NSW generous gross FiT policy takes a hit

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After the initial excitement surrounding the New South Wales Solar Bonus Scheme, which gave the state the most generous feed-in tariff in the country, Energy Matters has reported that a certain amount of criticism has arisen. The scheme was officially launched on the January 1, 2010, bringing NSW residents a gross FiT payment of AUS$0.60/kWh (€0.368711) for all energy generated.

One of the main reasons this scheme was labeled as so generous was not just the AUS$0.60/kWh price tag, but also the coupling with the Federal Government Solar Credits rebate. These two elements combined make for an almost certain return on investment (ROI) within the seven-year lifetime of the FiT program. 

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The country’s Energy Minister, John Robertson, backs this scheme with predictions of 33,000 new solar panel installations in the region during the seven-year program. If achieved, this total will be more than any other state or territory to date.
  
However, some have criticized this scheme, looking at it from the perspective of those who choose not to opt in for solar power. These critics state that the cost on those who do not enter into the scheme in order to subsidize those who do will be unfair. 
  
Minister Robertson disagrees with this, “Our independent economic modeling shows the cost to the average household could be as little as 48 cents a bill and certainly no more than a dollar ninety a quarter.”
  
Another growing concern is the fact that although the scheme has now been officially launched, most electricity generators in the state are not ready for the FiT commitment, and may not be until mid-2010. This will put great pressure on those companies who are equipped.

The other, and perhaps more pressing apprehension surrounding this scheme is that it may well fall foul of its own popularity. As seen in other countries, such as Spain, a small cap on the system (NSW 50MW) can produce an initial rush for installations in the first year of the program. This will mean that the program is filled up very quickly, so some gain the full benefits of the FiT, while some fail to even join the program.
 
At present, the NSW solar bonus scheme is scheduled for review in 2012, yet this will happen sooner if the cap is reached. 

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