RENEWABLE energy experts in the Bega Valley are concerned after the State Government announced last week their solar bonus scheme, or feed-in tariff, would be slashed by two-thirds.
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Premier Kristina Keneally introduced the bonus scheme, or feed-in tariff, on January 1 this year to encourage installation of solar panels.
“The message from that feed-in tariff was basically, if you have solar panels, you’ll be paid a premium rate for the electricity generated by them, 60 cents per kilowatt,” Dr Matthew Nott, spokesperson for Clean Energy for Eternity, said.
The Keneally Government then announced last Wednesday that the tariff would be slashed to 20 cents per kilowatt – and the new rate would come into effect at midnight.
“Everyone knew (last week) that the tariff was being reviewed, and we expected it to be downsized – but not this dramatically,” Dr Nott said.
“Overnight and without warning, NSW went from having the highest feed-in tariff in Australia, to the lowest.
“This was a knee-jerk reaction to rising costs of electricity.”
Renewable energy adviser for Solarshop Australia, Reg Wells, has been living in the Bega Valley providing sales service through Bega Agricultural Services for solar panels.
“This is the death of the solar industry in NSW, absolutely,” Mr Wells said.
“All people employed in solar will be affected.
“There are thousands of little solar companies all over the state who have ordered solar panels, that have already left Japan on ships – and now those companies will have no market for that product when it gets here.”
Mr Wells said that south east NSW had the highest rate of solar panel installation in Australia, and the industry’s rapid growth had generated a lot of employment, which could now be jeopardised.
“The amount of people who will be out of work and the trickle-down effect of this in the Bega Valley will be enormous,” he said.
“I will personally be looking for work in other states because of this.”
Peter Abramowski, of Bega Agricultural Services, said the change will place more pressure on his business.
“We’ll definitely take a hit, but it’s lucky we’re not completely dependent on it,” Mr Abramowski said.
“This was an extra service we could provide and had made investments in, we’d put extra staff on because it increased our cash flow.”
Premier Keneally said the scheme had been so effective that the amount of installations occurring was more than they had allowed for; an oversight the opposition says will cost $1.5 billion over the scheme’s seven year duration.
Mr Wells processed 38 applications last Wednesday for solar panels on local roofs to ensure they made the midnight deadline and were still eligible for the 60 cents per kilowatt rate.
But already he has had to tell prospective customers who missed the cut off date that the return on their systems has now drastically changed, meaning solar would continue to cost money rather than make it back.
“It’s like saying to someone ‘Oh, can I sell you something for $8000, knowing it will cost you more money once it’s installed?’
“It’s just insane.”
Dr Nott said the recoup of 20 cents per kilowatt was not attractive because general electricity costs continue to rise.
Ageing coal powered electricity infrastructure needs to be replaced, and over the next five years this will cost $5 billion.
“The problem is, coal fired electricity is seen as cheap because we (NSW) don’t account for the enormous environmental cost it brings – if we want to move our economy away from coal powered electricity, we need a level playing field,” Dr Nott said.
“Renewable energy will become a more attractive investment with the implementation of an Emissions Trading Scheme, a carbon tax, or a combination of both.
“But until that level playing field is established, we need an interim measure like a tariff that is slowly reduced in a strategic and reasonable way.”
Meanwhile, one of the south east’s solar panel providers, Pyramid Power, is still weighing up the potential effect of the announcement on their business.
“It certainly hasn’t stopped demand, but it will slow it,” Pyramid Power spokesperson, Rebecca Hardiman, said.
“It’s very possible our interstate customers will become a bigger and more important part of the business.”
She said that due to the amount of applications processed before the tariff’s cut-off period, Pyramid Power staff would be kept busy for at least 12 months.
“In the meantime, we still have orders coming in from NSW, so hopefully it won’t have too big an impact.”