NSW solar uptake doubles after Solar Bonus scheme dumped

Nearly 300,000 households in NSW have invested billions in rooftop solar PV, and installations are likely to increase five-fold over the next two decades.

That’s the prediction of the NSW Government’s annual report of its Renewable Energy Action plan, released late last year.

The report notes that NSW now has roughly 814MW of rooftop solar installed across the state. Interestingly, more than half of that has been installed since the end of the solar bonus scheme, which offered a generous 60c/kWh (plus retailer add-ons) for all electricity produced from solar panels.

(The government estimates the 814MW spent on rooftop solar is equivalent to around $1.3 billion, but that is based on current prices for solar systems, so the actual figure might be way higher, given system prices have come down so sharply)

More than 146,000 customers installed 342MW of solar PV under that scheme. But since that ended, another 152,000 customers have added a further 470MW of rooftop solar, despite their being no compulsory feed in tariffs (FITs are now voluntary in NSW, although the pricing regulator recommends a payment of between 4c/kWh and 9c/kWh for electricity not consumed on the premises and exported back into the grid.

The NSW government data shows that rooftop systems are getting bigger since the initial rush under the solar scheme. Given the paucity of tariffs, that means that most of these households would be focused on consuming as much of that output as they can on their premises.

Those that installed their panels under the solar bonus scheme will have a similar incentive to self-consume – and offset the cost of grid electricity – once their payments cease at the end of 2016. That has given rise to much speculation about the economic prospects of battery storage when those customers transition to zero tariffs.

The NSW government does not address that issue in its report, but it does predict that the rate of investment in rooftop solar will continue to increase – predicting a five-fold rise in capacity over the next 20 years.

That would result in 4,000MW of rooftop solar across the state, and provide jobs for a total 45,000 jobs and at least another $5 billion in investment. Little wonder that NSW environment minister Rob Stokes is a big fan, saying it is a “non-brainer” for society. He has also announced initiatives to support mid-scale solar.

But the future of large scale renewable energy projects in the state is not so clear. Currently there are four wind farms and three solar plants under construction in the state with a total capacity of around 600 MW, an estimated investment value of $1.4 billion.

These projects are likely to support around 9,500 direct and indirect construction related jobs in regional areas and around 500 operational jobs once fully commissioned.

However, there is a further 8,391MW of renewable energy projects, worth an estimated $13 billion, either with development approval or in the process of getting one. And their prospects are poor, given the standstill in the market caused by the Abbott government’s attempts to nobble the renewable energy target, and the inability of any NSW project to file a winning tender into the only current game in town, the ACT government’s wind energy auction.

The NSW document notes that development approval has been given to more than 2,900 MW of projects with an estimated investment value of $5.9 billion and the potential to support around 14,000 construction jobs and 1000 operational jobs, and another 5,400 MW of potential projects are currently applying for development approval.

Most of these are for wind energy projects and have an estimated investment value of $7.3 billion and the potential to support approximately 26,000 construction jobs and 1800 operational jobs. The Abbott government however, and many NSW Coalition MPs, don’t like wind, including its planning minister.