New South Wales solar households could get paid a little less for the solar they export to the grid come July, despite forecasts of a further jump in grid power prices.
IPART revealed on Friday its solar feed-in tariff guide for customers in 2023-24, setting a recommended range of between 7.7c/kWh and 9.4c/kWh for electricity retailers in the state.
The 2023-24 rate follows last year’s decision to boost the benchmark solar FiT from between 4.6 and 5.5c/kWh in 2021-22 to between 6.2 and 10.4c/kW, based on soaring wholesale electricity prices across the national market.
“Wholesale prices have increased significantly over the last year, mainly due to the war in Ukraine which
has led to higher gas and coal prices, and disruptions in several large coal-fired power plants,” says IPART chair Carmel Donnelly.
But rather than lift the benchmark tariff again, IPART has this year opted to lift the lower limit of the recommended range for FiT prices, by 1.5c/kWh, while at the same time reducing the upper limit by 1c/kWh to 9.4c/kWh.
IPART says the overall benchmark tariff has not been increased because a large portion of the increase in retail prices is being driven by much higher wholesale costs in the evening and night-time when “there is very little electricity being generated from solar panels.
Meanwhile, as the chart below illustrates, wholesale costs in the middle of the day have “increased to a lesser extent,” meaning that less value is being attributed to solar exports – even though it is those very exports that are driving daytime prices down.
Overall, the message this year appears to be that while wholesale prices are still high – indeed, set to go up by another 25 per cent for some customers in July – solar households can get the biggest discount on their bills by using the solar they generate in the place of grid electricity.
“Solar customers can power their heaters, air conditioners, electric vehicle and pool pumps with their solar panels if they time it right,” Donnelly says.
IPART also notes that while some retailers tend to offer solar feed-in rates above the regulated benchmark, these often come with a set of conditions.
“Some retailers pay a lower feed-in tariff rate after export thresholds have been reached. Other deals are only available if the customer has bought their solar panels through that retailer,” Donnelly said.
“Customers should consider all aspects of a retailer’s offer including usage and fixed charges. The offer
with the highest feed-in tariff may not be the best deal overall.”