The Australian households and businesses have voted with their wallets by installing solar PV units or for some organisations, have established solar farm off-take agreements (run-of-plant PPA’s). However, perhaps what is not so recognised is the value of the export solar generation has diminished in value and the bad news is, will continue to do so.
Minimum feed-in tariffs for small installations are set by each State’s Regulator and for larger installations, a market-based price will set the feed-in rate. Looking forward, these feed-in rates relative to the prevailing market prices are set to diminish.
The National Electricity Market is experiencing the Californian originated term ‘duck-curve’, where the daytime spot prices are impacted by plenty of solar generation leading to low half-hour spot prices during the day. Before sunrise and after sunset, without solar generation, the spot prices become higher and more volatile. The profile of the half-hour prices during the day, is said to reflect a silhouette profile of the spine of a duck, hence the term. If Australia was coining the term, perhaps we would call it the ‘kangaroo curve’.
Nevertheless, what this duck-curve means for owners of roof-top solar and naked off-take solar PPAs, is the value of the generation is coinciding with an influx of supply, hence the value of the export is diminishing relative to the average price. As more roof-top solar and utility scale solar is installed, the daytime prices are likely to reflect this additional supply leading to softer prices. Consequently, the inherent value of the export solar will decrease relative to the expected average price into the future.
For Church Resources Members, if you wish:
Read more here about how we managed a rigorous tender process for Wodonga TAFE, and enabled the planned installation of 600kw rooftop solar PV panels on three of the TAFE’s campuses in Victoria.
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