TasCOSS Submission to the Department of State Growth Solar Feed-In Tariff Review

Submission to the Department of State Growth

Solar Feed-In Tariff Review August 2018

About TasCOSS TasCOSS is the peak body for the community services sector in Tasmania. Our membership includes individuals and organisations active in the provision of community services to low income, vulnerable and disadvantaged Tasmanians. TasCOSS represents the interests of its members and their clients to government, regulators, the media and the public. Through our advocacy and policy development, we draw attention to the causes of poverty and disadvantage, and promote the adoption of effective solutions to address these issues.

Please direct any enquiries about this submission to: Kym Goodes CEO Ph. 03 6169 9500 Email: Kym@tascoss.org.au

The TasCOSS Energy Advocacy & Research project is funded by Energy Consumers Australia Limited (www.energyconsumersaustralia.com.au) as part of its grants process for consumer advocacy project and research projects for the benefit of consumers of electricity and natural gas.

The views expressed in this document do not necessarily reflect the views of Energy Consumers Australia.

INTRODUCTION The Tasmanian Council of Social Services (TasCOSS) welcomes the opportunity to respond to the Solar Feed in Tariff (FiT) Review announced by the three major parties prior to the state election.

TasCOSS understands that there are complex issues involved in this policy area so we have elected not to raise the issue of concessions or respond to all of the factors in setting a fair and equitable FiT highlighted in the Issues Paper. The Office of the Tasmanian Regulator (OTTER) Review of the basis for determining the next FiT will allow further input from TasCOSS on some of these issues.

Our comments in this submission focus on representing the interests of Tasmanians on low incomes and experiencing disadvantage, where the high cost of securing their energy needs now regularly exceeds their capacity to pay.

While there are undoubtedly a range of benefits of increased rooftop solar PV in Tasmania, TasCOSS is concerned that a departure from the existing feed-in tariff policy, on its own, could potentially shift these costs onto Aurora Energy’s wider customer base. TasCOSS believes the Tasmanian Government has other policy levers to provide incentives for increased rooftop solar PV other than changes to the feed-in tariff.

Background TasCOSS acknowledges the energy market has already undergone significant changes and that the market continues to evolve quickly, particularly due to increased solar generation, battery storage, digital metering and consumer energy contribution to the grid. We also recognise that rooftop solar PV installation benefits the community through employment opportunities and emissions reductions, and supports the Tasmanian Government’s objective to grow the renewable energy export sector in Tasmania. TasCOSS further acknowledges that without a significant level of policy certainty there is the potential for a two-tiered system that favours those who can access and afford distributive energy resources (solar panels) and those who cannot.

In part, the current Government’s Restoring Tasmania’s Energy Advantage Report highlights this issue: There has been a rapid increase in the amount of household solar PV systems installed in Tasmania in recent years, stimulated by decreasing solar PV prices, higher electricity prices and attractive incentive schemes. This trend has occurred across the country, with solar owners understandably investing in PV in response to these signals. The Australian Energy Market Operator forecasts continued strong growth in rooftop PV in Tasmania over the next decade,

from the current installed capacity of approximately 70 MW to approximately 300 MW by 2024.1

Electricity is a basic and essential human right for all Tasmanians. As an essential service, electricity needs to be available to all who need it, at a price they can afford, in an environment where their rights are respected and protected. When low income and disadvantaged Tasmanians cannot afford the electricity they need, they will go without essentials like heating, cooking, cleaning and lights. Without electricity, they often lose access to study options, to information about work opportunities and to online government services. When electricity is disconnected or rationed, people also suffer in areas such as physical wellbeing, mental health and social inclusion.

Tasmanians typically face a large electricity bill every 3 months or for Pay as You Go customers, daily costs that are hard to manage. Winter bills are generally about twice as much as summer bills. Approximately 1.2% of Tasmanian households are in the Aurora Hardship Program and over 30% of Aurora customers are on a concession, which is considered a high proportion.2 Although the Tasmanian Government has placed a cap on electricity price increases for residential consumers, the number of Tasmanians needing hardship support may increase due to cost of living pressures and factors such as the scarcity of affordable housing leading to larger household sizes and higher bills.

More equitable alternatives The Review explicitly aims to identify ways to “incentivise further installation of solar”.

TasCOSS believes the State Government could look to incentives other than changing the FiT to increase solar PV installation, which include: 

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Making solar funding available for eligible community organisations and local governments for small-scale renewable energy generation and energy storage projects. These could include the purchase and installation of solar PV systems and solar power battery storage. Installing the maximum practical amount of solar PV on all Tasmanian Government schools. This would have multiple advantages: schools use most of their energy in the daytime, unlike residential households, which maximises savings from solar as energy is consumed as it is generated. Reduced electricity bills free up budget for other educational purposes. Solar installation in schools could be used to engage students with energy and climate change as a curriculum focus.

Tasmania Government, Restoring Tasmania’s Energy Advantage https://www.stategrowth.tas.gov.au/__data/assets/pdf_file/0009/97236/Tasmanian_Energy_Strategy_20141219.pdf 2 AER March 2018 Issues Paper TasNetworks Distribution and Transmission Determination 2019-2024 p 11. In recent years, Aurora’s hardship program has been increasingly proactive in early intervention and responding to need. Aurora’s increasing commitment to supporting Tasmanians through their hardship program may be reflected in the high proportion of hardship customers.

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Increased energy efficiency standards for new housing and rental dwellings.

Social and public housing stock and private rental properties, where tenants are not permitted and do not have long-term economic incentives to install solar PV on the roof, should be a focus of these increased standards.

Increasing and means testing the available funding for effective energy programs that target low income and disadvantaged Tasmanians in home ownership. This is in recognition that Tasmanian households with limited financial means have few resources or sources of assistance to help them improve the energy efficiency of their homes.

Reviewing energy concessions to better understand their adequacy and the scope for concessions to better target and respond to households in greatest need.

Conclusion Efforts to improve and provide access to reliable, affordable and clean energy are supported, but this objective does not necessitate increases in wholesale, retail and network costs that are usually passed onto the consumers. TasCOSS reiterates the principle that Tasmanian Government expenditure should be progressive and targeted to those in greatest need. Low income and disadvantaged households already face costs beyond acceptable for the essential services needed to participate in the Tasmanian community, to be warm, and to live a healthy life.