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Cabinet reverses solar tariff decision

Liberal rebellion on solar heats up
Ian Milne, manager of Perth-based group Avant Solar. Picture: Michael O'Brien/The West Australian

The Government has reversed its unpopular decision to halve the solar feed in tariff after four days of widespread, stinging criticism.

Announcing the decision midway through today’s weekly Cabinet meeting, Premier Colin Barnett admitted the Government got it wrong.

Thursday’s Budget revealed that 40c for every unit of electricity contributed to the grid would be halved to 20c by July for solar panel customers signed up to the Government’s feed-in tariff scheme.

Mr Barnett said Cabinet had approved a decision to reverse the stance.

“Quite simply, we got this decision wrong and we have to fix it,” the Premier said in a statement a short time ago. “We have listened, and we appreciate the commitment that many people have made to take up renewable energy, like solar power.

“We make many decisions in casting the State Budget - and at all times we are trying to achieve a balance on behalf of all West Australians.

“We understand that this measure would have had an unfair impact on one section of the community and it has to be reversed.”

The decision appeared to have caught Treasurer Troy Buswell by surprise.

Mr Buswell was still defending his Budgetary decision on the way into Cabinet earlier this morning.

“From my point of view, the Budget decisions have been made and we are now moving on and focusing on implementing them,” he said.

Mr Buswell denied the reversal was embrassing or that he’d been hung out to dry.

“I have a job to do in Government ... protecting the finances of the State,” he said.

“It’s not always going to mean that you’re the most popular person in town.

"Government is a dynamic decision making process. We made a decision, the decision was changed."

Earlier today, Energy Minister Mike Nahan and several other ministers refused to defend the stance, brushing past media on the way into the meeting.

It was left to senior Minister John Day to concede that the Government should re-think the cost-cutting measure.

“It has been a very generous scheme but on the other hand, people had clear expectations,” he said.

“I’m a local member of Parliament, there are a few people who are unhappy so we are not insensitive to those concerns.

“I’m sure we’ll go in that room over there (cabinet) and it will be one of the issues that will be discussed.”

Perth-based Avant Solar manager Ian Milne expressed his delight at the Government’s back-flip this morning, saying it was a win for “people power”.

Mr Milne said he was also relieved the decision would remove the risk of suppliers such as his business being exposed to legal action from affected customers after it emerged the industry and not the Government was likely to be liable.

“I’m absolutely delighted because there were a lot of customers who were going to be significantly affected by this and the ones I really felt for were the ones who had financed (the solar panels) for their retirement,” Mr Milne said.

“For a lot of people this will have caused a lot of damage and loss of face for the Government but there will be hope that people power has prevailed.”

The growing rebellion came as a letter from Synergy sent in 2011 emerged as a key piece of evidence in any potential legal fight over the changes.

The letter - sent soon after the Government cut the tariff in a previous revision to the scheme - says that customers entitled to the 40 cent payment would get it "for the full term of your 10-year contract".

Government MPs had been flooded with complaints from irate voters about the decision to cut to the so-called solar feed-in tariff from 40 cents to 20 cents, with the issue spilling over to the Federal election campaign as a vote turn-er against Liberal candidates.

Maverick Hillarys MLA Rob Johnson threatened to cross the floor for the first time in his 20-year career to vote against the measure, while Southern River MLA Peter Abetz said the Government had acted unethically.

Mr Johnson said the Government had acted with a "lack of integrity" by reneging on a deal with 75,000 solar panel owners in a bid to save $51.2 million over the next four years.

"I think it's a legal issue, but it's also a moral issue," he said. "For the sake of just $10 million a year . . . to renege on this and basically dud so many West Australians is a disgrace."

The political rebellion comes as leading Perth lawyer John Hammond issued a warning that solar installers - many of them small, family-run businesses - could be liable in the event of lawsuits from disgruntled homeowners.

Mr Hammond said it was possible the 2011 letter from Synergy, coupled with the "ambivalent" terms and conditions of the subsidy contract, meant the Government's position might not stand up in court.

But he cautioned that beating the State would be difficult and it was more likely that solar installers could be liable.

He described the situation as a legal "dog's breakfast" and criticised the Government for creating a "political problem" affecting consumers and small businesses.

"Based on promises the State made people went out and acquired this equipment and entered into contracts," Mr Hammond said.

"So that is the basis of the problem for the State because people incurred a loss by reason of promises of a 10-year subsidy."