South Australia’s transitional feed-in tariff incentive for solar power closed to new applicants on 30 September 2013. Many of those who are considering going solar but have not yet made the move are probably wondering if solar panels are still worth the investment in SA. This article takes a look at how the solar state of affairs has changed in South Australia, and also examines the new case for going solar in the state in the absence of a state-based generation incentive.
The average price of a 5kW solar system in Adelaide is just around $8,600. To instantly compare solar PV system prices & sizes for your area of SA, fill out the Quote Comparison Request form to the right of this page. You can also call Solar Choice on 1300 78 72 73.
What’s likely to change in SA now that the feed-in tariff is gone?
The case for going solar in South Australia has changed with the closure of the state’s transitional feed-in tariff scheme, coming into line with the business case for nearly every other state in Australia besides the Northern Territory. What is casually referred to as the ‘South Australia feed-in tariff’ is actually comprised of 2 components: That which is officially known as the Transitional Feed-in Tariff (now closed to new applicants), plus a ‘retailer contribution’. The retailer contribution is set to remain indefinitely, and although the exact rate has not yet been determined (it will be announced before 2014 arrives) it is likely to be comparable to what it is now (about 10c per kilowatt-hour (kWh)), and what is common in other states–about 8-10c/kWh. In any case, it will probably be much lower than the cost of retail electricity in the state (currently about 26c/kWh).
As Warwick Johnston of Sunwiz consulting pointed out recently in Business Spectator, if precedent is anything to go by, there is likely to be a significant flattening out of installation numbers in South Australia over the coming months. This is what happened every time a feed-in tariff or other incentive was reduced, and there’s no reason to believe the same won’t happen in SA. But as Johnston notes, the installation figures in states whose feed-in tariffs are long gone–while not as high as their respective peaks–now show ‘remarkable month-on-month consistency’.
Historic solar PV system installation figures, by month. (Click to enlarge. Image via Sunwiz, via Business Specator.)
Amongst Australian state governments, South Australia has been exemplary in its execution of feed-in tariff policy–starting high, with incremental reductions, then finally falling to a sort of ‘end game’ plan. It is noteworthy that Solar Choice did not see a sudden spike in enquiries in the final days in the lead-up to the feed-in tariff deadline (as happened in the case of Queensland’s 44c/kWh FiT and many others), but instead a gradual rise over the preceding months, never rising to a fevered pitch. This steadiness is surely at least partially attributable to the relative smoothness of the SA government’s approach to subsidizing solar power.
Should I install solar panels in South Australia in 2013? 2014?
Thanks to the South Australian government’s even-handedness, there is hope that installation numbers will not fall off the proverbial cliff. While it’s true that without a feed-in tariff in place, going solar can no longer be classified as a ‘no-brainer’ investment for SA residents, many things in the solar industry have changed since feed-in tariffs began being introduced about 5 years ago. Most importantly, solar system prices have come down significantly. The biggest implication of this is that, from now on, solar panels only make sense for certain homes and businesses.
Which homes and businesses? Those who can use the solar power as it is being generated, i.e. those that use a good portion of their electricity during the day. The reason is simple: Electricity purchased from utilities/retailers is expensive (starting around 26c per kilowatt-hour (kWh)) whereas electricity from a solar system is relatively inexpensive.
A rough case study: Payback on a 5kW solar system in Adelaide
This means that using your own solar power more than power from the grid will result in a lower power bill. To give a (very rough) example, if an Adelaide home installs a 5 kilowatt (kW) solar system and manages to use 100% of the power it produces over its entire lifetime (25 years), the cost per kWh would work out to about 8-10c/kWh. The system would pay itself off in 6 years.
But the reality is that most homes will ‘self-consume’ closer to 50 or 60% of the electricity that their system produces. The excess power will be automatically exported to the grid and the system owner will be credited for each kWh at the retailer contribution rate determined by the government. If this rate is about 10c/kWh, the payback period for a 5kW solar system exporting 40% of the power it produces would be about 8 years and a return on investment of about 12%.
Going even further: Energy efficiency and energy storage
Those SA residents who are really serious about saving money on power bills and reducing their reliance on the grid will go beyond simply installing a solar PV system. More holistic approaches to achieving these aims would include an investment in energy efficiency and changes in electricity usage patterns. Additionally, solar energy storage systems would boost the rate of self-consumption of solar power by allowing it to be stored and used even after the sun has set. Energy storage solutions are already on the cusp of economic viability and set to become more prolific in the coming years.
Thinking about going solar in South Australia? Compare system prices in your area by filling out the Solar Quote Comparison request form to the right of this page, or speak to Solar Choice directly on 1300 78 72 73.
© 2013 Solar Choice Pty Ltd
He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.
James lives in Newcastle in a house with a weird solar system.
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I have been advised a problem may arise with roof top isolator’s being screwed into panel frame, when isolator was recently replaced more holes were drilled. Does this void warranty drilling into panels? I was charged $330 for a new isolator for a system 3 years old,& still under warranty. My yield to date 5857 well below energy production estimates. Also company that installed Kyocera panels excluded from the warranty policy (in Warranty exclusion) section d) & e). Can you provide some answers for me as I cannot talk to anyone from Kyocera in Australia to give me answers.
Hi Pam,
Thank you for your comment. You will need to speak with someone directly form Kyocera for any warranty issues. Here is a link to their website https://www.kyoceradocumentsolutions.com.au/contactus/Pages/default.aspx
Hello
My electricity retailer in SA (Power Direct) has advised me that the meter installed on my house is suitable for Net metering. Prior to the end of the payment of feed in tariff by the SA Govt I was often in credit on my account due to the generation by my 5kW solar system on a Gross metering basis. Would you please advise who I need to arrange to set-up/re-wire my meter to provide for Net metering; Power Direct, SA Power Network or my electrician.
Having read your informative articles on solar power, specifically Net or Gross metering, I believe that Net metering would be the best option for me with the end of feed in tariffs.
Thank you …. Tommy
Hi Tommy,
Thank you for your comment. You are correct a net meter will be the best solution not that the feed in tariff has been reduced. You can approach your energy retailor to do so.
HI
I live in the country area of south Australia and my solar system has come up with a error code which i have reported to the solar installer
have just heard back from them and they say it will be up to 20 day for the warranty paper work to go tho
Can i get them to pay some of the power bill for the time it is out
i know its a long shot but know harm in asking LOL
Thank you
Hi Justin,
If there was some sort of ‘compensation for losses’ clause in your warranty document, then you might have a chance – but that’s ordinarily the case as we’ve witnessed. If you can dig up the warranty document for the system’s inverter you should be able to find it there if it exits.
Good luck!
Hi
I live in Adelaide. I have just bought and moved into a property which already has solar power installed in 2012.
First of all I or my agent don’t know which electricity company the previous owner was with!
How can I find out that?
Secondly am I eligible to get the old high tariff for my buy back by transferring the account in my name?
Hi Satyam, Thank you for your comment.
If you are attempting to find out who used to be the energy retailor for the property it would best to approach the energy distributor. Other wise you can use sites that compare energy retailors that offer the best rates.
In regards to the feed in tariff unfortunately once a name change has been made to the account, the tariff drops.
I am building a new house in suburban McLaren Vale S.A. @ persons living in the house with minimum consumption. There is no power closeby. The nearest connection point is some 30 metres away.
Apparently it is my cost to get the power to my home. Appox. $5000.00.
I am wondering if a more cost effective option would be to go off the grid with solar and storage. Is this an alternative at this stage.
Hi Tracey,
At $5,000, it’s likely to be more affordable to get grid-connected. Off-grid systems need to be extra large and can be prohibitively expensive, depending on how much energy you consume (which you wouldn’t really have a good idea about since your home is a new-build). You’re welcome to check out our Off-grid Solar & Battery Storage System Sizing Estimator and then get some quotes through our system if you’re interested, though.
I was advised that of the 1st July 2016, there will be no government feed in tariff; which means, those who are not on a contract will only receive what the Electric Company pay, which could be anywhere from 6 cents to 10 cents. I was wondering if this is correct?
Hi Michael,
Assuming you’re in South Australia and that you are receiving the Transitional Feed-in Tariff rate of 16c/kWh, then payments end on 30 September 2016. After that, the rate will drop to approximately 6-10c/kWh, as it has in other states.
This is why so many people are considering installing battery storage in Australia!
hi, im wondering if you know about sunny island inverters, I have a remote stand alone solar system, installed 8yrs ago by the solar shop, whom went bankrupt 18mths later, and ive had problems ever since, trying to find someone who knows these systems and could come out to two wells s.a. and help please
Hi Sue,
You could try contacting SMA directly, as they may be able to help. Their national service number is: 1800 SMA AUS (1800 762 287)
We live in Adelaide have some good quotes for solar panels but don’t know what to go with Polycrystalline or Monocrystalline please tell me what’s best.
Mary.
Hi Mary,
As we’ve pointed out before, neither polycrystalline nor monocrystalline is unequivocally ‘better’ than the other. We advise that you look at the specifications of the models that you’re considering and make your judgements based on what you find.
The mono vs poly debate goes back to the beginning of Australia’s recent solar PV boom – originally monocrystalline panels were seen as categorically superior to polycrystalline panels, but these days that myth has been dispelled. They’re just different approaches.
Best of luck!
Hi James,
Quick question: are there any taxes or penalties to pay in Australia on the energy produced for self-consumption?
Thanks! Andrea.
Hi Andrea,
For solar system owners who do not operate their system for the benefit of a business (i.e. homeowners, where the main purpose is saving money, not making a profit), no GST is charged on self-consumed or exported solar power. To put this another way: if you’re not registered for GST (e.g. because you’re a home and not a business), you do not need to pay GST on your self-consumed or exported solar power.
Be aware, however, that your retailer will still charge you GST on each unit of electricity that they deliver to your home–GST is applied before they deduct any export credits from your bill, not after. So the GST you pay on your quarterly electricity bill might look higher as a percentage of your total bill than the standard GST rate.
The only situation where I possibly can imagine this changing would be if you produce so much electricity that your power bill comes back negative (with the retailer owing you money) every quarter for a while and someone caught on to it–the understanding is that if you install a residential solar system the purpose is, as stated above, to save money and not make money. Rules for most state-based feed-in tariff schemes, back when rates were still generous, put limitations on system sizes that put a de facto cap on how much a home could benefit.
Generally speaking, making a profit on solar is not really possible these days with feed-in tariff rates as low as they are, and system size limitations still exist to prevent people from getting dramatically oversized systems. Not that anyone wants to get an oversized system these days–it makes more financial sense for every solar system owner to self-consume as much of their solar energy as possible, which generally means smaller systems.
You can check out this article we wrote a while back about the tax implications of going solar, as well as this page on the ATO website.
Hope this helps.