NSW Govt Opts for ‘Hardship’ Package for Out-of-Pocket Solar Customers

By Rich Bowden

The NSW Government has refused to back down over its controversial decision to reduce the bonus feed-in tariff offered to households for solar power returned to the grid from 60 cents per kilowatt hour to 40 cents.

Instead Chris Hartcher, the under-fire Resources and Energy Minister, who announced the backflip earlier this month, has flagged the introduction of a controversial “hardship” compensation package. The package will be aimed at out-of-pocket households who invested heavily in solar panels under the previous provisions of the bonus agreement introduced under Labor.

Details are hard to come by on what exactly constitutes “hardship” though and the exact number of households that will qualify for compensation remains unclear. However Premier Barry O’Farrell said he was introducing the package in order to be fair to these customers.

“We want a scheme which is fair to everyone,” Mr O’Farrell told reporters. “However, there may be some people facing financial problems as a result of the changes we are making to the scheme and we will provide assistance to them.”

“We want to make sure people are able to recoup the money they put into purchasing solar panels as well as installation and connection costs,” he added.

The decision to reduce the feed-in tariff has opened a split (see previous article) in the newly-elected Coalition Government’s ranks with many moderates in the party opposing the retrospective nature of the decision, seeing the backflip as a “betrayal” of customers.

However the “hardship” package, introduced in response to growing public disquiet over the Government’s backflip, has done nothing to introduce certainty for both potential solar customers and the fledgling solar panel industry, according to experts and representatives of the NSW solar industry.

Robert Biziano of Central West Solar at Orange said the government’s about face will have negative long term implications for the solar industry.

“The real long-term implication is that there will be no public confidence in any future government renewables incentives, if or when they appear,” he told The Land newspaper. “There is just no trust there.”

Clean Energy Council CEO Matthew Warren said in a May 24 media release that the reduction of the feed-in tariff was an “unacceptable” decision.

“The retrospective reduction in the feed-in tariff remains unacceptable for solar households and we remain committed to the retention of the existing rate for those who signed up to the scheme in good faith.”

“Failing to honour these deals would immediately send the industry to the wall,” Mr Warren said.

”The challenge remains to quickly develop a new scheme that continues to deliver affordable clean energy to New South Wales households and businesses and continue to build this vital new industry,” he added.

Energy Minister Hartcher said he would consult with groups such as the Clean Energy Council, as well as representatives of the solar panel industry and pensioner and welfare groups to help target the compensation package.