IPART's fair value on solar electricity in NSW misses the mark

While households currently installing a solar power system in New South Wales are slashing their electricity bills, incentives are less than in other states - and recommendations from IPART, if implemented, would see that continuing to occur.

According to information on solar solutions provider Energy Matters’ web site, a household installing an entry-level rooftop solar panel array in NSW can expect electricity bill savings of around $500 a year under current arrangements of net metering.

While a hefty saving, it’s not as high as it could be if solar households were paid a fair price for the surplus electricity they export to the mains grid.

The Independent Pricing and Regulatory Tribunal (IPART) yesterday released its draft report on what it considers the fair value of exported electricity  from residential PV systems in New South Wales.

IPART has recommended system owners should be paid a tariff of between 8-10c per kilowatt hour in 2011/12; more than currently, but far less than neighbouring state Queensland, where system owners receive 44c per kilowatt hour. IPART also says the NSW Government should not make payments within the range mandatory.

According to the Clean Energy Council (CEC), when deciding upon that figure, IPART “did not take into account several key factors and have seriously under-valued the benefits of solar power”. The body also stated while retailers have always been free to make more generous offers to consumers “the government should ensure that fairness is not optional.”

The CEC says an independent analysis found “the fair value of electricity from solar customers is at least 12-16 cents per kWh.”

Energy Matters CEO Jeremy Rich says even at 12 - 16c, this still likely excludes some potential sources of benefits that should be explored in greater detail as “fair value” for exported energy goes beyond the direct benefit to electricity retailers.

IPART’s report also recommended electricity retailers should be contributing 7.5 cents per kilowatt hour towards the cost of the state’s Solar Bonus Scheme.

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