The NSW government has announced a drastic decision that, in addition to closing the NSW Solar Bonus Scheme feed-in tariff, would retrospectively reduce the NSW feed-in tariff for those already contractually signed up for the previous scheme’s 60c/kWh gross tariff rate to a 40c/kWh gross rate, effective 1 July 2011. Those whose applications were submitted before the 29 April 2011 cut-off date but whole applications are still pending will be eligible for a 20c/kWh feed-in tariff.
Solar Choice and associates in the NSW solar power industry is considering taking legal action against the government to to fight for security of investment for the thousands of NSW residents who are signed up under the 60c scheme.
Nigel Morris, Director of Solar Business Services, was quoted as saying, “The NSW Government has just made liars out of all of us (in the Solar Industry) and destroyed the financial proposition of tens of thousands of solar system purchasers who bought in good faith.” (A rally is planned for Wed 18 May at the Customs House Library, 11:30-12:30.)
The news was announced in a press release from NSW Resources and Energy Minister Chris Hartcher.
Other details of the announcement are summarised as follows:
-The minister accuses that the scheme, whose cost is expected to reach $1.9B has been mismanaged by the previous government, and that the responses are a ‘fair and reasonable to reduce the burden on NSW taxpayers.’
-Applications for the Solar Bonus scheme received by network businesses before the 29 April 2011 hold on the the scheme was imposed will be ‘progressed and considered under the eligibility criteria’ for the scheme, and will be eligible for a 20c/kWh feed-in tariff.
-Allowing the applications to be considered will mean that approximately 40,000 additional customers will have access the Scheme, on top of the 120,000 customers already participating.
-The scheme will thereby exceed its original 300MW cap, instead reaching up to 365MW of renewable energy connected to the grid, providing ongoing work for the Solar Power industry and allowing an additional 40,000 solar power systems to be connected.
–Customers eligible for the 60c/kWh tariff will see their tariff rate reduced to 40 cents from 1 July 2011 for the remainder of the Scheme. Customers eligible for the 20c/kWh tariff will see no change.
-As mentioned above, Solar Choice and partners in the industry looking into initiating legal action agains the state government for this potential breach, and in order to ensure security for the investments of those who signed up for the scheme under the 60c feed-in tariff.
-Hartcher said: œWe acknowledge customers who joined the original 60 cent Scheme had certain expectations of financial returns, however the Scheme was never intended to provide windfall profits to a few at the expense of many. These changes will reduce the potential for customers to reap windfall profits while minimising the undue burden placed on non-participating households.”
-œAnyone applying after 28 April 2011 will still have the right to connect renewable energy generators to the grid, receive separate retailer feed-in offers and other Commonwealth incentives.
-The Government placed a two month hold on applications to the Scheme on 28 April 2011 while it considered the outcomes of Stage One of the NSW Solar Summit. The announcements are part of this ‘Solar Summit’ held by the NSW Government, which wished to fix the ‘blowout’ scheme.
-“The Solar Summit Stage Two will be held in June and will examine options to establish a long-term and sustainable future for the NSW solar industry and responsible energy policy.”
For information on the Solar Bonus Scheme visit www.industry.nsw.gov/energy or call the Energy Information Line on 1300 136 888.
Update on potential class action: Solar Choice has been consulting with class action specialists Maurice Blackburn, as well as our usual solicitors Mallesons and Piper Alderman (the latter has also been engaged by Solar Energy Industries Association). As of last night 17.5.2011, the NSW Govt was yet to release the draft legislation setting out the retrospective reduction in solar feed in tariff. At this stage there is only last Friday’s press release from the Energy Minister Chris Hartcher “ a media release itself can’t be the target of action. The potential legal avenues under consideration, and pending formal advice are: a class action under trade practices provisions and/or contract law against any electricity retailer which attempts to retrospectively reduce the feed in tariff, seeking Court orders that compel them to pay 60c rather than 40c as well as any damages for feed in rewards not paid at the higher rate from 1 July 2011 (the Govt unfortunately can’t be sued for misleading and deceptive conduct as they are not a business entity); a challenge to the new law (once known) as being in breach of express and/or implied constitutional provisions, or in some other way beyond power. We’ll keep you posted on developments. All 20 NSW based Solar Choice staff are now off to join the 11.30am solar rally at Circular Quay “ Angus Gemmell (Managing Director, Solar Choice Pty Ltd).
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