This note compares the use of gross Vs net Feed In Tariffs (FIT) in rooftop solar (RTS) contracts.
The objective of this note was to choose a form of FIT that:
- Encourages investment in RTS.
- Helps minimize the power bills of those who don't have RTS while giving investors a reasonable return on their investment after taking account of the risks involved.
- Avoid forcing householders who don't have RTS into subsidising those who do.
It was concluded that:
- Gross feed in tariffs will be better at driving investment in RTS while reducing the cost per kWh renewable power to consumers in general.
- Qld should replace net FIT with gross FIT for all new FIT contracts.
- Gross feed in tariffs should also be used where solar and storage are combined and connected to the grid.