Australia: Government backtrack pleases solar groups

The new Coalition Government planned to cut the rates due to a ‘budget blow-out’, but it has since emerged that the budget problems are not as bad as first thought.

The announcement made in Sydney will stop the proposed cut to the rates for existing rooftop photovoltaic installations from 60 Australian cents per kilowatt hour (kWh) to 40 cents per kWh, and will allow subscribers who signed on to the scheme between October 2010 and late April 2011 to be paid 20 cents per kWh for electricity fed back into the grid.

Australian advocacy group Do Something!, along with the Australian Solar Energy Society (AuSES) and the NSW Chapter of the Solar Energy Industries Association, enacted the ‘Go Solar’ campaign to challenge the move.

Following detailed analysis of the solar market and in-field solar data, the group provided figures to the NSW Government that argued that they had overestimated the cost of the Solar Bonus Scheme by at least AUD$232 million (€170 million).

They also rallied public support that included a protest in Sydney, after it emerged up to 110,000 people would be affected by the move.

"The people of NSW have spoken and their message is clear – they want a strong solar future for NSW," said John Grimes, the head of the Australian Solar Energy Society in a statement.

40,000 solar installations will now proceed as a result of the Premier’s announcement, according to Grimes.

"Most of all this is a win for the public of NSW, and comes as a direct result of the pressure the public and the solar industry have put on the NSW government," he said. "To make a strong solar future a reality in NSW it is now imperative that the NSW government puts in place a fair price for solar going forward."

Despite the government’s back down, the way forward for the industry remains uncertain with the Solar Bonus Scheme suspended since April 28 this year. AuSES and others are arguing for a 1 to 1 net tariff, with the electricity fed into the system offset at the regular retail rates. This was recently agreed upon in the Australian Capital Territory, but the major energy retailers have so far resisted the idea in NSW.

Greens upper house MP John Kaye described the back down as a victory for the 110,000 households and also urged the government to reassess the scheme. "Without an ongoing tariff for rooftop solar, households will not buy new units and the industry will waste away," he said in a statement.

Premier Barry O’Farrell’s office said he was circumspect when explaining the decision and admitted he had to bow to public pressure.

"I am a realist and there is no point putting up legislation, which does not have widespread support and which is going to be rejected," a spokesman for O’Farrell quoted the Premier as saying last night. "No one likes retrospective legislation, I don’t like it myself but we had to try to find a way of curtailing the blowout in the cost of the scheme."

Not all good news

The positive the industry would have taken from the abandoned plans to cut the rebate would have been tempered by the news that one of the country’s largest retailers of rooftop solar panels has gone into receivership.

Clear Solar, which operates around the nation and has installed over 10,000 units in Australia, called in administrators Pitcher Partners on Monday morning.

The collapse will allegedly cost up to 40 jobs, although the company will be bought out by one of its creditors, the electrical wholesaler Middy’s, which has guaranteed 500 outstanding contracts to install solar panels will be honored.

The cut back in tariffs in major states like NSW is part of the reason for the closure, according to members of the industry, which has prompted strong statements about the overall health of photovoltaics in the country.

For John Grimes, the government must continue to provide support for the industry in order for it to flourish.

"The solar industry in NSW remains in crisis, with many solar companies already letting staff go and slashing costs," he said. "The government must urgently act to put an end to this uncertainty, or 8,000 solar jobs will be lost, and companies closed."