Industry upset with WA tariff-cut

Western Australia’s Energy Minister Peter Collier made the announcement on Monday morning that the installation quota had been reached and the government would be taking no further applications after he said the state had reached its 150 Megawatt capacity.

This is another set back for the industry, after the Australian Capital Territory closed its revised FIT scheme, which having commenced on 12 July ended the very next day at midnight on 13 July, and the New South Wales government severely cut back on the benefits available in that state.

Industry insiders are saying that this is another example of poor governmental management of the renewables sector, which is in desperate need of strong leadership after a spate of changes in recent months.

John Grimes, CEO of the Australian Solar Energy Society (AuSES), told pv magazine that AuSES is disappointed that the WA government will only pay 7c per kWh for exported energy under a net solar scheme going forward.

"To price distributed solar energy at the same rate as central generation, that is then sent over poles and wires often for hundreds of kilometres, including significant transmission losses, is simply unfair," he said.

"AuSES is calling on the WA government to pay a fair price for solar going forward, and not have solar households and businesses subsidising the coal fired grid in WA, and its supporting infrastructure."

Clean Energy Council (CEC) Chief Executive Matthew Warren also told the media that he was disappointed by the announcement, as the Solar Industry was again not consulted despite such a big decision being made. "The solar industry continues to seek policy certainty so that it is not at the mercy of knee-jerk reactions," Mr Warren said. "West Australians have invested in the solar industry – both as consumers and in terms of new training, skills and jobs. The WA Government should not be turning back on this emerging industry."

As reported previously in pv magazine, the The Labor Opposition party were critical of the changes, with spokesperson Kate Doust saying that "West Australians who want to act on climate change have been doing what they can to reduce their carbon footprint and many are looking to save on their bills by investing in renewable energy generation."

"We just think it’s bizarre that the government would want to wind up this type of scheme, especially when it’s been so successful," she said.

Installations were growing at a rate of 5,000 solar power systems a month in the state prior to the decision being made, which will most likely take a serious hit due to the news.

The government said that falling system prices should allow West Australians to still install systems at a reasonable price, but this latest decision has again taken the industry by surprise.

A lot of campaigning in recent times has been about providing stability in the solar market in the country, rather than making overnight decisions like this one, so that companies and employees can plan to adapt for new circumstances.

Details of the Disruption

The state had set a cap of 150MW capacity before stopping the scheme, but the latest information the solar industry had access to suggested there was still enough of the quota left for new applications to be accepted until next month.

The scheme was launched in 2009 and more than 65,000 residential installations have been installed. This demand has seen the government increase the program’s budget from AUD$23 million (US$25.4 million), to $127 million (US$140.4) in May of this year. At the same time, the government reduced the FIT rate from 40 cents per kilowatt-hour to 20 cents.

The Western Australian Energy Minister Peter Collier has said, however, that a national solar feed-in tariff could be a way for the industry to continue operating under advantageous conditions.

The Federal Government has put a lot of money into larger solar projects and a nationally administered FIT could provide a solution to the current issues according to many in the industry.

It could also provide possible stability for FIT programs, which have been notoriously haphazard due to unexpected popularity.