NSW GOVERNMENT REVAMPS SOLAR BONUS SCHEME
Wednesday 27 October, 2010
A review of the NSW Solar Bonus Scheme shows that it has been incredibly successful in
meeting its aims of supporting and encouraging renewable energy generation.
The NSW Solar Bonus Scheme was introduced by way of legislation in 2009, and was
supported by the NSW Government, the NSW Opposition and the Greens. It provides a
gross feed-in-tariff of 60 cents a kilowatt/hour for the solar electricity generated.
The NSW Government has now completed a statutory review of the program – as required
under the law when it reached 50 megawatts (MW) or 2012, whichever came first. NSW
reached 52 MW by mid-2010.
The review shows that the take-up rate of the scheme has been faster than expected, and
demonstrates that to date the scheme has created more than 100 MW of renewable energy
capacity. More than 50,000 customers have joined the Scheme.
Due to the unexpected rate of subscription in the first 10 months of the Solar Bonus
Scheme, NSW Government today announced a major revamp that will:
- Immediately close the current program at midnight, and
- Introduce a new and more sustainable program with a third of the current tariff
rate, or 20 cents/kWh.
Customers already participating in the scheme will not be affected by the changes.
NSW Premier Kristina Keneally said the Solar Bonus Scheme has been an overwhelming
success – exceeding all projections, but that the risk in continuing the scheme in its current
form would be further rises in electricity prices.
“The changes we introduce today strike a better balance between keeping down electricity
costs for consumers, while still supporting renewable energy generation,” Ms Keneally said.
The review of the scheme showed that a range of factors, including the strong Australian
dollar and renewable energy policies in overseas markets, has seen prices of solar panels
more than halve since the program first commenced. Since 2009, there has been a flood of
cheaper panels from China and Spain.
“What we are doing today is slowing down the scheme in order to stop any further impact on
electricity prices,” Ms Keneally said.
“Stopping the scheme at its current rate slashes anticipated costs of $2.5 billion by 2016.”
The review showed that in its current form, the scheme was increasing at around 1 MW a
day, adding tariff payments of around $3 million. NSW had the most generous tariff rate in
Australia, followed by the ACT at $0.457 cents a kWh.
If unchanged, independent modelling forecast installed capacity under the scheme to grow
from around 25 MW to nearly 1,000 MW by the end of 2016 – taking payments to $4 billion.
Ms Keneally said: “It is now time to adjust the levers so that we can continue to create solar
power, but not drive up electricity prices.”
Today, the NSW Energy Minister, Mr Paul Lynch will introduce the Electricity Supply
Amendment (Solar Bonus Scheme) Bill 2010 to enact the changes. These were approved
by State Cabinet today, but will require Opposition or Cross-bench support to pass the
legislation.
The revamp includes:
• Immediately closing the current program to new applications (as of midnight from
the date the Bill is introduced into Parliament). Customers who have already
purchased/leased a generator will have 21 days to lodge their applications to join
the program;
• Introduce a replacement program with a tariff rate of 20 cents / kWh and the same
program end date (31 December 2016);
• Introduce an overall capacity limit of 300 MW for all generators connected under the
Scheme, far more generous than caps that exist in other states including Victoria
and the ACT;
• Establishing an interagency Commercial Scale Renewable Energy Working Group,
including representatives from the network businesses to investigate opportunities
for installing mid scale solar systems as an alternative to network expansion; and
• Giving responsibility to NSW Fair Trading and Industry and Investment NSW to
determine whether a compliance and safety regime is required and develop a
suitable model.
The new program will be subject to a review on 1 July 2012 and at the end of the program
(31 December 2016).
“There is strong support in the community for this program and that’s why we are continuing
with it, but it’s about getting the balance right,” Ms Keneally said.
“This is about ensuring this hugely successful program can continue at a more sustainable
rate.
Premier Keneally said the original program received broad support across all political
parties, and she hoped the amended program would receive bipartisan support from
the NSW Opposition and crossbench.
In November 2009, the Shadow Treasurer, Mike Baird indicated his support:
“I reiterate that I support the measures outlined in the bill to boost current and future
use of solar energy in New South Wales, but it is a very small start… The
Government's legislation does not go far enough.”
Source: Mike Baird, NSW Legislative Assembly Hansard, Thursday 26 November
2009.
Last week, NSW Greens MLC Dr John Kaye reaffirmed his support for a revised program:
“It is highly possible that the scheme was either overly generous at the time at which
we passed it or events since then have made the scheme now overly generous...
When I say that, I do not seek to apportion blame to anyone. I was one of those who
voted enthusiastically for the legislation; the Greens supported the legislation.”
Source: Dr John Kaye, NSW Legislative Council Hansard, Wednesday 20 October
2010).
For a copy of the Review Report or for more information about the changes to the Solar
Bonus Scheme visit www.industry.nsw.gov.au/energy.
IMPORTANT INFORMATION FOR INSTALLERS AND NEW
CUSTOMERS OF THE SOLAR BONUS SCHEME
The NSW Government has announced some changes* for new customers
of the Solar Bonus Scheme – transitional arrangements now apply (see
below).
For all eligible systems purchased or leased after 27 October 2010, a new
“gross” tariff rate of 20 cents per kilowatt hour will apply.
Customers who have connected systems by 27 October 2010 will not be
affected.
Customers that have purchased or leased systems by 27 October 2010
can still apply to connect to the previous 60 cent gross tariff – (see below).
Transitional arrangements for new customers
• If you have purchased or leased a system by 27 October 2010 you
– or your installer - have until 18 November 2010 to apply to
connect to the grid to be eligible for the previous 60 cent gross
tariff.
• If you have paid a non-refundable deposit to purchase or lease a
system by 27 October 2010 you – or your installer - have until 18
November 2010 to apply to connect to the grid to be eligible for the
previous 60 cent gross tariff.
• The closing date of 18 November 2010 is fixed - no extensions and
no exceptions will be granted.
• Late applications to connect to the grid will be assessed under the
new tariff (20 cent).
• If you have paid a fully refundable deposit, you should carefully
consider your proposed purchase as you will be assessed under the
new tariff (20 cent).
• If you are unsure about the status of your application or your
contract arrangements contact your installer.
These changes do not apply to customers already connected.
www.industry.nsw.gov.au/energy
* subject to passage of legislation
