Antinuclear

The likely introduction of a gross feed in tariff was first revealed by RenewEconomy in July, in our piece on “How big utilities propose to kill solar PV.” It was among a number of measures canvassed by retailers and network operators to protect their revenue sources, which is threatened by the proliferation of solar PV. Many of the other proposed measures, such as network restrictions, the introduction of standing charges, and proposed changes to the renewable energy target, have also provide right…..

The solar industry says the introduction of gross tariffs – possibly at the rate of 8-12c/kWh – would be devastating for the industry, and represented a greater threat than even the dilution of the renewable energy target…….

They argue it effectively reduces competition in the industry, and potentially removes one of the key solutions to the overloading of grids. Numerous independent studies have underlined the important role that solar PV could help in meeting peak demand, but this is rarely acknowledged by the utilities, who are more concerned about protecting revenues by growing their assets. The move comes just months after the Queensland Government slashed its net feed in tariff. Queensland had been the fastest growing state for solar PV, accounting for 40 per cent of national installations by some count.

The introduction of gross tariffs would also likely kill off the emerging commercial-scale solar PV market in Australia. Commercial scale solar is considered one of the most effective options for reducing peak demand because the output from the rooftop or ground mounted panels corresponds with usage by commercial users.

However, Australian solar companies have also expressed fears that the suspension of grants under the Federal government’s $800 million Clean Technology Investment Program for manufacturing groups could threaten many projects, just as the industry was getting started.

The head of one NSW company, who requested anonymity, said he had 15 proposals on the drawing board, ranging in size from 30kW systems to up to 1MW for customers including manufacturers, processors, retailers, and vineyards.

He said if the funding was withdrawn, only a couple of smaller projects were likely to go ahead. That’s because larger commercial customers had the buying power to negotiate lower electricity prices – of around 16c-18c/kWh (instead of 30ckW/h or more) from the utilities which were effectively cross subsidized by other users. RenewEconomy highlighted the other issues surrounding commercial solar in this piece earlier this week, Why new solar tariffs coud drive a man to diesel”….

 

The situation in Australis is not unique. In the US, for instance, the solar industry  is facing similar issues, as highlighted in this piece on Greentech Media this week – where they flagged a potential installation of 75GW of solar PV in the country by the end of the decade – 15 times its current capacity – and massive resistance from utilities.

In Australia, the utilities have become concerned because of recent forecasts that suggest up to 18GW of solar PV could be installed in the country over the next few decades. Some private forecasts suggest that could happen within a decade.

As David Crane, the head of leading US energy generator NRG, said earlier this year, solar PV represents the biggest threat to the conventional energy industry in half a century. In the Greentech Media piece, the solar companies said utilities in the US were so powerful they acted as “a fourth arm of government” and won’t give up easily. Professor Ross Garnaut has commented on the extent of regulatory capture in the Australian industry, hence the ability to “gold plate” networks and extract huge compensation packages for the carbon price. http://reneweconomy.com.au/2012/war-against-solar-pricing-regulator-favours-gross-tariffs-23984