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The cost of purchasing electricity – regardless of whether we buy it from a generator like Hydro Tasmania, or from household solar generation – only makes up a small portion of the costs you are billed for.
As an electricity retailer, we are responsible for billing our Tasmanian customers to collect the costs associated with each part of the electricity supply chain.
When your solar system is not generating enough power to cover your household consumption, your energy will be imported from the grid. The amount Aurora Energy charges you for the electricity you import covers all the costs associated with each part of the electricity supply chain, including the cost of generating electricity and maintaining the electricity network.
Because households and businesses generating solar power do not incur any of the costs of the electricity supply chain, setting the FiT rate at the same rate as the retail price would drastically overstate the value of the solar generation and provide compensation for services that a solar generator does not provide.
If the solar FiT rate were to be set higher than the value of other generation, this would create a cross-subsidy, which would ultimately be funded by customers who do not have access to solar.
In 2018, the State Government conducted a FiT Review. The outcome of the review along with answers to Frequently Asked Questions about solar pricing can be found on the Department of State Growth website.
The website for independent Regulator responsible for setting the Feed-in Tariff rates in Tasmania also has plenty of information about how the solar FiT rate is set.