Solar Power Feed in Tariffs

What is a feed-in-tariff?

To assist in the uptake of Solar Systems the NSW Government announced on 23rd June 2009 that it will commence a feed in tariff from January 1st 2010 (for more information…). All other states have already announced or commenced similar systems.

A feed-in tariff provides payments for electricity produced by small scale distributed sources like solar photovoltaic (PV) systems when their output is fed back into the electricity grid. The NSW Solar Bonus Scheme, when it was introduced, was the most generous of any of the State schemes currently on offer.

Through this scheme the Government has successfully reached its first milestone of 50 megawatts (MW) installed capacity. Including additional capacity installed since that milestone was reached, NSW has the largest amount of installed small scale photovoltaic (PV) systems of any jurisdiction.

Following a statutory review of the Scheme, the NSW Government announced changes to the design of the Solar Bonus Scheme. Notably for new customers joining the Scheme the tariff rate has been reduced to 20 cents from 60 cents. Customers who have connected systems by 27 October 2010 will not be affected by the tariff change.

The Scheme will also be capped at 300 megawatts (MW) of connected capacity. This change reflects the substantial fall in PV system purchase costs over the past twelve months and also takes account of the generous support provided through the Commonwealth’s Renewable Energy Target scheme. Applications to connect have passed 300MW.

29 April 2011: UPDATE… Applications to the NSW Solar Bonus Scheme have been placed on hold. No new applications to the Scheme will be considered from midnight 28 April 2011.

For more information see the NSW Governments frequently asked questions.

 

How does a Feed-in-Tariff help me?

The exact amount of electricity exported to the grid from a Solar Power System will vary with the specifics of the particular system installation (orientation, size of system, over shadowing, etc). However, the NSW Government estimates that it is likely that a 1.5 kilowatt (kW) solar photovoltaic (PV) system will, on average, receive on average $1,500 per year from the feed-in tarrif.
Example:

Consider a family in NSW with a correctly designed, well located 1.5kW Grid Connected Solar PV Power System:

• A well designed solar system installed in Sydney typically will receive 4.3 Sunlight hours per day. Therefore, the owners our 1.5kW solar system could expect to generate on average:

(Available Sunlight Hours per Day) x (System Capacity) = 4.3hours x 1.5kW = 6.45kWh / day

• This means that on average our Families 1.5kW Solar System will generate each year around:

(Average Daily Generating Capacity) x (365 days) = 6.45kWh x 365 = 2,354kWh / year

• This means our Family would then receive an annual feed in tariff payment from their Energy Provider, under the proposed NSW Government Scheme of:

(Annual Generating Capacity) x (Feed in Tariff)

= 2,354kWh / year x 40c/kWh = $942 per year

 

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