Energy
Electricity

Solar feed-in tariffs 2018/19

Status
In progress
Start Date
Feb 2018
Final Report
Jun 2018
What

In NSW, retailers can choose whether or not to offer solar feed-in tariffs to their customers, and decide the level of the solar feed-in tariff that they offer.  However to help guide retailers and customers, each year IPART recommends a benchmark range for solar-feed in tariffs. 

The current benchmark range for 2017/18 is  11.9 to 15.0 cents per kilowatt hour (c/kWh) (not including GST). This review will update this range for 2018/19.

Why

We update the recommended benchmark range each year to take account of the latest market conditions.  The value of exported solar electricity depends mainly on how much retailers save from buying wholesale electricity in the market.  This means solar feed-in tariffs will go up and down with changes in the wholesale electricity price. 

The benchmark range for 2018/19 is likely to be lower than it is currently.  This is mainly because forecast wholesale prices have fallen from an average of around 11 cents to around 8-9 cents per kilowatt hour.

Who

Our recommended benchmark range for solar feed-in tariffs is a guide for electricity retailers and residential and small business customers in NSW who have, or are planning to install, solar panels. 

Customers with solar panels can shop around for a feed-in tariff using the Australian Government's website Energy Make Easy.  The offer with the highest feed-in tariff isn't necessarily the best deal overall.  Solar customers should consider all aspects of an energy offer, including usage and fixed charges, feed-in tariffs and other terms and conditions.

IPART also has an Excel tool to help solar customers compare bills for offers with different feed-in tariffs and retail prices

How

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. 

Key issues under consideration in this year's review include:

  • which historical data should be used to help forecast benchmark prices

  • options for setting the benchmark range to capture the time of day that solar is exported.
What Next

We are consulting on our Issues Paper, which is open for submissions until 16 April 2018.  We will consider all feedback and publish a Draft Report in May.

Key Contact
Jessica Robinson
Email
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