Not running out of solar power? The government paid for it!
To encourage Australian families to install solar power on their roofs, a few years ago, the government launched the "Solar Power Buyback Program". According to the government's plan at that time, families installed solar energy systems could sell their surplus electricity to the grid under the recycling program plan. The Government of New South Wales issued the government acquisition rate for solar panel energy was 60 Australian cents per kilowatt hour.
But later, when the government subsidy contract expired and changed, the buyback price became lower and lower, and the lowest hourly buyback price was even less than 5 cents per kilowatt.
As wholesale electricity prices continue to rise, however, 350000 solar powered households in NSW may soon be able to pay twice the current buyback price.
Solar feed in rates nsw, or The New Government's Feed-In Tariff for solar panel energy is a policies aiming at accelerating the wide application of renewable energy. The government signed contracts with individuals or companies that use renewable energy to generate electricity. Under these contracts, for each kilowatt hour of electricity delivered to the public grid, the generators can earn some subsidies in addition to the original electricity price. But when the contract expires and the subsidy is lost, in some cases, the price of surplus electricity sold by these households to the grid may be cut by as much as 90%, and the annual electricity charge of each household may increase greatly.
A draft proposed by Independent Pricing and Regulatory Tribunal of Australia (IPART) proposed a repurchase price range higher than the current repurchase price range , 11.6-14.6 cents per kWh, which is twice as high as the benchmark price of 5.5-7.2 cents in 2016. Hugo harmstorf, chief executive of IPART, pointed out that every household selling electricity from solar panel system to the grid is like a small power station. In fact, the electricity they sell now has higher value, and the price of wholesale electricity is also rising, so we need to increase the purchase price.
Power retailers in NSW now offer repurchase prices above the lower end of the benchmark range, with AGL at 6.1 cents per kWh, Energy Australia at 6.1 cents per kWh, and Origin Energy at 6 and 10 cents per kWh. Smaller retailers such as Energy Locals have offered a 10 cents per kilowatt hour repurchase price.
The rise in buyback prices is good news for households that use solar energy and sell electricity to the grid, but it also reflects the rise in energy costs for all households and businesses in NSW.
Don Harwin, minister of NSW energy department, confirmed to the press that the rise of wholesale electricity price in NSW is inevitable. He said electricity prices in NSW more than doubled in the seven years after 2007, after Labour's disastrous solar incentive scheme. In 2014, the average annual electricity bill of new state residents reached a $2073. Since then, NSW electricity price has been remained at the current level. However, NSW wholesale electricity price has risen 57% since July 2016.
Industry experts believe that an important reason for NSW's rising electricity prices is the growing dependence on new energy source. Wind and solar power costs are relatively low compared to coal and natural gas because the federal government provides a lot of subsidies for new energy projects. But new energy power supply has intermittent shortcomings, such as in windless or rainy weather, thermal or natural gas power stations are still needed to increase power supply, thus pushing up the wholesale electricity price. Some people are worried that NSW may become the second South Australia. High costs of doing business are leading manufacturers to flee from NSW. At the same time, the recent shortage of natural gas in Australia has also helped the rise of wholesale electricity prices.