New South Wales cuts feed-in tariffs


Australia’s most populous state announced today that the feed-in tariff will be remunerated with 0.20 Australian dollars (€0.14) per kilowatt-hour of energy sent to the grid. This is a reduction from the pre-existing AU$0.60 (€0.43). The New South Wales solar bonus scheme was supposed to come into review in 2012 or subsequently when the amount of power fed into the grid hit 50 megawatts. The NSW government has quoted this as the reason for the earlier decision: the fact that due to a high rate of subscriptions, this 50MW peak was reached earlier than expected.

These changes were announced by Premier Kristina Keneally. Critics like Clean Energy Council chief executive Matthew Warren has made a statement that this is a "knee-jerk reaction" by the state government. He is also quoted as saying,"We just needed to get the funding balance right, not effectively shut the scheme down."

The scheme has been under scrutiny the last few months due to the overwhelming response from the people in NSW, leading to an apparent cost-issue for the state government. The scheme has been one of the most generous ones in Australia with regards to renewable energies. Energy Minister Paul Lynch had also asked for a review of the scheme in August when statistics showed that the threshold of 50MW had been reached. Opposition climate change spokeswoman Catherine Cusack is quoted as calling this move ‘mind-boggling’.

The scheme took off allowing households to pay off their solar investments by selling energy back into the power grid, then buy what they need at a subsidised rate.