NSW to allow PV system expansion and retention of feed-in tariff

I learned today that the NSW Department of Trade and Investment recently updated its web site and the rules around PV upgrades in NSW.

Previously, upgrading your capacity simply meant you would lose your Gross Feed-in Tariff (FiT) (either 60c or 20c), so of course few if any bothered.

In a nutshell, what appears to be the case now is that additional capacity may be added, as long as it is separately Net metered (see excerpt from the DTI web site below).

This is big news for the NSW industry which has been making a very slow comeback after the sudden cessation of the 60c tariff , although we hasten to add that we don't expect it to set the market on fire. However, we do expect it to stimulate new and unexpected demand.

Using my own case as an example, I quickly ran the numbers and here's what I get:

I use on average 17kWh/day and have a 1.2kW PV system on the 60c G FIT

In the one bill I analysed we earned $204 from our 60c GFIT and spent $346 on demand, on a Time Of Use Tariff, so our net bill was $142

If I assume I can wipe out my shoulder demand and (say) 10% of my peak demand with an upgrade, I need to generate an average of 10.2kWh/day from my upgrade or about 2.6kW of new capacity.

This would save me an additional $160 per quarter which, assuming all things are equal would put me $18 in credit (overall).

A 2.6kW system would cost me about $5,000 according to the Solar Choice price index, which equates to a rough payback of 7 years

Good deal? Well, given my net electricity costs would be effectively zero and that in some quarters my generation goes up and I'm always working on reducing my consumption, I'd say definitely.

As a 60c customer who only invested a couple of years ago, would I re-invest? That's the million dollar question that industry will have to find out.

We are continuing to dig and try to understand more about the details and will update as more information comes to hand.

EXCERPT FROM DTI WEBSITE

“I wish to add to the generating capacity of my solar PV system, what are my options?

I am a 60 cent Solar Bonus Scheme customer. I wish to expand the generating capacity of my solar system. What are my options? 

NSW Solar Bonus Scheme customers receiving the 60 cents per kilowatt hour tariff who increase their Scheme generator's capacity will move to the 20 cents per kilowatt hour tariff unless the components (for the expansion) were purchased on or before 27 October 2010. 

The customer will remain eligible for the 20 cent tariff provided the system does not exceed 10 kilowatts (kW) of generation capacity. 

Alternatively, Solar Bonus Scheme customers who receive the 60 cents per kilowatt hour tariff may expand their overall generating capacity and retain the 60 cents tariff for their Scheme generator if the additional capacity is from a separately metered non-Scheme generator.

No Scheme payments are available for the non-Scheme generator. Customers should check what feed-in tariffs are available and confirm with their preferred retailer whether they will pay a non-Scheme tariff in addition to the Scheme tariff.

Customers are obliged to notify their distribution network service provider (DNSP) of any change to their generator that would affect their receipt of Scheme payments. Fines and penalties of up to $110,000 may apply for failure to notify. 

The connection must be made in accordance with directions provided by the DNSP. The Scheme generator will need to be gross metered and the non-Scheme generator will need to be net metered. 

Customers should consider how the expansion of their solar PV system will affect Scheme tariff payments and other benefits before deciding to expand the generating capacity of their solar PV system. 

The DNSPs are currently processing these connection requests manually while updating their systems. Therefore customers may experience a delay in receiving an approval.”

Nigel Morris is the Director of Solar Business Services.

This article was originally published by SolarBusinessServices. Republished with permission.