Solar industry welcomes NSW backdown on solar tariffs

The solar and electrical industry has welcomed the New South Wales Government’s decision to abandon plans to retrospectively reduce the feed-in tariff from 60 to 40 cents.

The industry had flagged legal action against the Government if it went ahead with the plan. And while it is happy with the Coalition’s backdown, the industry warns that a new tariff rate is still needed.

John Grimes, chief executive of the Australian Solar Energy Society, says the announcement is “only half the answer”.

“We still remain in New South Wales without any sustainable feed-in tariff arrangement in place, and that’s really bad news for the entire industry. We need a sustainable and affordable scheme.”

Grimes argues what the industry needs is a “one for one” feed in tariff rate, which means that consumers are paid the same price for electricity they generate with solar panels as they are charged for electricity taken from the grid.

“That would give a good basis for the industry to survive,” Grimes says. “It wouldn’t increase electricity prices, it wouldn’t have an impact on the budget, and we think overall it’s a fair outcome.”

Grimes told SmartCompany last month the society may investigate a class-action lawsuit against the Government if contracts were broken, saying solar buyers purchased panels on the assumption they would be rewarded for feed-in electricity at 60 cents to the dollar.

The National Electrical and Communications Association also welcomed the decision, saying demand created for solar power by subsidies and various government payments led to many companies investing heavily to meet consumer demand.

“The proposed cuts to the Solar Bonus Scheme would have been detrimental to many electrical contracting businesses and consumers that have invested heavily in solar,” chief executive Lindsay Le Compte said in a statement.

“NECA welcomes the decision by the NSW Government to keep the feed-in tariff at its current level to ensure consumers and businesses are able to get a return on their investment that was prompted initially by the Government incentives.”

While the Government has previously argued the solar scheme blew out by over $1.4 billion, the solar industry has submitted its own figures, saying this figure was overstated by about $200 million.

Last month Aussie Solar director Amber Ferguson told SmartCompany that while the solar bonus scheme needs to be wound up, “retrospectively cutting the bonus scheme is an extreme measure to cut costs that have been calculated incorrectly”.