Cost of solar subsidy scheme blows out: Levy adds $25 to bills

THE final cost of NSW’s solar subsidy can be revealed to be $1.26 billion — three times what the-then Labor state government promised — with all non-solar households forced to chip in $25 a year.

THE final cost of NSW’s solar subsidy can be revealed to be a whopping $1.26 billion, three times what the-then Labor state government promised.

The seven-year scheme — the most generous in Australia and perhaps the world — began in 2009 but had to be dramatically scaled back in 2010 then closed to new entrants a year later amid official estimates that the bill would soar to nearly $4 billion.

When launched by then Energy Minister John Robertson, the scheme was to pay solar households 60 cents for each kilowatt hour (kWh) of electricity generated — about three times the-then actual cost of power. It was to be funded through a levy on all power users which scheme advocates said would cost households just $2 a year.

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Former NSW energy minister John Robertson. Picture: Peter Kelly

More than 120,000 households joined that version of the scheme, including Kristina Keneally, who reined-in the scheme while Premier. She later voluntarily moved to the scaled-back rate of 20c/kWh. Others state politicians, from both sides, also joined the scheme.

Former NSW Premier Kristina Keneally. Photo: Hollie Adams

Now it has emerged that the likely final cost of the scheme will be $1.26 billion. The estimate was provided by the office of Energy Minister Anthony Roberts in response to questions from The Daily Telegraph. The bill this financial year alone will be $309 million. The household levy that part-pays for the scheme is adding $25 a year to electricity bills, Mr Roberts’ spokesman said.

NSW Energy Minister Anthony Roberts. Picture: Justin Lloyd

That money is paid into the NSW Climate Change Fund then to power distributors, who pay panel owners.

The Baird Government will not commit to removing the levy once the scheme ends on December 31.

Environment and Heritage Minister Mark Speakman, who is responsible for the Climate Change Fund, said yesterday the “government is considering options for the future of the Climate Change Fund as part of its broader response to improve energy productivity, attract investment in renewable energy and prepare NSW to adapt to climate change.

Environment and Heritage Minister Mark Speakman.

“The government expects to make an announcement on the Climate Change Fund in the second half of the year.”

Labor’s energy spokesman Adam Searle said: “It’s a bit rich for the government to criticise a scheme when its own website is hailing it as successful in achieving its aim of encouraging the uptake of renewable energy in NSW.

Labor’s Adam Searle. Picture: Daniel Aarons

“This from a government which is about to punish those households who were trying to do the right thing by letting electricity companies slug them with a $600 bill for a new smart meter. Talk about hypocrisy.”

Ms Keneally, who has retired from politics, said yesterday: “The way the scheme was structured had a fund flaw that saw it blow out to utterly unaffordable and irrational levels.”