NSW government cuts feed-in tariff

November 5, 2010
Melbourne, January 2010. Photo: Takver/Flickr

The NSW government has decided to cut the solar photovoltaic feed-in tariff from 60 cents per kilowatt hour (kW/h) to 20 cents per kW/h.

The October 27 announcement came after the tariff received a strong uptake, particularly in Sydney’s western suburbs and rural NSW. The total capacity once remaining orders are connected will be around 193 megawatts (MW).

The Greens and the Australian Manufacturing Workers Union (AMWU) slammed the decision to axe the tariff.

On October 28, NSW AMWU secretary Tim Ayres said: “This move by the NSW government is hasty and ill-considered … Solar has been used as a scapegoat by a government facing pressure over rising power prices due to ageing infrastructure.”

Greens MLC John Kaye said the Greens supported reducing the tariff but that “going from 60 cents to 20 cents may create a boom-bust situation, and we don't want boom-bust”, the October 27 Australian reported.

A November 3 report on the EcoGeneration website reported Australian Solar Energy Society (AuSES) CEO John Grimes said the government had “underestimated the impact on the solar industry”.

Grimes said the government “swung the tax too hard and jobs will be slashed and businesses ruined … Businesses are reporting that they have lost 80 to 90 per cent of their work, and people have already been laid off.”

Photovoltaic panels are expensive compared to conventional power sources. But they pay off the energy used in their manufacture in a short time and will go on producing power for 30 years or more.

A feed-in tariff allows the person buying the solar panels to make their investment back in a much quicker period: three or four years instead of 10.

Such a scheme adds a tariff to the broader population’s power bills corresponding to uptake of the offer. It makes investing in solar more financially attractive, but increases the price of power for people without solar panels.

However, a feed-in tariff for industrial-scale wind farms and solar thermal plants would deliver substantially more green energy per dollar than a feed-in tariff for solar panels.

Wind and solar thermal deliver cheaper electricity than solar panels. Even a low feed-in tariff of 20 cents per kW/h for solar thermal plants and large wind farms would immediately stimulate investment — as long as the tariff was guaranteed and not subject to being axed at short notice by the government.

An industrial feed-in tariff could compliment a generous tariff for rooftop solar panels.

A November 4 rally at Sydney Town Hall, organised by AuSES, called for the tariff to be restored to 45 cents per kW/h. Grimes told the rally that 2000 workers would lose their jobs by Christmas due to the cuts.

Kaye called for an immediate interim boost in the tariff to 30 cents per kW/h and Ayres called on the federal government to implement a uniform national feed-in tariff.

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