NT Solar installations fall as FIT slashed by 66%

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Northern Territory solar installers had been led to expect consultation from the Gunner Labor Government and some notice in advance of any reduction to the approximately 24c per kilowatt hour feed-in tariff (FiT) which has helped make rooftop solar viable in a market blessed with solar resource, but challenged by the cost of solar systems due to its comparatively remote location.

On Thursday ABC News reported that a small solar business in Katherine had seen almost two dozen customers withdraw their interest in buying rooftop solar, following the sudden slashing of FiTs on systems signed for installation or upgrade after 5 April.

As part of its announcement of almost $31 million new investment in both large and small-scale battery storage on 5 April, the NT Government reduced its FiT on new solar installations from a one-to-one tariff (currently around 24c/kWh) to a flat rate of 8.3c/kWh and instantly almost doubled the payback period on a 6.6 kW system — payback will of course be longer still on the PV-plus-battery systems the new scheme is designed to incentivise.

Leigh Fowkes of Katherine Solar told ABC Radio Darwin that existing clients had responded immediately to the tariff change, saying “Put our job on hold.”

Energy retailer Jacana Energy estimates that around 12,000 Territorian households and businesses had installed rooftop solar before the tariff change, a surge over recent years which NT Minister for Renewables, Energy and Essential Services, Dale Wakefield, agreed had “exceeded expectations”.

That said, in late 2017, when the Northern Territory published its Roadmap to Renewables and pledged to achieve 50% renewable penetration by 2030, the Territory could only claim, 4% renewable generation, and incentives were designed to encourage rapid uptake.

Early warning of grid instability

At that time, Alan Langworthy, Chair of the expert panel which made the recommendations outlined in the Roadmap, already warned that, “The Darwin-Katherine system is powered by gas turbines and they have low inertia which can result in outages due to sudden fluctuations in generation or demand, if not well managed. Specific solutions are required as the Northern Territory transitions to renewable energy.”

All indications are that this advice has been ignored.

For example, in advance of the additional proposed connection of 60 megawatts of large-scale solar to the grid in coming months, The Northern Territory Utilities Commission recently instituted new technical requirements on large-scale renewable generators to avoid “serious reliability and security issues” on the system.

In early March the Utilities Commission said it had been forced to impose the changes, which were likely to result in new solar generators having to add battery storage units to their projects. This would increase the cost of solar farms under construction by companies such as Assure Energy and Italy’s Eni by tens of millions of dollars, and likely increase consumer energy bills. 

The Gunner Government’s $30 million investment in its own large-scale battery energy storage system (BESS), to be procured in coming months and installed by the second half of 2022, is intended to help manage fluctuations in the Darwin-Katherine grid “caused by the increasing levels of household and business behind-the-meter solar” it said in its April 5 announcement.

But Langworthy told the ABC that although the government was moving in the right direction, there was still “a very significant risk” of a system crash in the Darwin-Katherine system: “It will be two years before the battery is up and going, and I’m not sure the current mechanisms for household use are going to change people’s demand or generation model,” he said.

Wouldn’t give them the time of day?

His point highlights that the Roadmap guidance was to implement a time-of-day tariff (not a flat tariff) under which customers would be paid more for energy if they exported to the grid during peak demand periods such as in the evening or early morning when the sun is not yet at its irradiance peak.

Such a policy would have incentivised solar-plus-battery installation, said Langworthy, whereas, “With net metering left in place there’s no incentive for people to install a battery” — a problem that will be exacerbated by the now dual FiT where people with existing solar systems will remain on the one-to-one tariff, but if they “upgrade” by adding a battery their FiT will instantly be reduced.

The $800,000 earmarked by the Gunner government to subsidise battery purchase by householders and businesses will result in a maximum of around 130 new batteries in the system, which is unlikely to significantly impact the energy flows now threatening the grid, and Jacana Energy’s business model — or to make up for business lost to solar installers, as purchasers retreat from the revised economics of going renewable.

Fowkes told the ABC that installers in the region had been aware that a policy change was likely in the near future: “We all knew how unstable the grid was, and how hard it was for Power and Water to maintain the voltage … but a bit of notice, and maybe even some better timing would have been helpful.”