Solar Bonus Scheme for NSW

Last updated: 3 February 2010

The NSW Government has recently announced new details for the design of the Solar Bonus Scheme set to commence on 1 January 2010.  See the Premier's Media Release of 10 November 2009.

The Scheme's regulatory framework is set out in the Electricity Supply Amendment (Solar Bonus Scheme) Act 2009 and the Electricity Supply (General) Amendment (Solar Bonus Scheme) Regulation 2009 available at http://www.legislation.nsw.gov.au/maintop/search/sessional.

The Scheme's regulatory framework provides for transitional arrangements to implement the Solar Bonus Scheme so that electricity network businesses, notably EnergyAustralia and Country Energy (and Integral Energy for a small number of customers), can transition from “net” to "gross" metering. This means that over the first six months of the Scheme, certain customers may receive different benefits under the Scheme. Households and businesses wishing to participate in the Solar Bonus Scheme should carefully read the information in the Questions and Answers particularly in relation to the transitional arrangements, metering and billing arrangements, to understand how the Scheme will apply to them during the six month transitional period.

The Solar Bonus Scheme will credit eligible participating customers with a "gross" feed-in tariff rate of 60 cents per kilowatt hour for all the electricity that their eligible solar photovoltaic (PV) system or wind turbine generates subject to the transitional arrangements. The Scheme will operate for seven years.

The key features of NSW Solar Bonus Scheme include:

• It will credit eligible customers with a 'gross' feed-in tariff rate of 60 cents per kilowatt hour for all the electricity that their eligible solar photovoltaic (PV) system or wind turbine generates subject to the transitional arrangements.
• Small electricity customers (those with an annual electricity consumption of up to 160 megawatt hours) are eligible to participate in the Scheme.
• Solar PV systems and wind turbines up to 10 kilowatts in size will be eligible for the Scheme.
• The tariff rate of 60 cents per kilowatt hour will be fixed for the life of the Scheme, meaning it will not vary with the time of the day or during the life of the Scheme.
• The Scheme will commence on 1 January 2010 (please see Question and Answer on  transitional arrangements) and will operate for 7 years.
• The Scheme will be reviewed in 2012, or when the installed capacity of renewable energy generators participating in the Scheme reaches 50 megawatts, whichever occurs first.

More information is available in the Solar Bonus Scheme Questions and Answers.

NSW Government objectives for the Scheme

• Encourage and support those who want to generate renewable energy as a response to climate change.
• Develop jobs in the renewable energy sector by assisting renewable energy generation to compete with non-renewable energy generation.
• Increase public exposure to renewable energy technology to encourage the whole community to respond to climate change.

Background on the development of the Scheme

NSW Feed-in Tariff Taskforce

In late 2008, the NSW Feed-in Tariff Taskforce was established to advise the NSW Government on the design of a feed-in tariff scheme for NSW. Terms of reference were provided to guide the work of the Taskforce.

The Taskforce considered scheme design options and submissions received in developing its report.

See the Report of the NSW Feed-in Tariff Taskforce (PDF 650 KB).

Taskforce public consultation

The Taskforce invited submissions on the design of a feed-in tariff scheme for NSW and held a stakeholder forum on 15 January 2009. The submission process has now closed.

View the submissions. The Taskforce received approximately 200 submissions. All submissions received by the Taskforce, unless marked as confidential, are available on the submissions page.

The Taskforce sought submissions on key design elements including:

• What factors should be considered in setting a tariff rate?
• Should the tariff be set for gross (all energy generated from the PV system) or net (energy generated less energy used by household)?
• Should the tariff be based on a fixed rate or a variable rate consistent with time-of-use pricing for consumption?
• Should the tariff be paid to solar PV owners by the electricity distributor or the electricity retailer?
• How long should the Government maintain the feed-in tariff and should the rate be fixed for the entire life of the program or varied over time?
• What eligibility criteria should exist for the feed-in tariff?

The Taskforce was aware that many of those in the community went to considerable effort to respond in detail to the Senate Inquiry into the Renewable Energy (Electricity) Amendment (Feed-in Tariff) Bill 2008. The Taskforce also considered submissions made in that process.

Consultation on review of eligibility criteria for the Scheme

In June 2009, the Government indicated it would further consider whether, in addition to rooftop solar photovoltaic (PV) systems, other small-scale renewable energy technologies (such as micro-wind) and community-owned solar farms could be eligible for the Scheme.

This background note (PDF 35 KB) was issued by the Government to provide guidance on the issues the Government would consider and the information it required to make a decision on the eligibility criteria for the Solar Bonus Scheme.

The Department of Environment, Climate Change & Water invited submissions on the background note. The submission process has now closed.