Australia: Solar industry in major state faces meltdown

While the Australian Federal Government’s recent announcement of its $750 million Solar Flagships program will have many in the solar industry feeling hopeful about the future in the country, the populous state of New South Wales (NSW) still faces an uncertain outlook in terms of a solar installation incentive scheme. In fact, as the previous FIT scheme is now closed to new applicants, many who completed installations after that date are now providing the excess power their solar panels generate back into the grid for free.

The previous NSW FIT scheme, the Solar Bonus Scheme, closed to new applicants on April 29 and the situation for people who have installed solar after that date is grossly unfair, John Grimes from the Australian Solar Energy Society (AuSES) told pv magazine. "It’s about fairness, electricity is being donated to the energy utilities which then turn around and sell those electrons to your neighbor at a retail price," he said.

Industry meltdown

Grimes continued that the effect on the NSW solar industry has been drastic: "There has been a dramatic turndown in solar enquiries, sales and activity." To illustrate, one large national solar installer has reported to ASES that its average sales per month in NSW prior to April 29 was 630. In the first month after the freeze they sold 14 and in this month the company will install three systems. "Of the 830 or so solar companies operating in NSW, most have already let staff go," Grimes told pv magazine.

To make matters worse, the Australian Federal Government multiplier on small-scale installations will be reduced from five to three in July. There was one concession made to the solar industry in that the previous FIT scheme was not retroactively reduced from 60 to 40 cents as first proposed, in face of protests.

Solar safety in NSW

Safety has been an issued raised by the NSW Government as being a part of their concerns over solar installations in the state. In late May it launched an inspection program in Sydney into solar installations. The Department of Fair Trading, who carried out the inspection program, has completed the safety report and delivered it to the government, but it appears that the state government is backing down from earlier accusations of dangerous installations being rife.

Yesterday NSW Premier Barry O’Farrell told Parliament, "that of the 120,000 homes with solar installations, just two have had minor electrical fires in the fuse boxes, no other damage has been reported." This is a stark turnaround from pervious comments where he compared the Solar Bonus Scheme to the Federal Government’s disastrous "Pink Batts" home insulation scheme, which had cost the lives of a number of installers and was widely considered poorly designed and executed.

The solar industry’s Grimes believes that the dangers were overstated and that it is unlikely more claims of unsafe solar installations will be made: "I think comparisons with Pink Batts were completely unfair." AuSES has also established the Solar PV Best Practice Program, which provides certification, training and inspection programs with a focus on quality and safety.

Electricity by-back system

Grimes is also confident that once the public realize the unfairness in the present situation – where those who have installed solar after the FIT scheme was frozen to new entrants are essentially donating their excess electricity back into the grid – that an electricity by-back scheme will be put into place. "There will be a scheme, we need to get the design of the scheme right and [we need] a full review to determine what the [by-back] price should be, so we have sustainable and affordable scheme going forward," said Grimes.

The NSW Premier told Parliament yesterday that the safety report into solar installations in the state should be released next week.