Monday, February 3, 2014


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:
    1. Encourages investment in RTS.
    2. 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.
    3. Avoid forcing householders who don't have RTS into subsidising those who do. 
For simplicity it has been assumed that the FIT will be less than what a householder pays for power.

It was concluded that:

  1. Gross feed in tariffs will be better at driving investment in RTS while reducing the cost per kWh renewable power to consumers in general.
  2. Qld should replace net FIT with gross FIT for all new FIT contracts.
  3. Gross feed in tariffs should also be used where solar and storage are combined and connected to the grid.