‘FiT and well’ in Victoria!

Welcome news in the Australian solar PV world is the Victorian Government’s decision to double the minimum electricity feed-in tariff (FiT) for households and businesses in that state from the start of next financial year.

The decision by Victoria’s utilities regulator, the Essential Services Commission (ESC), means that from 1 July this year, residential and business consumers who feed power back into the grid from small renewable energy sources, like rooftop solar PV panels, will receive 11.3 cents per kilowatt hour.

This reverses the trend of recent years which saw the FiT fall from 6.2c/kWh in 2015 to just 5c/kWh in 2016. The ESC is responsible for setting the FiT annually (with the regulated period moving from calendar to financial years from this July).

Key to this reversal was the Victorian Parliament’s recent amendments to the state’s Electricity Industry Act which free the ESC’s hand to consider the social and health benefits of renewable energy.

This means that apart from the effects of wholesale electricity market prices and avoided distribution and transmission losses resulting from renewable energy supply, the ESC can now also consider the social costs of carbon and avoided health costs from reduced air pollution.

And while the decision only applies to small renewable energy generators (whether wind, solar, hydro or biomass) of less than 100 kW, it’s to be hoped that other jurisdictions are taking note.

The negative externalities of burning fossil fuels may not yet be factored in to the costs of coal and gas, but at least the positive externalities of renewables are being recognised to a degree.

In its determination, the ESC decided that the avoid social cost of carbon from using small renewables was 2.5c/kWh, but was unable to put a figure on avoided health costs because of a lack of reliable data.

OK, at least it’s a start!

Meanwhile, LEDified’s wholly owned subsidiary, SOLARfied Pty Ltd, is forging ahead with supplying commercial-scale solar PV units to the business community, which is keeping a wary eye on the inexorably rising costs of non-renewable energy.

Please get in touch if you’d like more information about the solutions we can offer.