• Retail licence exemptions for Solar Power Purchase Agreement Providers

    Solar Power Purchase Agreements

    Providers can install a solar power system on a customer’s premises without charging any initial capital outlay. Instead, the customer agrees to purchase the electricity generated by the solar power system for an agreed rate over the life of the contract. This is known as a solar power purchase agreement (PPA). 

    Retail licensing regulatory framework

    The Electricity Industry Act 2004 (the Act) states that any person selling electricity to customers must hold a retail licence or licence exemption.

    Solar PPAs involve selling electricity to customers, but the arrangement cannot readily fit within the existing retail licensing framework outlined in the Act. Some of the requirements under both the Act and the Code of Conduct for the Supply of Electricity to Small Use Customers 2016 (the Small Use Customer Code) are either not relevant to providers of solar PPAs, or will impose a significant burden on providers, with little corresponding benefit.

    As the retail licence regulatory framework is not considered suitable, solar PPA providers will need to hold an exemption from the requirement to hold a retail licence in order to sell electricity under a solar PPA.

    As an example, current exemptions from the requirements to hold a retail licence are in the Electricity Industry Exemption Order 2005 and the Electricity Industry (Caravans Park Operators) Exemption Order 2005

    Review of licensing arrangements for solar PPA providers

    The Public Utilities Office reviewed the licensing arrangements for solar PPA providers to examine the options for regulating them under the licence exemption framework and make a recommendation to the Minister for Energy on a preferred approach.

    The Draft Recommendations Report and Final Recommendations Report available below provide detailed information on the review process.

    Final Recommendations Report     

    The Public Utilities Office’s Final Recommendations Report included recommendations for a licence exemption framework requiring solar PPA providers to apply for individual retail licence exemptions subject to consumer protection and compliance reporting conditions. The previous Minister for Energy endorsed the recommendations.

    Draft Recommendations Report

    In July 2015, the Public Utilities Office published a Draft Recommendations report for public comment on the options available for exempting solar PPA providers. 

    Submissions on the Draft Recommendations Report were received from:.

    Licence Exemption Application Guidelines

    The Public Utilities Office is now accepting applications from solar PPA providers for retail licence exemptions. To assist solar PPA providers to apply for a retail licence exemption, the Public Utilities Office has prepared Licence Exemption Application Guidelines: Solar Power Purchase Agreement Providers

    Industry and Consumer Guidelines

    The Public Utilities Office has also prepared Industry and Consumer Guidelines:

    The Industry and Consumer Guidelines have been prepared to give:

    • industry (solar PPA providers) guidance on complying with their licence exemption conditions, in particular the requirement to provide prospective customers with a Product Disclosure Statement;  and
    • customers of solar PPA providers with guidance and information on the licence exemption process and solar PPAs more generally.

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