Issues for sizing solar systems given future changes planned for the South Australian feed in tariff

As most of you know that either have bought a solar power system since September 2011 or are currently considering buying a solar system for your home the SA solar feed in tariff will reduce towards the end of 2016.

For those fof you who don’t know the specifics currently people with systems purchased after September 2011 get 25.2 cents per kwh for solar power that they generate during the day but which is surplus to the needs of their house and so is fed back into the grid.

After June 2013 this will increase to 27.2 cents. This is made up of a 16 cent per kwh solar bonus feed in tariff plus the essential services commissioners determination of what is the fair value of solar power fed back into the grid, currently 9.2 cents but rising after 30 June 2013.

What happens at the end of September 2016 is that for these people the 16 cents falls away. Who knows what the Essential Services Commissions determination of the fair value of solar power fed into the grid will be after 2016 but lets say it is 15 cents per kwh by this stage (as it will rise if future power prices rise).

The question this raises for people considering purchasing a solar power system now is; Am I better to go a bigger system to make more money between now and the end of 2016 or go a smaller system so that I will not export too much power to the grid when the the feed in tariff is lower.

In my view customers are sill much better off to go with the largest system they can; (a) fit on their roof; and (b) afford because whether you spend a little or a lot on solar at the moment the solar pricesreturns are so good the system will have paid for itself with electricity bill savings by the time September 2016 comes around and for that time forward the system will owe you nothing and so you are better to be getting 15 cents for a lot of kwh exported to the grid than 15 cents per kwh for a few kwh’s. Also the bigger the system you go the less daytime power you will have to buy each year after 2016 ans with the way that electricity prices are rising in Australia this has to be a good thing