Feed-in Tariff Sensibility

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Finally, some half decent news for the renewable energy sector in Victoria. A Bill, the Electricity Industry Amendment (Premium Solar Feed-in Tariff) Bill 2009, was tabled in the state parliament yesterday. After many letters to our politicians, and lobbying by environmental groups.

The Energy and Resources Minister, Peter Batchelor sent me this press release.  Wasn’t that nice of him.  It must have been the 3 letters and 4 emails I sent him about the issue that might have prompted him to notify me personally!

VICTORIAN GOVERNMENT TO FUND NEW SOLAR POWER STATION

The State Government will provide up to $100 million to develop a new large-scale solar power station in Victoria, Premier John Brumby announced today.

“Our Government is taking action to change Victoria’s energy mix and promote renewable energy and we will be seeking proposals for a solar power station which can produce about 330GWh of electricity per year or enough power to run 50,000 homes,” Mr Brumby said.

“Alternately, this would be enough power to run all Victorian Government departments and agencies, including public schools, police stations, VicRoads and even the Melbourne Zoo.

“Solar has huge potential in Victoria and large-scale solar is the most economical form of solar energy generation which is why we are providing this funding.

“This project is expected to drive investment and create jobs in regional Victoria.

“Expressions of interest will be called for immediately and the aim will be to have the plant operating by 2015.”

Mr Brumby said the Victorian Government funding would be subject to the project receiving matching funding from the Federal Government.

“We have fast-tracked this project so companies can tap into the Federal Government’s funding available under the Renewable Energy Demonstration Program,” he said.

“Solar power generation is expensive because the solar industry is still in its infancy. The way to drive down the cost is to speed up development of solar plants which is why the Victorian Government will provide funding for a new solar power station.”

Mr Brumby said the funding was just one of many Victorian Government initiatives designed to increase renewable energy sources such as solar energy.

“This Government is supporting the full spectrum of solar generation and has provided a $6 million grant for the Organic Solar R&D project and $50 million through our Energy Technology Innovation Strategy for the Solar Systems 154MW large-scale solar plant near Mildura,” he said.

“Our Victorian Renewable Energy Target (VRET) has already attracted $2 billion in renewable energy investment and will create more than 2000 jobs, and we have invested $5 million to install solar power infrastructure in 500 schools and community buildings.”

Energy and Resources Minister Peter Batchelor said the latest proposal would provide a massive boost to large-scale solar development in Victoria and would help diversify the state’s renewable energy mix.

“These projects coupled with the announcement today represent more than $1 billion worth of investment in solar projects in Victoria,” Mr Batchelor said.

“It will be the second large-scale solar project in Victoria and will make us the most solar friendly-government in Australia.”

The large-scale investment will be complemented by a Bill introduced into Parliament today to support Victorian households to invest in solar photovoltaic (PV) systems.

Mr Batchelor said the feed-in tariff scheme was about increasing the number of Victorian households with solar panels by making them more affordable.

“Under the Bill, Victorian households with solar PV systems will be eligible to receive a credit of 60 cents per kilowatt for energy they feed back into the grid,” he said.

“The premium feed-in tariff scheme is capped at 3.2kW, which is about the maximum size system for a large house.

“The Brumby Government recognises the importance of assisting individual households prepared to act on climate change and this scheme encourages households to be energy efficient, as the more power they save the higher their payments.

“Our scheme strikes a balance between helping households implement solar technology and minimising the cost imposed on all Victorian residential electricity customers.

“This premium feed-in tariff scheme will run for 15 years, be available to new and existing small scale systems and will allow up to 100,000 households to participate.”

Environment Minister Gavin Jennings said the Victorian Government’s broad support for solar generation, from households to large-scale, would help ensure solar was established as an affordable and integral part of Victoria’s energy mix.

“We want to help Victorians do their bit to reduce their carbon footprint, but for those unable to afford solar panels we want to continue to encourage investment in large scale solar so everybody can access cleaner, greener energy.”

I feel that this is a partial win for people trying to do the right thing by the environment.  I also like the fact that they are building a second large scale Solar Power plant in the state.  However, they need to build at least 100 more by 2015, so we might get part of the way to reducing our reliance on coal fired power stations.

I am still holding my breath because the bill is yet to pass through both houses in to law. This should happen over the next few days. It has passed its first reading in the lower house, but was ordered to have a second reading today.

I have put together a list of pros and cons regarding the FIT legislation

Pros

• Cap for PV systems increased from 2kW to 3.2kW
• System owners are paid 60 cents per kWh for each kWh fed into the electricity grid
• Scheme runs for 15 years
• New and existing installations are eligible

Cons

• Feed-in tariff is based on net metering only
• Does not apply to other forms of renewable energy e.g. residential wind, micro hydro
• Is capped at a limit of 100,000 homes
• Only applies to residential homes and not businesses
• Not a national gross feed-in tariff

So what does this mean for me? Well, because the system cap was raised, I am now eligible for the FIT like so many more families, which is great news. I have calculated that we use most of our electricity during the evening, and we will feed most of the energy back into the grid during the day.  This means that we receive a premium for it. So on an average spring or autumns day, we produce, on average 13 kWh (more in summer) and would feed about 11 kWh back into the grid. That gives us a payment of roughly $6.60 per day, and if you calculate that out for 6 months equals $1205 in tariffs paid to yours truly for half the year. Winter generation is much lower, and Summer is much higher, so they will probably equal out over the two seasons. So a whole year could be as high as $2400 for a system of my size with maximum feed-in during the day. As we only draw a small amount from the grid at night, we will not be paying much over all. Happy days!

So, who says that sending letters to our elected officials doesn’t count for anything! I consider this a small win for people power, the reduction of greenhouse gases globally, and the renewable energy industry in Victoria.  About bloody time!