Government cuts 8c solar feed-in tariff in the Sunshine State
The Queensland state government is set to cut their 8c feed-in tariff for solar power generation. Energy and Water Supply Minister Mark McArdle insisted that the government were determined to bring down the costs of energy, suggesting that the solar subsidy was contributing to the increased costs of all consumers bills with or without solar panels.
Over 200,000 solar customers signed up for a 44c tariff before it was reduced, those customers will continue to enjoy the generous rate until the 2028 cut-off date.
“Left unchecked, the 8 cent feed-in tariff would cost Queensland households and businesses an extra $110 million on their power bills over the next six years,” said McArdle. Some electricity retailers currently offer up to 10c additional incentive meaning solar PV owners could see as much as 18c per kilowatt return on their system’s output to the grid.
It’s estimated that there are 1.6 million residential electricity consumers throughout Queensland. Assuming the cost of recouping the $110 million is spread evenly across consumers (although, realistically the more energy you use the higher the percentage you pay), 1.6 million consumers over six years works out to less than a dollar per month or around 1% of an average utility bill.
Rural Queensland customers will receive a retail tariff paid by Ergon energy (the only supplier in the region), while customers in the south-eastern region will have to negotiate with their electricity retailer for a feed-in tariff. The government will not regulate market tariffs but expects the move will lead to fierce competition resulting in better deals for savvy consumers prepared to shop around.
Electrical Trades Union state organiser Stuart Traill voiced serious concern about the policy change. “The statements by the minister that ‘increased competition will lead to better deals for consumers’ is laughable. It didn’t work for retail prices and it won’t work for solar tariffs.”
Mr Traill also referred to an independent report that concluded that Queensland consumers would be better off by $310 per year if the government channeled energy asset profits back into the energy sector.
Although an 8c retail tariff brings Queensland in line with other states like Victoria, it’s clear that the government wants to wash its hands of responsibility for the scheme. It both silences critics from the energy sector bemoaning lost revenue and leaves it up to the market to determine a reasonable price for supporting renewable energy customers.
