Solar Energy Feed-in-Tariff

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					The State of Play

SOLAR ENERGY        Raymond Seeto
                    First Canton Consultants
FEED-IN-TARIFF
TODAY’S TOPICS

 Feed in Tariff
 News & Developments

 Solar Credits
FEED-IN-TARIFF
 A feed-in tariff is a premium rate paid for
  electricity fed back into the electricity grid from
  a renewable electricity generation source like a
  rooftop solar PV system or wind turbine.
 Feed-in tariff regulations for renewable
  energy exist in over 40 countries around the
  world.
 Australia currently has no nationalised
  program, only state run schemes.
GROSS VS. NET FEED IN TARIFF

 A net feed in tariff, also known as export
  metering, pays the PV system owner only for
  surplus energy they produce
 A gross feed in tariff pays for each kilowatt hour
  produced by a grid connected system.
BENEFITS OF A FEED IN TARIFF
   Simple way of incentives that would otherwise be
    uneconomical but provides a public benefit
   Can make small-scale renewable generation
    economically feasible. Combined with capital
    subsidies & REC, the rate of return and payback can
    be reasonable for the household
   Encourages individuals to invest in infrastructure that
    can unlock private capital that would otherwise be
    unavailable to a govt. to use in pursuit of energy policy
    objectives
F.I.T. BENEFITS – CON’T
   Costs incurred by utility in paying FIT is transferred to
    the entire energy consumer base. Advantage to
    consumers with FIT but not to consumers as a whole
   Overseas experience, mainly in Germany, suggests
    that FIT are effective in encouraging the uptake of the
    targeted technology
   Provides a clear and simple way for potential
    customers to calculate the returns they can expect
    from the installation
DISADVANTAGES OF F.I.T.

   FIT’s act as a cross subsidy, they change the
    structure of the market.
        Customers    are credited for energy at a higher price than
         normal wholesale rate
        Additional cost will have to be borne elsewhere in the
         industry
        Means retail price paid by other customer will increase

        Potential difficulty in competition and consumer
         legislation, which generally discourages cross subsidies
DISADVANTAGES OF F.I.T. – CON’T

   Cost of the tariff to other consumers are a
    function of the uptake rate
     Iffew people take advantage of the tariff, then the
      cost is negligible.
     The uncertainty of uptake adds considerable
      uncertainty to the outcome of the policy and the
      cost implications to the rest of the community
VICTORIA NET FEED IN TARIFF
   Victorian households with solar power systems will be paid a feed in
    tariff commencing some time in 2009. Legislation for the Victorian
    feed in tariff was introduced on March 10, 2009; but the exact start
    date for the program is still unknown.
   Victorian residential grid connect system owners will be credited 60
    cents for every unused kilowatt hour of power fed back into the state
    electricity grid.
   However, this will only be as a credit on their bill, rather than as a
    cash payment.
   If the system owner generates credit from the feed-in tariff exceeding
    the cost of their electricity consumption during the billing period, the
    additional credit is rolled over to the next billing period up to a
    maximum of 12 months from the generation date.
    Any accumulated credit will voided if the system owner changes
    electricity retailers or at the end of the scheme.
SOUTH AUSTRALIA NET FEED IN TARIFF

 From July 1 2008, qualifying South Australian
  residents will receive $0.44 per kilowatt-hour.
  Not all electricity companies may choose to
  offer contracts and those that do may add to
  this incentive.
 Customers of TruEnergy offering 20 cents top-
  up-to their customers
ACT GROSS FEED IN TARIFF
 In July 2008, legislation was passed in the
  ACT's for a gross feed in tariff to be
  implemented, which will pay 50.05c/kWh for
  systems up to 10kw capacity and 40.04c/kWh
  for up to 30kW capacity, with a system capacity
  cap at this point of 30kW.
 The program was rolled out on March 1, 2009.
 This is the most generous feed in tariff program
  in Australia
TASMANIA NET FEED IN TARIFF

   The current feed in tariff rate for Tasmania
    is $0.20 per kilowatt-hour
NORTHERN TERRITORY NET FEED IN TARIFF

 Alice Springs residents can receive a net feed
  in tariff rate of $0.45 per kilowatt hour
  produced.
 In other areas of the Northern Territory, the rate
  is 14.38c.
WESTERN AUSTRALIA GROSS FEED IN TARIFF

 The Western Australia program will pay a rate of
  $0.60 per kilowatt hour based on a gross
  model starting some time in 2009.
 It appears that in order to qualify, participating
  households will also take on 100% green power
  mains supply.
 Scheme is still under development
QUEENSLAND NET FEED IN TARIFF

   The Queensland Government Solar Bonus
    Scheme commenced on 1 July 2008. Grid
    connect solar owners participating in the
    scheme will be paid $0.44 per kilowatt hour
    (kWh) for surplus electricity fed into the grid,
    plus local electricity companies may choose to
    over additional payments above that.
NEW SOUTH WALES FEED IN TARIFF

 The New South Wales government recently
  announced the introduction of a feed in tariff in
  2009.
 The amount or type of tariff NSW will roll out is
  yet to be determined by a task force
F.I.T. - SNAP SHOT VIEW
LATEST SOLAR PROJECTS/NEWS

ACT – EOI for Large Scale Solar Power Facility
 May 15, 2009

 min30MW to power 10,000 homes

 ACT commitment of $30mil
NEWS – CON’T

Bonus Tax Concession
 The Government has announced that it will
  increase the rate of the one-off bonus tax
  deduction available to small businesses under
  the Small Business and General Business Tax
  Break to 50% where a small business acquires
  an eligible asset between 13 Dec 2008 and 31
  Dec 2009, and the asset is installed or ready
  for use by 31 Dec 2010.
NEWS – CON’T

Worley Parson
 Consortium of major companies to develop
  solar parabolic trough Advanced Solar-Thermal
  (AST) Project
 250 MW peak electrical output

 Molten salt storage module (1000 MWHT)

 The first 250MW AST facility would be the
  biggest solar-thermal plant in the world
SOLAR CREDITS

 Currently, Fed Govt. provides grant of up to $8k
  for small generation systems (means tested)
 From July 1, 2009, grant is replaced by revised
  REC (not means tested) creating Solar Credits.
 Solar Credits will assist with the upfront cost of
  installing roof top PV and other small scale
  renewable energy systems
SOLAR CREDITS
   Additional credits will be based on the multiple as set
    below
    Year      2009-10   2010-11   2011-12   2012-13   2013-14   2014-15   From
                                                                          2015-16
                                                                          onwards
    Multiplier 5        5         5         4         3         2         1



   Solar credits will apply to the first 1.5kW of capacity
    installed
   Generation from capacity above 1.5kW will still be
    eligible for the standard 1:1 rate of REC’s creation
SOLAR CREDITS

Example
 Under existing MRET scheme, a 1.5kW PV
  system is eligible for 31 REC’s valued around
  $1,500. Under Solar credits, the household
  would receive 5 times that amount (155
  REC’s), or around $7,500, depending on the
  market value of the REC’s.

				
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posted:11/16/2010
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