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O.T Carbon Tax v's PV ecomonic? but for who 17-Aug-2011 At 12:53:50 PM evanbb

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On 17/08/2011 rodw wrote:
>So if its a govt subsidy how does that then affect the Utilities bottom
>line?
The Feed-In-Tarriff probably doesn't affect any utilities bottom line; Government pays producers directly for providing solar power, effectively becoming generators, and because of network rules other generation needs to back off to allow the renewables on.

>In addition, they then on sell the green power at a higher rate, last
>I checked around 28c Kilowatt?, so they recoup that back...they also don't
>pay yearly upkeep on each system...and after 7years when all the contracts
>expire they will buy the power back at a lower rate that they sell for
>the rest of the life of the system, which is around 25 years. There will
>be no govt mandated buy back limit so I'm guessing that while electricity
>cost rise they will keep the feed in tariff the same...yeah they have to
>pay money upfront but they will get it all back then some.

Government doesn't really on sell it; the PV electricity enters the grid and reduces generation from other suppliers. The pricing in the grid is heaps more complex than that too, so it is hard to say how much the electricity is worth. But, to the best of my knowledge, the Government makes nothing from the solar scheme, it is only a cost.

>My point is they keep claiming its the solar tariffs that is causing rises
>but is more caused by an aging system which they have constantly underfunded
>in updating over the years and it biting em on the arse with the feed in
>tariffs being the great scapegoat to hide there incompetence.

There was a report released by AEMO (Australian Energy Market Operator) late last year on the contributing factors to the rise in electricity prices. The Feed-In-Tariff doesn't count because the system never sees it; it is a straight transaction between Government and residents. However, the Mandatory Renewable Energy Scheme which makes retailers buy a certain amount of renewable electricity each year is driving up prices; around 16% from memory. But you are right, the lions share is coming from network upgrade costs, over 50% I think. That's not entirely because it is old, a large part of the problem is the increase in summer and winter peaks as residential usage increases. Higher peaks mean the network must be designed for a higher spike, even if it only achieves that for 4 hours a year. Air conditioners and heaters are the main reason the network needs upgrading.