Queensland cuts FiT by 80%

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The Campbell Newman government in the state of Queensland, Australia, has decided to reduce the feed-in tariffs by 80%. The current feed-in tariff will be reduced from AUD$0.44/kWh to just AUD$0.08/kWh, effective July 10, 2012, thus leaving Queensland residents with 10 days to register their installation and qualify for the higher FiT. However, existing scheme customers will continue to receive the AUD$0.44 tariff provided they maintain their eligibility for the scheme.

Queensland is the last Australian state to cut its FiTs to replace it with a nominal amount, supporting national decisions to reduce renewable energy subsidies. According to State energy minister Mark McArdle, the scheme would have amounted to an annual state bill of AU$1.8 billion by 2028 and the original purpose of the FiT, stimulation of the solar industry, had been achieved.

Opposition criticized the move, accusing the government of breaking the election promise of maintaining the FiT, while lobby groups voiced fears that the move could cost thousands of jobs and produce uncertainty and anxiety among solar installers.

Mark McArdle explained the decision: “We need to act now to minimize what Queensland householders and businesses pay for the solar scheme,” he said. “This approach will provide certainty for the Queensland solar PV industry, and minimize any short-term impacts on investment and jobs. While consumers will still have to weigh up the costs and benefits, the government believes the replacement tariff will still make solar PV systems a viable proposition for many households.”

Update:

In response, the Australian Solar Energy Society states, “Utilities must start paying the same rate for solar that customers pay for grid electricity. Solar is poised to compete on cost with fossil fuel generated power, so it is time Governments priced solar power the same as fossil fuel power.”

The Queensland Government will also task the Queensland Competition Authority (QCA) to review and make recommendations by early 2013 on a subsidy free “fair and reasonable” solar feed-in tariff for Queensland. This is similar to approaches taken in New South Wales, Victoria and South Australia. QCA recommendations will inform Government's mid 2013 review of the Scheme.

Additional reporting by Nilima Choudhury.

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