ACT FIT FAQs: An Interview With Mick Gentleman About The New ACT Solar Feed-In Tariff

The Electricity Feed-in (Renewable Energy Premium) Bill 2008, recently passed by the ACT Legislative Assembly, is a historic step forward in encouraging the installation of solar panels on Canberra roofs.

We owe a debt of gratitude to Mick Gentleman, MLA, for championing the Bill, and working so hard for its passage through the legislative process.

We should also thank all those in community groups and interested clubs and associations who worked hard to support the legislation, and the MLAs who voted for it.

As a leading local business in the solar field, Enviro Friendly is constanly asked questions about the Feed-In Tariff by present and prospective customers. We know the answers to some, but not all of them, so we arranged to interview Mick Genleman...

EFP: Mick, firstly we'd like to thank you for your efforts in bringing this proposal into law. When will owners be able to start getting the FIT rate?
Mick Gentleman: I'm excited that the legislation has now passed. A senior officer has now been allocated the position of writing the regulations. As soon as this is completed the Minister will fully enact the FIL. New details...

EFP: How will the rate be calculated?
Mick Gentleman: The premium rate as of July 2008 is 3.88 times the Transitional Franchise Tariff (15.2c/kWh). When determining the rate the Minister must take into account several factors. These are outlined in the Act. The Minister will determine the rate each financial year for new connections. New details...

EFP: Will both the Premium Rate (currently 3.88) and the price of electricty used for calculations be those that apply when I sign the contract?
Mick Gentleman: Yes New details...

EFP: How long will the contract be for?
Mick Gentleman: 20 years.

EFP: If the current price of electricty used for the calculation is around 15c, and the Premium Rate is 3.88, does that mean that owners will be paid almost 60c per kilowatt-hour?
Mick Gentleman: Yes. That rate will be applied to all the electricity generated from a renewable energy electricity generator for 20 years. New details...

EFP: Will that be paid on the total power production of a system?
Mick Gentleman: Yes. This is a gross Feed-in Law and leads the nation in that respect. Regardless of what power you use, you will still be paid for every kWh that you produce.

EFP: If the almost-60c per kilowatt-hour paid is fixed under the contract, and electricity prices keep rising, there will come a time when the retail price we can buy electricity at will be greater than the 60c. Will we be required under the contract to keep selling our electricity for the rest of the 20 years at less than retail price, or is there an 'out'?
Mick Gentleman: The premium rate is determined by a number of factors as outlined within the Act. One of those factors is the consideration of recouping the initial capital investment within a reasonable time frame. After consulting with the community, it was decided that a 20 year contract at a set rate would provide the certainty required to invest in renewable energy electricity generation. New details...

EFP: Some far-sighted people purchased their solar panels long before the Act was passed, and many will before it is fully enacted. Can they still take advantage of the FIT?
Mick Gentleman: Yes, anyone can sign up once the the Law is fully enacted.

EFP: Can you explain how different rates apply to different sized-systems? The terminology in the Act is 'kilowatt-hours', while PV systems are usually rated by peak output. Does the Act actually mean that systems up to 10,000 peak watts (10Kw) qualify for 100% of the Premium Rate?
Mick Gentleman: Yes.

EFP: Will ownershave to pay income tax on the FIT payments they receive as an individual householder?
Mick Gentleman: The Tax commissioner has advised that any income derived from the Feed-in Law will not be taxed. On the other hand, you will not be able to claim expenditure as depreciation.

EFP: What happens if owners sell their house during the contract period?
Mick Gentleman: The new owner can reap the rewards of the Feed-in Law.

EFP: What is the tax situation if a business wants to install solar panels?
Mick Gentleman: They should obtain individual advice from the Australian Taxation Office.

EFP: If an owner lives in NSW, but buys their electricity through ACTEW. do they qualify for the FIT?
Mick Gentleman: No, the legislation is only able to be enacted in the ACT.

EFP: Mick, thanks for talking with us, and answering our questions. You'll have given a lot of people a lot more confidence to consider a solar system on their own home.

Please double-check the New details...

If you have any questions you'd like to see answered here, please email them to us at the email address listed below (under the notice of our Business Hours).- EFP

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