Turmoil in Australia: Queensland Government Announces Drastic Cuts to Solar Bonus Feed-in Tariff Scheme

June 26th, 2012 by James Martin II

The Queensland state government has announced that its Solar Bonus Feed-in Tariff scheme will be reduced to 8c per kilowatt-hour for those who submit applications after midnight 9 July 2012. The scheme currently offers solar system owners 44c for every kilowatt-hour of solar electricity that they feed into the power grid, making it the most generous in Australia.

The news is a major blow to Queensland’s — not to mention Australia’s — solar industry, which has been subject to sudden stop-start government support across most of its states and from the federal government as well. The most notorious case was the abrupt slashing of New South Wales’ Solar Bonus Scheme — customers were left with 12 hours to submit applications to connect for the generous 60c/kWh gross tariff scheme that was in place at the time.

The Queensland Solar Bonus Feed-in Tariff Scheme is the ‘last domino‘ to fall since the election of Queensland’s conservative Liberal Party candidate Campbell Newman as Premier and his subsequent gutting of numerous state clean energy initiatives. (The Solar Bonus Scheme is also the last domino in a different way, being the last truly generous Solar Feed-in Tariff scheme standing in the country.) The state’s Solar Bonus Scheme was supposed to be left untouched, but the Premier seems to have changed his mind with the announcement.

The Queensland government had the following to say about the impending cut in a press release:

Customers who wish to access the 44 cent rate will need to lodge a network connection application before midnight on 9 July 2012 in order to be considered for the existing 44 cent tariff. This provides a notice period of 10 business days for people who have already purchased their PV system on the basis of the 44 cent tariff, but have not yet applied for the Scheme.

Importantly, existing Scheme customers will continue to receive the 44 cents tariff provided they maintain their eligibility for the Scheme.

Eligible customers that apply to join the Scheme from 10 July 2012 will receive 8 cents per kilowatt hour for energy exported to the electricity grid. The 8 cents tariff will be reviewed by 1 July 2013, and end on 1 July 2014.

The Queensland Government will also task the Queensland Competition Authority (QCA) to review and make recommendations by early 2013 on a subsidy free “fair and reasonable” solar feed-in tariff for Queensland. This is similar to approaches taken in New South Wales, Victoria and South Australia. QCA recommendations will inform Government’s mid 2013 review of the Scheme.

For further information please visit the Department of Energy and Water Supply website or call the Queensland Government Customer Service Centre
on 13 43 87.

For more information: Queensland State Government — Solar Bonus Scheme

Image Credit: Australia solar stamp via Brendan Howard / Shutterstock.com

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Tags: Australia, australia feed-in tariff, australia feed-in tariff cut, australia solar energy, australia solar feed-in tariff, queensland, queensland feed-in tariff, queensland solar, queensland solar feed-in tariff, solar bonus scheme

About the Author

James Martin II James Martin II has a BA in Philosophy from Bridgewater State College, and a Master's degree in Environmental Management from the University of New South Wales. He has lived in the US, Japan, and Australia. Currently, he lives in NYC doing research and writing about cleantech (mainly solar PV) for a few different websites, including Australian solar brokers Solar Choice.

http://www.facebook.com/boydist Chris Boyd

It’s all pretty obvious really, someone powerful in the coal or gas industry has had a word in his ear and told him to what to do with the feed in tariff.

If Germany can maintain a healthy feed in tariff, then so can Australia, unless we think we have a special kind of bureaucracy that prevents it.
- Bob_Wallace
  
  It seems to me that renewables in Germany are under significant attack by the coal industry ever since it was seen that the solar installed so far is bringing down the cost of electricity in the country and hurting coal’s profits.
  
  I suspect the coal industry has long recognized that it would not take a lot of solar to make a big change to the cost of peak hour power and if they let that happen then they would have trouble staying profitable.
  
  Zach’s got a couple of good articles showing how a relatively small amount of German solar is making their midday electricity cheap.
  - http://cleantechnica.com/ Zachary Shahan
    
    it also simply has a conservative head of govt right now. not as bad as the GOP here, but not all that RE-friendly either.
Fiona Woo

The government’s media statement cites rising costs as the reason for this cut and McArdle claims the previous FiT rate would impose a cost of $54 per household by 2014/2015. However, the Australian Energy Market Operator estimated last year that the FiT added only $0.00013 per kWh to consumers’ electricity bills. That’s $1 for the average 7 mWh household.

It’s hard for Premier Newman to justify the likely negative effects on the solar industry – and thus the economy! – on such shaky evidence. As the World Future Council argues (and blogs about here: http://power-to-the-people.net/2012/07/sudden-fit-cut-in-queensland/), feed-in tariffs require a stable and predictable policy environment for small-scale businesses and producers to invest in. Implementing this drastic cut and giving a mere 10 business days’ notice for potential applicants, instead of a flexible but steady degression rate, will hurt the sector.
Ross

I see Campbell Newman has an engineering degree. He really should be following the science and acting accordingly.
http://ronaldbrak.blogspot.com.au/ Ronald Brak

Actually, since in a couple of days Queenslanders will pay about 6 cents per kilowatt-hour for electricity to be generated and about 20 cents a kilowatt-hour to have that electricity delivered to them, an 8 cent feed in tariff for point of use solar seems really inadequate considering how little distribution infrastructure it requires. After all, we’re still a long way from suburbs supplying more electricity than they consume at any point.
http://ronaldbrak.blogspot.com.au/ Ronald Brak

Eight cents a kilowatt-hour is roughly what coal power plants will get for supplying electricity in the day. I don’t think paying solar roughly the same rate as coal is fair given the amount of emitted CO2 solar avoids and the fact that point of use solar only uses the local grid and not long distance transmission or local substations and so has the potential to let the grid do without expensive transmission upgrades.
- http://cleantechnica.com/ Zachary Shahan
  
  agreed. which is why the holy grail of ‘grid parity’ sort of pisses me off.