The NSW Government’s solar bonus scheme, which pays householders for the electricity they generate from their rooftop panels, has proved so popular it has reached a 50-megawatt milestone 18 months before expected.
But experts have warned that it is too generous and too short-term to encourage the industry investment in solar that is vital for a renewable energy future.
They argue the scheme must be expanded to include commercial customers, not just small-scale residential properties.
The solar panel program was established in January, offering households 60¢ a kilowatt hour for all the electricity generated until 2017. It is the most generous scheme in the country and one of only two that pay a tariff on all energy generated (the other being in the ACT, which pays 45.7¢ a kilowatt hour.
All other states and territories offer net tariffs, which pay only for the excess power householders return to the grid after using what they require.
The NSW scheme was inundated with applications, and an estimated 30,000 householders are being paid to feed renewable energy into the grid.
It was to have been reviewed in 2012 or when 50 megawatts capacity was reached, whichever came first. But the capacity point was reached this week, eight months into the program, triggering a review announced by the Energy Minister, Paul Lynch. It was the right time to evaluate the scheme, he said.
He reiterated that the length and the tariff rate of the scheme were locked into legislation.
“If any changes are to be proposed, the legislation would need to be amended and we are on the record stating that any changes would not be applied retrospectively.”
But Dr Mark Diesendorf, of the institute of environmental studies at the University of NSW, said the current tariff was too high and the seven-year period too short.
”They should have given a lower tariff for a longer period to ensure more stable growth of the industry.”
”The short burst … isn’t going to give enough support for industry to come back [from overseas] and manufacture [solar panels] in Australia.”
He nominated 40¢ a kilowatt hour as adequate and over 15 years. ”You wouldn’t have got this mad rush and you would have got stimulus for investment.”
The opposition spokeswoman on the environment, Catherine Cusack, said the scheme risked producing a boom and bust situation, where there was high demand in the short term and then nothing. ”For the people who went in early [including herself], they are going to do extremely well out of it.”
But just as important was long-term certainty for manufacturers in the solar industry.
The scheme should be open to big energy users, she said.
A climate campaigner for Greenpeace, John Hepburn, agreed the scheme should be extended. ”If we are serious … we need a feed-in tariff for large-scale as well … We need incentives for the warehouse owners, for Coles and Woolworths.”
Dr Diesendorf said schemes such as the solar bonus had long-term potential but ”bang for buck, energy efficiency is the cheapest and fastest”.
