State Govt slashes solar power tariff

The Barnett Government believes it’s safe from legal action after reneging on a 10-year undertaking for households that feed-in solar power to the grid.

The State Government will slash the amount it pays householders under a Budget savings measure condemned by WA’s peak renewable energy group.

Treasurer Troy Buswell bowed to long-running pressure from Treasury officials to reveal he had taken the razor to the so-called feed-in-tariff.

Under the tariff – introduced by the Government in 2010 – registered customers are paid 40 cents for every unit of electricity their solar panels pump back into the grid.

Designed to encourage take-up of rooftop solar cells and bolster the Government’s green credentials, the tariff was scaled back and then hastily scrapped in May last year amid rampant demand and skyrocketing costs.

By that stage more than 75,000 households had signed up between Geraldton in the north and Albany in the south.

Householders who had spent thousands of dollars installing the systems took to talkback radio on Friday, saying they had been promised in writing they would receive a set price for their surplus solar power for 10 years.

Mr Buswell said: “The advice we've had is that what we're doing is allowable within the constraints of the contracts."

When asked if the State Government had betrayed a moral obligation to honour the decade-long pledge, he said: “That's a value judgment”.

He said he understood many households would “be far from pleased” with the decision but the State's economic circumstances had changed.

“Our view is that the feed-in tariff is another example of a government program that is non-affordable in the current environment.

“We have an obligation to move money into priority areas. The Government contribution in this case is going to be reduced.”

Mr Buswell said yesterday the decision would see payments to those customers cut to 30 cents per kilowatt hour by October 1 and 20 cents by July next year - potentially costing them hundreds of dollars a year.

Although the scheme’s life would be extended from 10 years to 12 years, Mr Buswell said the changes would save the State $50.6 million over the tariff’s life.

Despite the saving, the scheme is still expected to cost the State about $400 million – almost three times its original cost of $150 million "40 cents... it is by most reasonable people’s count exceedingly generous," Mr Buswell said.

"Notwithstanding the fact people will not be entirely happy – we can do it within the confines of the (customer’s) contract.”

Sustainable Energy Association chief executive Kirsten Rose was scathing of the decision, describing it as regressive and a “massive betrayal” of public trust.

“Households were promised in writing that they would receive a set price for the electricity they exported for ten years,” Ms Rose said.

“Now they will not even get a third of that. It’s a huge betrayal of public trust, and they have every right to be angry.

“West Australians who installed PV before 2011 did so when those systems were more expensive than today, and their decision relied on the FiT.

“They invested both money and good faith based on those government incentives, only to have the goalposts moved once again by the Government.

“The highest rates of solar PV installation are in the working class ‘mortgage belt’ in WA, and households installed these systems as a way to insulate themselves against electricity price rises.

“Now they will see their bills go up. This shatters any remaining trust in Government promises.”