Several solar power suppliers yesterday urged the government to raise its wholesale electricity tariffs because the industry is facing severe pricing competition and rising maintenance costs.
In accordance with falling solar panel installation costs, the Ministry of Economic Affairs on Oct. 8 renewed its wholesale electricity tariffs, which is set to take effect next year.
Wholesale electricity tariffs on solar energy suppliers for the January-to-June period next year were reduced by between 12 percent and 14 percent from the July-to-December period this year.
With an additional 2 percent to 3 percent decline planned for the second half of next year, wholesale electricity tariffs on solar energy suppliers would fall by up to 16 percent to NT$4.72 per 1,000 kilowatt-hour from the current NT$5.62, according to the Bureau of Energy.
“It is going to be intolerable for solar power suppliers to operate with the government’s wholesale electricity tariffs further contracting because each player can no longer make a profit as a result of intensifying pricing competition,” Taiwan Photovoltaic Industry Association (TPVIA) chairman Cheng Po-wen (鄭博文) said at a hearing held by the ministry in Taipei.
Citing rules in the Renewable Energy Development Act (再生能源發展條例), Cheng said the government limited the number of solar panel installations permitted to be set up by firms, and forced them to trim maintenance costs and other operating expenses in order to make a profit because of falling wholesale electricity tariffs.
In response, bureau officials said they adjusted the wholesale electricity price in accordance with the decreasing average expense of solar panel installations.
However, Democratic Progressive Party Legislator Tien Chiu-chin (田秋堇) said the act prevented firms from gaining competitiveness because it banned them from increasing their number of solar panel installations every year.
To ensure the industry’s long-term development, the government should revamp either the act or the bidding process local solar power suppliers must go through, Tien said at the hearing.
Bureau officials said they would consider the suggestions from all parties when making a decision.
In a bid to encourage firms to to build installations on outlying islands, the bureau said it would purchase renewable energy generated on Kinmen and Matsu with a 15 percent premium.
Besides solar, wholesale electricity tariffs on wind, biomass, hydro and geothermal power had been set to increase by between 0.31 percent and 16.05 percent at a range of between NT$2.5 and NT$8.6 per 1,000 kilowatt-hour, according to the bureau.