Australia: Proposed "gross FITs" slammed

While Australia has seen extremely rapid growth in photovoltaics in the past two years, the cancelling of FIT schemes and wavering government support threatens the industry’s continued growth. In a controversial move, regulators in Queensland are considering introducing "gross FITs," which would see households and businesses with photovoltaic arrays forced to sell the electricity produced to utilities at the wholesale price, while purchasing it back at the full retail rate.

The proposal is currently one option being considered by the Queensland Competition Authority (QCA), at the behest of the government. The QCA is currently conducting a review with the aim to develop a “fair and reasonable” solar FIT for the state.

Green groups have come out swinging in response to the proposal under consideration, with the Clean Energy Council saying that gross FITs would be anything but fair and reasonable, for households and businesses.

"What the Queensland Competition Authority has proposed is the equivalent of telling people they can’t just use the lemons growing on the lemon tree in their backyard – they have to sell the produce to a wholesaler for next to nothing, and then buy the lemons back at a premium from the supermarket," said the Clean Energy Council’s Russell Marsh, in a statement today.

The Clean Energy Council elaborates that under gross FITs, households and businesses could be forced to sell power at AUD0.08/kWh, while buying it back at a rate somewhere between AUD$0.17 – AUD$0.35/kWh.

"Not only is this proposal unfair, it would also discourage people from trying to do the right thing and be more energy efficient at home," Marsh said.

In response to the controversy caused by the proposed gross FITs, the QCA has clarified that such tariffs are only one of a number of changes being considered after a period of public consultation.

The QCA’s draft report is due on November 30, 2012.

Recent figures, from the Australian Clean Energy Regulator, demonstrate that more than 750,000 Australian homes now feature a photovoltaic array. Cumulative capacity is expected to exceed 2.3 GW by the end of 2012. At present, Queensland has the most installed capacity with 474 MW, followed by New South Wales with 436 MW.

In separate hearings in the state of New South Wales last year, the state’s Independent Pricing and Regulatory Tribunal (IPART) made a non-binding decision that utilities should pay AUD$0.08/kWh for electricity fed back into the grid by households and businesses. "Self consumed" photovoltaic electricity does not have to be sold at the wholesale rate, delivery considerable incentive to consumers facing high and rapidly increasing electricity costs.