Some solar relief for regional households as rooftop tariff gets 41 pct boost

Regional Queensland households and small businesses with rooftop solar have been given a slight, daytime reprieve from soaring power prices in the state, after the feed-in tariff for customers on the Ergon and Essential energy networks was boosted by 41 per cent.

The Queensland Competition Authority on Tuesday published its determination for feed-in tariff for small-scale solar PV owners in regional Queensland for 2022–23, setting the rate at 9.3c/kWh, up from 6.5c/kWh in 2021-22.

The Queensland government says the change in the tariff is expected to save about 150,000 customers in the regions up to $200 a year on their soon to be inflated power costs.

The QCA said in a report that it had made its determination for the new financial year using the same methodology that had been in place since 2014. It said the big jump in the tariff rate was largely due to the projected increase in wholesale energy costs.

“The key drivers of this increase are higher wholesale energy costs – reflecting an increase in ASX contract prices, primarily due to a tighter supply-demand balance in Queensland, contributed to by the slowdown of renewable generation coming online and reduced availability of thermal generators,” the report says.

“Other contributing factors include higher coal and gas prices as well as market uncertainty associated with the ability to cover price spikes in the NEM under a 5-minute settlement framework,” it adds, while also factoring in higher ancillary services fees.

This is putting it mildly. As RenewEconomy has reported, Queensland is among the hardest hit by Australia’s “broken” electricity market, with wholesale power prices averaging at a record $350/MWh in the state in the month of May.

“The reason is simple,” writes Giles Parkinson here: “Queensland is more dependent on coal power than any other state, and its grid is being hit by the surging cost of coal and unreliable generators. And the market sees little relief in the future because of its dependence on fossil fuels.”

For consumers in regional Queensland this means power prices are projected to jump by 9.2% next financial year – a situation a Queensland Conservation Council report this week claims could have been avoided, and even reversed, if the state’s wind energy pipeline had been developed more quickly.

Happily, small-scale solar is quick to install and, for households in Queensland and the other National Electricity Market states, it will be one of the few ways consumers can insulate themselves from the current chaos.

And higher solar feed-in tariffs, which are likely to be on the cards for other states and regions too, will also ease the pain come bill paying time.

In regional Queensland, the solar FiT has not been set this high since 2018-19, when it was 9.4c/kWhr. Ironically, back then was when the QCA started to reduce the solar export rate, due to the falling price of wholesale energy that was being driven by renewables.

“This reduction is driven mainly by the projected decrease in price volatility in Queensland and other NEM regions due to the expected entry of approximately 5,200 megawatts (MW) of solar and wind generation, of which 1,350 MW is expected to be in Queensland,” the QCA said when it made its 2019-20 determination on the regional FiT.

In a statement marking the regional “solar boost,” state energy minister Mick De Brenni sheets at least some of the blame for Queensland’s less-than-speedy shift to renewables to the newly ousted federal Coalition government.

De Brenni says the Queensland government is investing more than $2 billion to supercharge renewable energy supply and significant battery storage to produce cheaper, cleaner energy but has “gone it alone” for years.

“We are getting on with the job but the hangover of nine years of the failed Abbott-Turnbull-Morrison government and their flatlining on renewables investment is impacting on cost of living for Queenslanders,” he said.

“Queensland Competition Authority has pointed to the impact of the invasion of Ukraine on gas prices in its determination.

“We’re working hard to keep downward pressure on prices because every dollar counts right now for Queensland households.”

De Brenni says Queenslanders will also receive a $175 Cost of Living Rebate on their next power bill.