While many Tasmanians shouldn’t experience as much electricity bill hip-pocket pain in the new financial year, those with solar panels will be receiving less for the electricity they export to the grid.
With just a couple of weeks to go before the end of the financial year, Tasmania’s Economic Regulator has set standing offer electricity prices and minimum solar feed-in tariff rates from July 1.
In terms of electricity supply and after a couple of years of significant price hikes, the Regulator has given the nod to an average increase of 0.50 per cent in regulated electricity tariffs for Tasmanian households and small businesses. But this increase will be more than offset by a state government $250 electricity bill relief rebate in 2024-25 for all households ($300 for small businesses). Added to this is the federal government’s rebate of $300 for households and $350 for small businesses.
“In fact, as a result of combined state and federal energy bill relief measures, the average Tasmanian concession-holder can expect to see more than $1,000 shaved off their power bill this coming financial year,” said Tasmania’s Treasurer Michael Ferguson.
There’s nothing Tasmanians need to do to get these rebates – the payments will be credited to their electricity accounts.
So, that’s the good news. Now the not-so-good news.
TAS Solar Feed-In Tariff Reduction
Currently, the minimum feed-in tariff rate in Tasmania is 10.869 cents per kWh, which is the highest it has been for years. From 1 July 2024, the minimum feed-in tariff rate will drop to 8.935 cents per kWh – 17.8 per cent lower, but around the same as 2022/23. The Economic Regulator says the lower rate is due to a decrease in wholesale electricity prices forecast for 2024-25.
Here’s how Tassie’s solar feed-in tariff rates have tracked since 2016/17.
| Period | c/kWh |
|---|---|
| 2024/25 | 8.935 |
| 2023/24 | 10.869 |
| 2022/23 | 8.883 |
| 2021/22 | 6.501 |
| 2020/21 | 8.471 |
| 2019/20 | 9.347 |
| 2018/19 | 8.541 |
| 2017/18 | 8.929 |
| 2016/17 | 6.671 |
It used to be that Aurora Energy was the only electricity retailer in Tasmania, but now there’s six. It’s important to note that the 8.935c rate in the new financial year is the *minimum* electricity retailers can pay. They can offer more, although I noticed when comparing electricity retailers in Tasmania yesterday that all are offering the minimum at the moment – but other aspects of their plans vary.
As in other states, the real value from having a solar power system is avoiding expensive mains grid electricity, not in feed-in tariffs. Solar energy self-consumption is the name of the game and electricity bill rebates will take the sting out of the reduction.
Based on results from SQ’s solar calculator, a 10kW solar system installed in Hobart on a 9c feed-in tariff should achieve simple payback in approximately 7.5 years. And that assumes a 1c per kWh annual decline in feed-in tariff until a floor of 6c per kWh is reached. Whether that will happen is anyone’s guess, and your own payback will vary depending on how much you pay for a system and your household’s energy consumption profile.
While solar power systems can be pricier in Tasmania, a huge positive is system quality. Generally speaking, it’s probably the best in Australia thanks to all systems being inspected through a robust program run by the state’s Department of Justice. Solar cowboys aren’t welcome in the Apple Isle and those that set up shop usually don’t last too long.
About Michael Bloch
RSS - Posts
When pitching a solar system to a client, it’s important to clearly explain the type of system and how it works. Don’t just talk about the number of kW in the array. Outline all the different types of systems so the client can weigh the pros and cons and choose the best one for their needs. There are several types of solar systems, and not all systems with batteries have battery backup. Sometimes, the battery is only used to feed the grid, not to power the house. Make these distinctions clear.
For example, I know someone who did his homework and got quoted for a grid-tied stand-alone system. When it came time for installation, the installers tried to put in a different system. He almost had to take them to court. The installers said the council didn’t like systems that could run completely off-grid in suburban areas. However, the energy ombudsman pointed out that his system was legally recognized. The fact that it could isolate from the grid didn’t matter, as it was still grid-tied. Since they quoted that system, they had to install it, regardless of the council’s preference.
He eventually got the system he wanted. It produces more power than he uses during the day, isolates his house from the grid at night, and runs off the battery until dawn. Half of his 5kW array feeds into the grid while the other half charges his wall battery in the morning before feeding the grid, effectively wiping out his power bills. Choosing the right system makes all the difference.
[note: this comment was edited for clarity]