It was inevitable. The New South Wales solar gold rush is over with the NSW Government suspending the current gross feed-in tariff scheme after it was sold out five years earlier than originally planned.
What needs to happen now is pressure on the government to come up from the other end of the buying spectrum and uncap the feed tariff to cover any amount of energy production and not a limit of 10KW as is the current limit.
This will set commercial farm development on fire and drive solar installation off the roof and onto farms across the state.
The NSW Government is very sensitive on this issue, and if the solar industry calls for reform of the wholesale power market whereby the utilities have to buy all green power at the 15-20 cent KWh level — then that would be the best outcome possible.
The other reform is to allow power coops to be formed via pooled investments that allow solar farms to be developed all over the state in sizes from 50KW-1MW and above. With a timeshare style investment over the Internet used to scoop up all that guilt money in the inner cities.
NSW Labor is extremely keen for a Green preference deal and this is the sort of move that could bed that down. As such the NSW Government has a lot of self interest to be leveraged by the industry.
The NSW Libs will say anything to avoid the issue and will simply spend the next four years selling off the power stations and energy retailers. And the last thing they will do is load them up with low-margin compulsory green power purchasing at the 15-20 cent per KWh level.
The hard truth for the solar industry, the Greens and NSW unions is that the only argument for having a gross feed in tariff above the retail price is to encourage energy savings in the home by giving the home owner skin in the game and therefore a financial reason to bother turning modern low-watt lights off. Thirty cents a KWh is a compromise level for a feed in tariff that could be sold to the government if there is any real heat generated over the issue. Which I doubt there will be beyond the industry and Greens.
The hard reality of rising electricity prices is too hard for any government to ignore and the cost of this scheme was never sustainable above a certain point, and directly highlights the cost of so called direct action. Take note Mr Abbott.
With that all said, I was only saying to my wife this week we should get some more solar … before the scheme is killed. I guess we’ll just have to make do with our current 1.5KW system and the zero bill it generates for us and not actually a credit (profit) on our electricity bill.
But seriously, there is a silver lining in this move if the local industry can articulate to government a bigger vision that goes to the heart of the problem for the renewable energy industry — namely wholesale power purchase agreements that pay real money for the power produced and not the pennies they are currently paying.
A situation that only favours the big power producers and does nothing for fostering a jobs-rich renewable energy industry — based on real numbers and not the tiny amounts home-based systems can supply. And despite what some would have you believe, it does not take a carbon price for this to occur. We can clean up the renewable power market separately from the carbon price issue — if the industry would look beyond the easy money that comes from home owners feeding at another middle-class welfare bucket.
*Simon Mansfield is the publisher of SolarDaily.com