Australia: Location-specific feed in tariffs launched

03. April 2012 | Markets & Trends, Global PV markets | By:  Jonathan Gifford

In remote parts of the vast state of Western Australia, photovoltaics are about to get more attractive for businesses and households. An electricity retailer in the state has launched an energy buyback scheme for photovoltaics where residents in remote areas will receive more for the photovoltaic electricity they feed back into the grid.

An Australian sunset.

The new system of payments for electricity fed into the grid will create an even greater incentive for households and business in remote areas to switch to solar. Photo: Flickr/thinboyfatter.

Covering over two-and-a-half million square kilometers, the state of Western Australia is huge. As such, to provide electricity to some regional towns is extremely expensive. Reflecting this, the state’s electricity retailer Horizon Power will introduce a system that will make photovoltaic installations even more attractive. Previously Horizon operated a "1-for-1 Solar Buyback" scheme in most areas.

Coming into effect in July 2012, the prices received for photovoltaic electricity fed back into the grid will reflect the costs the utility incurs providing power often to remote locations and across great distances. For example, photovoltaic installations in remote towns like Kulumburu or Wiluna will receive AUD0.50 cents per-kilowatt-hour (c/kWh) (US$0.52), while those close to industrial hubs like Port Hedland will receive only AUD0.10 c/kWh (US$0.11). Interesting examples are the towns of Kununurra, Wyndham and Lake Argyle which, despite their remote locations, are located close to hydro-power sources and therefore will receive only AUD0.16 c/kWh (US$0.17).

Welcoming the measures, Australian solar installation quote comparison and brokerage service Solar Choice wrote on its website: "Horizon, in implementing the town-specific, differentiated, flat-rate tariffs, has done what no other electricity retailer has done to date: Attempt to incentivize the uptake of ‘distributed generation’ (i.e. small-scale wind, solar, and other renewables) on a localized basis to harness the potential benefits."

Rising prices

Electricity prices have risen dramatically in Western Australia over recent years as a shortfall of investment into grid infrastructure has been made up. The rapidly growing state has been adding to its population by from interstate and overseas and not enough money has been invested back into the aging electricity grid.

Electrical-poll-top fires are not uncommon during hot summer months in the state and under certain conditions and subsequent power outages frustrating for residents and businesses. To address this problem and others, the State Government has been overseeing a period of rapid electricity rate increases and the Australian Energy Market Commission (AEMC) expects a rise of 30 percent by 2013. 80 percent of this increase, the AEMC reports, is due to an increase in distribution costs being born by utilities and retailers.

In the face of these price rises, the falling cost of photovoltaics and healthy rates being paid to households in remote areas through the new scheme, solar arrays in many areas will become very attractive. Needless to say, there is no shortage of sunshine throughout the state.

The May edition of pv magazine will feature a special report into photovoltaics in Western Australia.

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