers avoid paying for on exported solar electricity.
We are also reviewing our methodology to consider other issues, such as:
- whether to take into account new information, such as data from the Endeavour and Essential networks (the current benchmark range is only based on Ausgrid data because it has previously been the only network with enough data)
- how the uptake of batteries might change when energy is exported to the grid.