Power to rich as poor pay for solar power in flawed plan

 

Owners can now sell all the power they generate to their electricity retailer at 60c per kilowatt hour then buy it back at less than 20c/kwh. The scheme is twice as lucrative as those in South Australia and Queensland.

The over-the-top payments do not come from the pockets of power companies – or the State Government. They are paid from a levy on all electricity users. In total the seven-year scheme could transfer up to $135 million from households without solar to 73,000 households with solar, a Government taskforce found.

Businesses will have to pay for the other 70 per cent of the scheme – $315 million.

Electricity users are already facing power price rises of up to 60 per cent over the next three years – on top of a 20 per cent rise last July.

The head of the nation’s biggest solar panel company told The Daily Telegraph the NSW scheme was unsustainable, creating a short-term boom before a bust that could put 1000 people out of work. “I know it’s not a sustainable policy,” Solar Shop managing director Adrian Ferraretto said. “It’s way too generous.”

The scheme also covers households which already have panels, even though the Government task force advised that “including existing solar PV owners would increase the cost of the scheme, whilst not increasing the benefits of the scheme”.

About $30 million is likely to be paid to these households. This will not create a single job or further reduce carbon emissions. The scheme is not means tested, either, so the wealthy are most likely to take advantage of it.

The Government taskforce received many submissions about inequity. In its report it acknowledged the “policy is a cross subsidy that imposes costs on all consumers but does not provide access to all due to the high capital costs of installations”.

A solar PV systems costs a minimum of $12,500. But the Federal Government subsidises this, too.

Mr Ferraretto – whose company installs one in four systems in Australia – said consumers could now “double-dip” on the Federal and State schemes. He argued that the NSW Government should reduce the pay rate from 60c/kwh.

“That rate is very generous given we have the (Federal Government’s) solar credits working in tandem with it.
“Most countries have one or the other, not both,” he said.

The consequence of the NSW policy would be to create up to 1000 jobs for installers in 2010, Mr Ferraretto said. But the scheme’s 50 megawatt-hour cap would probably be hit the following year.

“In 12 or 18 months’ time there won’t be any business for those skilled workers,” Mr Ferraretto said.

The scheme has also been criticised for the effect it will have on other eco-friendly power projects. It will significant increase the number of Renewable Energy Certificates on the market. This pushes REC prices down.

A low REC price makes wind farms, for instance, less economically viable.

A spokeswoman for Energy Minister John Robertson said the Government received feedback welcoming the changes. And it would only cost a household $7.50 a year, she said. It would be reviewed in 2011 or when the cap was reached — whichever occurred first.

John and Madeline Forbes of Pymble had panels installed a month ago. Mr Forbes said he expected to sell about $2800 of solar power to his electricity provider and buy only $1100.

“They should send us a cheque for $1700,” Mr Forbes said.

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