NSW feed-in tariff loophole to be closed

A loophole in the NSW Solar Bonus Scheme (the states feed-in tariff) that allowed energy retailers to only offer credit instead of cash will be closed.

The NSW Energy Minister, John Robertson, said via a spokesman that ”if retailers are found to be acting unfairly we will not hesitate to introduce regulations to ensure consumers are protected.”

The NSW solar industry, which has been experiencing a flurry of activity since a gross feed in tariff was announced, can now be certain that payments from the scheme will fully benefit consumers.

Under the NSW Solar Bonus Scheme, which began on the 1st of January 2010, households and small businesses that have solar energy installations are paid 60c for every kilowatt hour of electricity they generate, whether they consume it, or feed it back into the grid.

The generous scheme is expected to see many customers earn more from their solar cells then they pay in electricity, and hence have bills that spill over into substantial credit. A small loophole in the legislation allowed retailers to avoid paying out the surplus customers have earned in cash, by instead only allowing credit on their account.

The welcome announcement by the Energy Minister confirms that such behaviour is not in the spirit of the scheme, and if any retailer continues to pursue this tricky tactic, they will wilfully legislate against it.

The NSW Solar Bonus Scheme is a huge incentive for households and small businesses to install solar cells, as together with the federal governments interest free Green Loans, REC solar credits and the falling price of solar panels, most systems will pay for themselves in around 4 years and then bank years of profit.

Kobad Bhavnagri
Solar Energy Consultant
Solar Choice Pty Ltd

© 2010 Solar Choice Pty Ltd


  1. Does the ATO consider the income from the NSW Solar Bonus Scheme as taxable and if so can any of it it be written off to pay off the initial system installation costs or can it be reinvested to extend the capacity of the system? We have a 1kw system with inverter capacity to double it.

  2. It would be helpful if the retailers, gave a clear policy in how they will pay the credit built up. i.e as a credit on your account or a cheque paid to you , say quarterly. This cheque would be used to help pay back your green loan. Credit with one of the power companies wont do this for you.
    With a 2kw system, roughly I would get $2000 per year credit, with the 60c feedin tariff. $1200 would offset my average electricity bill, with $800 / year credit left over. This would assist pay back the green loan directly.
    Energy Australia, Integral Energy and Origin dont seem to have set in place what they are doing.
    please enlighten me further, I am a Integral Energy customer in a Energy Australia area

    1. This is ongoing Tony, the wholesalers have not set out in stone how they will be offering the excess finance generated from the Solar Bonus Scheme. The above article suggests that they will be made to offer excess in the form of cash, which would as you have suggested greatly assist people to pay of their finance. Expect the retailers to take this approach, because for obvious reasons a stockpile of credit is not an attractive/justified incentive for customers. The state government will likely step in if required to ensure that this arrangement is established across the board.

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