Current State of play – APRIL 2014

The current Government support for building scale renewable energy systems is as follows:

The current Feed-in Tariff is set at 8c/kWh for systems less than 100kW in size in Victoria[1]. Other States and Territories have similar Feed-in Tariffs.

  • The Feed-in Tariff is set to expand to include Low Emission Technologies[2] – submissions from technology manufacturers currently pending

The federally legislated Renewable Energy Target (RET) which issues Small-scale Technology Certificates (STC’s) based on the expected annual energy generation of the installed system. The certificates are then purchased by energy retailers providing an offset to the initial capital cost of renewable energy system. The cost of certificates fluctuates based on the STC market rate as set in the Clearing House (administered by the Clean Energy Regulator).

  • The federal government is currently reviewing the RET scheme with a view to investigate the impact of renewable energy on electricity prices[3]

A carbon price of $24.15 per tonne of CO2-eq currently applies to all electricity generated from fossil fuel sources. The pricing effectively makes fossil fuel derived energy more expensive than renewably sourced energy.

  • The federal government has introduced legislation to repeal the carbon price. It is uncertain whether this will continue under the Liberal Party.

The cost of solar photovoltaic (PV) technology in particular has fallen considerably over the last 2-3 years[4] due to the influx of Chinese panel manufacturers, increased market competition and greater economies of scale. This has meant that, even without government support, PV systems that are properly sized can be installed with commercially viable payback periods.

  • Solar PV systems are the most commercially viable renewable technology currently available. Technologies such as wind, biomass and hydro tend to require larger systems to be commercially viable than can be accommodated at the building scale.

The vast majority of renewable energy systems designed for buildings are eligible for STC’s and Feed-in Tariff. However, as the Feed-in Tariff is comparatively lower than the 20-30c/kWh consumption tariff for homes and small businesses, it is preferable to use all the energy generated on-site rather than exporting to the grid.

  • It is of utmost importance that renewable energy systems are sized correctly for reasons outlined above, such that energy exported back to the grid is minimised whilst still generating a large proportion of the development’s total electrical demand. With this is mind, energy bills can be significantly lowered and payback periods minimised.

Author: Niraj Patel, GIW Environmental Solutions Pty Ltd.

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