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NSW

May 25, 2011

NSW solar scandal ... a million roofs forgotten

For Barry O'Farrell to just throw the local NSW solar industry under the bus is a public policy meltdown, writes Simon Mansfield from SolarDaily.com.

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The NSW solar scandal just gets worse by the day. On Tuesday, the NSW government announced a new “support package” to help solar households in “hardship” as part of its decision to retrospectively slash the gross feed-in tariff by a third from 60 cents per kilowatt hour to 40 cents.

The latest twist to the O’Farrell government’s mismanagement of the solar industry will anger many households as they have to deal with a welfare management approach to their good-faith investment in solar energy. And this is a Liberal government that was meant to fix things — not make them worse.

Retrospective commercial legislation that will seek to define a hardship loss for breach of contract will aim to avoid any exposure to traditional commercial compensation obligations, which are usually the case when a government — retrospectively — takes away a clearly defined asset and or its income producing potential. There’s even a specific section in the Australian Constitution that describes this obligation on governments.

Not content with slugging it out with solar householders — O’Farrell has moved onto attacking small businesses that sell and install solar systems. Many of these businesses are start-ups by local electricians hoping to gear up for the carbon reform and the economic revolution that is meant to flow from that reform.

Was it ever actually bad public policy?.

We now turn off our low-watt light bulbs,  computers, walls of LEDs from the TV, DVD and game machines — instead of leaving them in standby. That’s called skin in the game — and a key market force that is dampening demand growth in NSW and helping to save power companies billions of dollars by delaying the need for new power stations.

Most of the time, the power we make on our rooftop goes straight into our house — or the neighbour’s house next door or across the street — those electrons don’t get far before a local electrical load grabs them from the power grid.

Line loss is as close as you can practically get. And the distributed network of solar homes is helping to harmonise the grid. Yes it can cause problems if there are too many large systems in the one street in Western Sydney — but that’s a technical issue that the power industry is having to learn about and manage.

NSW and the other states along with the federal government have invested a significant amount of resources into building a solar economy — local installers, testers, certifiers and supply chains that cover the nation and reach out to Asia, Europe and America.

It takes years to build power plants — be they coal or nuclear — or install a million rooftops with solar panels.

But now the NSW government is working overtime to flush that investment in developing the solar industry down the drain.

None of the other states — as they progress current schemes to new ones that are based on today’s solar prices — are retrospectively breaking commercial agreements that are based on system prices set in in 2009 and 2010.

And any remaining installations in NSW are already at the new rate of 20 cents — reflecting the fast decline in solar panel costs as the global industry reaches scale.

Solar in Australia will be at 1:1 home/grid by 2015. That means it will be the same price for householders and businesses to make power on their rooftops as it does to buy it out of the grid. Connection service fees will cover the cost of providing the grid as the battery.

Which is what grid tied is all about.

But most importantly — it will take years to retrofit the rooftops of Australia. And thousands of Australians have moved into the solar and wind industry —and for Barry O’Farrell to just throw the local NSW industry under the bus is a public policy meltdown that most governments take far more than 100 days to achieve.

Barry looks like he did it in 50 days.

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