The NSW opposition has accused the state government of bungling its solar bonus scheme, saying large feed-in tariffs will add $100 a year to power bills.
NSW Premier Kristina Keneally announced today the government would slash the tariff by 40 cents per kilowatt hour (kWh), saying it needed to slow down higher-than-expected demand for its solar bonus scheme.
The move would cut anticipated energy costs by $2.5 billion by the time the scheme winds up in 2016, reducing electricity price hikes for people not signed up to the scheme.
But opposition climate change spokeswoman Catherine Cusack accused the government of ignoring warnings about an overheated scheme, which she said had blown out from a $202 million cost over seven years to at least $1.5 billion.
The scheme began in January this year and will wind up at the end of 2016.
“The blowout in the Keneally Labor government’s solar panels scheme is absolutely horrific. It is an unmitigated disaster for electricity prices,” she said.
“We estimate that households next year will be facing a $100 increase on their bills.
“It was meant to be a gentle stimulus … but it has completed exploded in the face of the government.”
However, Ms Cusack said the opposition would support the government’s legislation to revamp the scheme, introduced on Wednesday.
Announcing the changes, Ms Keneally said the sharp take-up of the scheme, and the fact that the price of solar panels had dropped by half since mid-2009, meant the government had to act to slow down demand.
A total capacity cap of 300 megawatts would also be introduced.
Solar panel owners already selling power at 60 cents per kWh will be unaffected by the change, which will take effect at midnight on Wednesday.
Anyone buying solar panels before midnight will also qualify for the 60 cent tariff, provided they file their application to join the scheme within 21 days.
The changes were prompted by a review that found take-up had accelerated at nearly six times the rate expected, Ms Keneally said.
“The changes we introduce today strike a better balance between keeping down electricity cost for consumers, while still supporting renewable energy generation,” Ms Keneally told reporters on Wednesday.
“What we are doing today is slowing down the scheme in order to stop any further impact on electricity prices.”
She denied the tariff cuts would induce a collapse in the solar panels market, as happened when the federal government scrapped its controversial insulation program.
Energy Minister Paul Lynch said the changes were “specifically designed to avoid the bust”.
Greens MP John Kaye says he supported a reduction in the tariff, but the government may be overreacting by reducing it to 20 cents per kWh.
He said the Greens would seek an amendment in the upper house to reduce the feed-in tariff to 30 cents.
“The burden on non-participating households is growing out of control and will create a political backlash against the scheme that we want to avoid,” Dr Kaye said.
“We don’t need 60 cents, but our concern is that 20 cents may be too low. Going from 60 cents to 20 cents may create a boom-bust situation, and we don’t want boom-bust.”
Ms Cusack said the opposition would not support the Greens’ amendment.
