IEEE Power & Energy Magazine - July/August 2015 - 55

2.0
1.9
Electricity-December 1999 = 1.0

1.8
1.7
1.6
1.5
1.4
1.3
1.2
1.1
1.0

14
20

13
20

12
20

11
20

10
20

09
20

08
20

06
20

05
20

04
20

03
20

02
20

01
20

00
20

0.9

Year (as of December)

figure 2. The Australian household electricity price index, adjusted for changes in the consumer price index. (Source:
Australian Bureau of Statistics 2015.)

users. Large emission-intensive and trade-exposed energy
users are partially exempt from certificate obligations.
The capital subsidy arrangements were fundamentally
changed from the start of 2011. Before 2011, the certificates
created by PVs were fungible with the certificates from other
certificate-eligible renewable sources. At that time, certificate prices were determined in a market that reflected an
annual mandatory demand for certificates but a variant supply of certificates from PVs and other competing eligible
renewable energy technologies. After 1 January 2011, certificates from PVs became part of a subsidy scheme with
unlimited certificate volume, and the Australian government became a buyer of last resort offering a fixed price of
AU$40 per certificate. Again, charges are passed through to
users through an annual obligation determined by the regulator based on the number of certificates created.
The majority of PV owners sold their certificates to their
installers as part of their PV purchase. PV installers would
typically offer to purchase certificates from their customers
for AU$25-AU$30 per certificate, and they would then typically sell these certificates to retailers directly or through
brokers for around 25% more than they paid.
Production Subsidies

Production subsidies were paid through jurisdictional,
state and territory government, determined FiTs that set a
price for electricity fed back into the electricity grid. The
july/august 2015

FiT prices varied significantly in each jurisdiction over the
period from 2008 to 2013, scaled back as solar PV installations increased, as shown in Figure 4.
In addition to jurisdictional FiTs, energy retailers typically also offered payments to households for electricity
exported to the electricity grids from their PV systems. In
all jurisdictions other than New South Wales (NSW) and
the Australian Capital Territory (ACT), the FiT and retailer
payments are based on the net metered generation, i.e., PV
production minus electricity used at the point of installation.
In NSW and the ACT, FiT payments were based on total PV
production ("gross metered" production).
The retailers in turn recover the aggregate mandatory
feed-in payments by charging this to the regulated network
service providers, except in Western Australia. The regulated
network service providers in turn recover the FiT payments
from electricity consumers through regulated charges to the
consumers that they supply. In the case of one jurisdiction
NSW, the retailers recover the FiT payments from the jurisdictional government that then in turn recovers this through
a levy on all energy users. The NSW government, uniquely,
also requires retailers to pay the government a set amount
(for fiscal year 2013/2014 this was deemed AU$.066/kWh)
for the electricity procured from PV owners.
In addition to FiTs, PV owners typically also receive
payment from their energy retailers for electricity production exported to the grid, which the retailers then sell
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