A review of the NSW Solar Bonus Scheme shows that it has been successful in meeting its aims of supporting and encouraging renewable energy generation.

The NSW Solar Bonus Scheme was introduced by way of legislation in 2009, providing a gross feed-in-tariff of 60 cents a kilowatt/hour for the solar electricity generated.

The NSW Government has now completed a statutory review of the program – as required under the law when it reached 50 megawatts (MW) or 2012, whichever came first. NSW reached 52 MW by mid-2010.

The review shows that the take-up rate of the scheme has been faster than expected, and demonstrates that to date the scheme has created more than 100 MW of renewable energy capacity. More than 50,000 customers have joined the Scheme.

Due to the unexpected rate of subscription in the first 10 months of the Solar Bonus Scheme, NSW Government today announced a major revamp that will:

• Immediately close the current program at midnight, and
• Introduce a new and more sustainable program with a third of the current tariff rate, or 20 cents/kWh.

Customers already participating in the scheme will not be affected by the changes.

The review of the scheme showed that a range of factors, including the strong Australian dollar and renewable energy policies in overseas markets, has seen prices of solar panels more than halve since the program first commenced. Since 2009, there has been a flood of cheaper panels from China and Spain.

The review showed that in its current form, the scheme was increasing at around 1 MW a day, adding tariff payments of around $3 million. NSW had the most generous tariff rate in Australia, followed by the ACT at $0.457 cents a kWh.

If unchanged, independent modelling forecast installed capacity under the scheme to grow from around 25 MW to nearly 1,000 MW by the end of 2016 – taking payments to $4 billion.

Today, the NSW Energy Minister will introduce the Electricity Supply Amendment (Solar Bonus Scheme) Bill 2010 to enact the changes. These were approved by State Cabinet today, but will require Opposition or Cross-bench support to pass the legislation.

The revamp includes:

• Immediately closing the current program to new applications (as of midnight from the date the Bill is introduced into Parliament). Customers who have already purchased/leased a generator will have 21 days to lodge their applications to join the program
• Introduce a replacement program with a tariff rate of 20 cents / kWh and the same program end date (31 December 2016);
• Introduce an overall capacity limit of 300 MW for all generators connected under the Scheme, far more generous than caps that exist in other states including Victoria and the ACT;
• Establishing an interagency Commercial Scale Renewable Energy Working Group, including representatives from the network businesses to investigate opportunities for installing mid scale solar systems as an alternative to network expansion; and
• Giving responsibility to NSW Fair Trading and Industry and Investment NSW to determine whether a compliance and safety regime is required and develop a suitable model.

The new program will be subject to a review on 1 July 2012 and at the end of the program (31 December 2016).

For a copy of the Review Report or for more information about the changes to the Solar Bonus Scheme visitwww.industry.nsw.gov.au/energy.

Reference from http://www.nsw.gov.au/news/nsw-solar-bonus-scheme-revamp