The election of conservative governments in New South Wales and Queensland has coincided with a dramatic reduction in state revenues, forcing a new kind of fiscal discipline and any opportunity to cut expenditure. Generous and unfunded FiTs fit this category, and represent a convenient political scapegoat in the campaign against the profligate waste of previous Labor Party governments.
The Queensland Competition Authority has issued a report suggesting that consideration be given to a mandatory gross FiT in Queensland of approximately 8 cents per kWh. This recommendation means that all power generated would be first sold to the grid at
8 cents per kWh, and then sold back to the system owner at between 25–40 cents per kWh.
I cannot think of a more anti-competitive action. To remove the right of an individual to generate and use their own power, and mandate that they sell this asset to a nominated retailer to be resold to them at three to four times the price, beggars belief. That is not competition; it is subsidy, and industry protection. If this becomes a widespread and accepted view, then it will be the most retrograde step in industry policy terms since the 1950s.
These events change the game significantly, and in an industry that has known nothing but change, we must adapt again to the shifting sands of government policy. Therefore, what is the likely outcome of these most recent FiT changes in Queensland and Victoria?
Firstly, the ‘buy a PV system because it will generate revenue for you’ sales pitch is dead. Any retailer who tries to sell a system based on FiT payback will face an uphill battle. What will matter now is right-sized systems for the needs and usage patterns of consumers.
There is no longer an incentive to oversize a PV system in most markets around Australia, but instead a significant incentive to install a system that accurately matches consumption during daylight hours and to shift usage patterns to reflect that. This is unless the Queensland Competition Authority has its way; in which case, there is zero incentive to buy PV at all.