In NSW more than 10% of households and small business premises have installed a solar photovoltaic (PV) system, or solar panels. When these solar customers use electricity generated by their solar panels rather than buying it from their retailer, they can make significant savings on electricity bills. When they don’t use all the electricity they generate themselves, the excess amounts are exported to the grid, and they may be paid a ‘solar feedin tariff’ for these solar exports.
Retailers aren’t obliged to offer solar customers a solar feed-in tariff for their solar exports. Rather, they can choose to do so in their market offers to solar customers. And if they do, they set this tariff themselves. Currently, most retailers do offer solar customers a solar feed-in tariff of between 6 cents and 20 cents per kilowatt hour (c/kWh).
To help retailers in setting their solar feed-in tariffs and solar customers in deciding whether these tariffs are reasonable, the Independent Pricing and Regulatory Tribunal of NSW (IPART) has set a ‘benchmark range’ for solar feed-in tariffs for each year since 2012. Our benchmarks provide guidance on the financial value of electricity exported by solar customers in NSW in the coming financial year.
The NSW Government has asked IPART to continue setting benchmarks for solar feed-in tariffs annually for the next three financial years, from 2018-19 to 2020-21 (our Terms of Reference are provided in Appendix A).2 We have also been asked to set time-dependent benchmark ranges for solar feed-in tariffs.
This report outlines our draft decisions on benchmarks for solar feed-in tariffs for 2018-19, and explains why and how we reached these decisions, including our responses to stakeholder comments on our Issues Paper. We invite all interested parties to comment on this Draft Report (see Section 1.7 for more information).