Posted by: Scott Thompson
From 1st July 2012 the Federal Government's Renewable Energy Subsidy significantly reduces for those considering installing photovoltaic systems and inverters (PVS). This has led to a frenzy of activity in the solar industry as comsumers and installers rush to beat this deadline. The online media and commercial TV ads have multiplied and frequent advertising material is being left in letterboxes all over Queensland.
Some solar supply companies are heavily promoting the 44 cents a kilowatt Feed in Tariff (FIT) and use that rate to demonstrate attractive return on investment (ROI) calculations. The FIT is an incentive and solar bonus to encourage the installation of PVS. What many suppliers are failing to advise their clients is that there is no guarantee the FIT will remain, especially with the newly elected LNP looking to reduce expenditure whereever it can.
Currently, any excess power generated by an installed PVS, is fed back into the grid and the owner of the PVS is paid as per the FIT. This means the owner receives more than double the price per kilowatt for any surplus electricity fed back into the grid, when compared to what they pay for the power consumed.
To enable this to occur the owner of the property enters into a Network Connection Agreement with Energex which is an agreement whereby Energex permits the customer to generate electricity and to feed it back into the grid. The State Government Electricity Act provides that when this occurs the customer is entitled to 44 cents a kilowatt for any excess power fed into the grid. However, this rate can be altered by regulation or indeed by a further review at certain trigger points as outlined in the legislation. It can of course, as any legislation can be, subject to review by the Government at any time and if the FIT component is not appropriate for whatever reason it can be revoked.
For example, the removal of the FIT could possibly occur on the 1st July 2012. This is the date the Federal Carbon Tax comes into effect. By removing the (State Government) FIT as a solar bonus and incentive and replacing it with the flow on effect of the (Federal Government) Carbon Tax which, by default, could also act as an incentive to encourage home owners to install PVS on their property. Therefore, by default, or by design, a PVS incentive would continue to exist at no cost to the LNP State Government.
This is purely speculation on our behalf, but helps illustrate the many variables in this industry. The issue for consumers is to ensure they are fully informed of these possibilities before they purchase and install a PVS on their properties.
If you have any concerns, or wish to obtain advice in these areas, please do not hesitate to contact Scott Thompson on 07 3234 3100 or email.
