More Solar Power Industry responses to proposed NSW Solar Bonus Scheme changes

In a different perspective on the NSW Solar Bonus Scheme debacle, Clean Energy Council Chief Executive officer Matthew Warren showed some sympathy for the O’Farrell Government’s unenviable position of having inherited a ˜diabolical’ policy problem with no quick fixes. Customers receiving the 60c/kWh feed-in tariff on the old agreement stand to have their rates cut to 40c/kWh under proposals by the current NSW Liberal government, which says that the scheme in its current form threatens an unacceptable budget blowout that would end up being shouldered either by taxpayers or anyone who pays a home electricity bill. Meanwhile, the Australian Solar Energy Society, Do Something!, and and the Solar Energy Industries Association have proposed a play by which the expected budget shortfall for the scheme could be avoided or paid for.

The Clean Energy Council, in a media release, pointed out that although the solar feed-in tariff changes will inevitably anger many households, they will also save more than 5000 jobs in the solar power industry. Under the proposed changes, the former 300MW scheme cap would be lifted to 365MW to allow in those who had applied for the scheme but wouldn’t have otherwise been eligible for any tariff. The denial of any feed-in tariff to those who had submitted applications could have resulted in canceled installations and a huge knock to the solar industry, and part of the Liberal government’s compromise was to cut the 60c FiT retroactively, but allow in newcomers on a 20c tariff. More than 40,000 applications lodged with the government under the scheme were at risk and solar companies had invested hundreds of millions of dollars in stock for these new systems. œFailing to honour these deals would immediately send the industry to the wall, Mr Warren said.

At the same time, the CEC has argued strongly that no changes should be made to the 60c tariff, and commitments made under the agreement to those who signed up on that rate should be honoured, whether the recipients would suffer economic hardship as a result of the changes or not. œThe Clean Energy Council argued strongly for the honouring of existing applications, avoiding any cuts to existing household support and the evolution of a new scheme to continue the success of the solar industry in NSW, Mr Warren said. œToday’s announcement shows the Government is committed to sustaining a viable solar industry, but it comes at a terrible price. The retrospective reduction in the feed-in tariff remains unacceptable for solar households and we remain committed to the retention of the existing rate for those who signed up to the scheme in good faith.

Relatedly, in a joint letter penned by the Solar Energy Society of Australia, not-for-profit Do Something!, and the Solar Energy Industries Association have issued a joint letter suggesting how the shortfall for the scheme could be met by the NSW government without retroactive reduction of the 60c fit and without totally hanging those with pending solar installation applications out to dry. The letter offers four points detailing how the costs of the NSW Solar Bonus scheme may not be as severe as the current government is suggesting, or how up to $455M could be shaved from the scheme in a more equitable, less dramatic way. The NSW government estimates that the cost of the scheme will come out to $1.9B by the end of the scheme, which is guaranteed until 2016. The Do Something letter alleges that the NSW government has not been transparent in its calculations as to the costs of the scheme.

The four points are summarised as follows:

-Recalculate the solar yield analysis, which are based on solar irradiance levels from the Northern Territory.

-Further cost reductions in the scheme: the government has not accounted for the fact that many customers are currently on a 20c/kWh feed-in tariff, not the troublesome 60c tariff.

-The Solar Bonus scheme should be capped, as originally intended, at 300MW

-Eliminating windfall profits on the backs of taxpayers by electricity retailers

For more details, please read the open letter.

© 2011 Solar Choice Pty Ltd

Sources and Links:

Clean Energy Council media release, œNSW Solar Changes “ Industry Response

Do Something!, œSmart Solar Strategy (pdf)


James Martin II