Campbell Newman to slash solar subsidies

QUEENSLAND will wind back some of the most generous subsidies for solar power by slashing the feed-in tariff to households.

QUEENSLAND will wind back some of the nation's most generous subsidies for solar power by slashing the feed-in tariff to households by 80 per cent, adding State Energy Minister weight to the state government's efforts to contain the cost of renewable energy schemes.

From July 10, the feed-in rate under Queensland's Solar Bonus Scheme -- the price paid by the state for solar power generated by a household and fed into the public system -- will be cut from 44c per kilowatt hour to 8c/kWh. The electricity supplier kicks in an additional 16c/kWh.

However, the Newman government said it would honour its election commitment to preserve the entitlements of the 180,000 households that have signed on to install solar panels and sell the electricity they do not use back to the public grid.

State Energy Minister Mark McArdle said the existing scheme would have cost the equivalent of $54 per household by 2014-15 had it not been closed off, pending a recommendation by the Queensland Competition Authority next year on a "fair and reasonable" feed-in tariff.

Had the 44c/kWh rate been retained for all comers, it would have racked up an annual bill to the state of $1.8 billion by 2028, Mr McArdle said. "We need to act now to minimise what Queensland householders and businesses pay for the solar scheme," he said.

"This approach will provide certainty for the Queensland solar PV industry, and minimise any short-term impacts on investment and jobs.

"While consumers will still have to weigh up the costs and benefits, the government believes the replacement tariff will still make solar PV systems a viable proposition for many households."

The state Labor opposition attacked the move, and environment spokeswoman Jackie Trad accused Premier Campbell Newman of breaking his election pledge to maintain the feed-in tariffs for solar energy.

The Queensland Greens warned that the changes would generate uncertainty and service delivery problems for solar panel installers, still reeling from the federal government's move in March to scrap a $320 million solar hot-water rebate program.

However, Queensland is falling into line with national moves to reduce the impact of renewable energy subsidies on power prices.

The combination of federal solar rebates and state feed-in tariffs would cost consumers about $2.3bn over the next year and add $140 a year to household power bills, NSW's Independent Pricing and Regulatory Tribunal reported this month.

Queensland's solar bonus scheme is particularly generous, with its 44c/kWh rate shading that of Western Australia at 7c/kWh, Victoria on 25c/kWh and Tasmania on 20c/kWh.

But NSW Premier Barry O'Farrell was forced to dump plans to reduce the subsidy paid for electricity generated by rooftop solar panels from 60c/kWh to 40c, on a par with Queensland.

Mr McArdle said holders of the solar subsidy agreement would need to meet "eligibility criteria", which would cease if they sold or rented out the property involved or failed to install the nominated solar system by June 30 next year.

He said the four-year-old solar bonus scheme had met its aims to stimulate the local solar industry and make solar more affordable.

The uptake from 1200 to 180,000 households represented about 10 per cent of Queensland homes, the minister said.