ELECTRICITY SUPPLY AMENDMENT (SOLAR BONUS SCHEME) BILL 2009
Agreement in Principle
Mr GREG PIPER
(Lake Macquarie) [10.56 a.m.]: I speak in support of the Electricity Supply Amendment (Solar Bonus Scheme) Bill 2009. The bill is an important step in the transition to the greater use of renewable energy in New South Wales. I spoke on this topic in this House on 18 November 2007 when I supported the proposed 60¢ per kilowatt tariff, and I am pleased that the time for enactment is getting closer. The announcement by the Minister for Climate Change and the Environment that New South Wales would introduce a feed-in tariff for solar photovoltaic systems up to 10 kilowatts was good news for the photovoltaic industry and for people wanting to invest in this form of renewable energy. Installing domestic photovoltaic systems is a significant step that people can take in their personal actions against climate change. There are also proposals for small-scale wind turbines, a technology that has seen some recent significant innovation and which would also benefit by the new premium tariff.
In my speech two years ago I referred to the importance of truly acknowledging the production from domestic photovoltaic systems and paying a premium tariff for the gross production, not just to any surplus fed into the grid. This is an appropriate step to take because it provides encouragement to those who are prepared to invest in the new technology and who want to show leadership on an important global environmental issue. The cost of domestic photovoltaic installations has been prohibitive to all but the most committed: with lengthy pay-back periods on the capital investment there has been little or no financial incentive to make such a considerable investment. The new feed-in tariff is a move that will provide a real incentive for investment in photovoltaic systems, and in so doing will create jobs and further encourage investment in improving the technology.
There is, however, a risk that the seven-year limitation on operation of the scheme will lead to a boom-and-bust cycle that will surely test the industry's capacity firstly to step up production to meet demand and then to achieve economies of scale prior to the end of the scheme. If domestic photovoltaic systems have not become cost competitive within the next seven years, continuing uptake of the new technology could again be stifled. It is important that the review to take place in 2012 considers a stable future for the industry. Let us face it, if investments are not made within the very early days of the scheme there will once again be very little incentive to invest. Who would choose to install a relatively expensive alternative energy system with a view to gaining a gross feed-in tariff when there are only two or fewer years left of the scheme? My guess is: not many people. And the benefit to potential investors will gradually and inexorably decline as the end date approaches.
The Minister in his second reading speech stated that customers with a standard installation can expect to receive more than $10,000 during the course of the scheme. This simplistic statement is clearly misleading as this outcome could only apply to those who invest from the very start of the scheme—following that there is a diminishing return down to zero at the end of the seven-year period—unless of course changes are made in the ensuing period. I suggest that any consumer joining the scheme should be provided the same opportunity and therefore at whatever point they join the scheme that customer should be guaranteed seven years of feed-in tariff from that point.
The scheme could still be limited for the taking up of new customers to seven years, however this variation would provide equitable and consistent incentives over the life of the Solar Bonus Scheme. I strongly urge the Government to consider this option during or even prior to its review in 2012. That having been said, I am pleased that the Government has taken the step of introducing the new solar bonus, but I continue to support an extended time frame for the premium tariff. I was delighted when the former Minister for the Environment and Climate Change, the Hon. Carmel Tebbutt, first announced this scheme, and I am very pleased that it is now being delivered.
Mr GEOFF PROVEST
(Tweed) [11.00 a.m.]: The purpose of the Electricity Supply Amendment (Solar Bonus) Scheme Bill 2009 is to establish a feed-in tariff lasting seven years for small scale solar panels and wind turbines, commencing on 1 January 2010. The scheme will pay 60¢ per kilowatt hour for all electricity generated by systems up to 10 kilowatts by residential, small business and community groups. It will increase the uptake of small-scale renewable energy within the community. The bill is a step in the right direction, but some interesting anomalies arise about which I have some concerns. The Tweed has a large number of renewable energy generating outlets including solar, wind and even water; it is an environmentally conscious area. Only recently a number of people expressed their concerns to me.
I have been monitoring the Government's decision on the legislation. As previous Opposition members have said, we were very concerned because for a long time we thought we were going down the net feed-in tariff road. Once again a lot of comparisons are made between my electorate and those across the border. This scheme will last only seven years, but in Queensland it will last for up to 20 years. Once again, Queensland seems to support renewable energy, particularly solar. Queensland's scheme is a lot larger than ours. Some time ago it was the first State to introduce rainwater tank rebates. Feed-in tariffs exist in approximately 50 countries in the world and in most Australian States and Territories. The Australian Capital Territory is the only jurisdiction that currently has a gross feed-in tariff.
I am also concerned that the Government has done little modelling in relation to the cost to it and consumers. I want the scheme to be extended. In recent times a number of owners of commercial premises, particularly in the Tweed, have made representations to me. They produce more than 10 kilowatts per annum and will therefore be excluded from the scheme. The scheme is capped at 10 kilowatts, which refers only to residential community groups. I know the Coalition would prefer the inclusion of larger businesses and other systems within the scheme. The Government has only one tariff for eligibility systems. The Coalition would have preferred there to be different tariffs for each different type of technology to reduce the overall content of the scheme. It would also stimulate research and investment in other forms of renewable energy.
Pertinent to this debate is that last September I asked a question on notice about how much money the Government had spent on solar energy research and development in 2007-08 year to date, to which I received a reply that one key project is a $5 million New South Wales Energy Challenge prize that encourages innovative solutions for providing clean energy. I was also advised that since the 2006-07 financial year the Government has invested only $2 million for solar energy research and infrastructure and $2.6 million for renewable energy and climate change related research. Considering the Government's total budget and the community's concerns to be involved in renewable energy projects, I find that lack of investment in research and encouragement of solar, geothermal and myriad other renewable sources amazing. More should be done and more money should be spent in those areas.
An argument against the scheme is that it is unbalanced, being generous to systems less than three kilowatts, but excluding larger systems and businesses. I would like the Minister to respond to the argument that the scheme could encourage investment in less efficient and less durable small systems. There has been no modelling of its impacts on the Renewable Energy Certificate Scheme. The Government should consider that rather than just say it is a Federal issue. I support the bill, which is a step in the right direction, but there is a long way to go in relation to limits and investments in other forms of renewable energy. The Tweed has a number of renewable energy or electricity generators that use water from the streams in the area. The Tweed is fortunate compared with other parts of New South Wales because its rainfall is usually significant and the flows of its rivers are strong. The Tweed also has small providers of wind generation. The total picture should be looked at rather than being focused on one area. The longevity of the scheme in New South Wales is seven years compared with 20 years across the border in Queensland. I do not oppose the bill, but more work has to be done.
Ms CLOVER MOORE
(Sydney) [11.06 a.m.]: I strongly support the Electricity Supply Amendment (Solar Bonus Scheme) Bill 2009, which will introduce a gross tariff system to reimburse small users for the renewable energy generated on their property from solar panels and wind turbines at 60¢ per kilowatt hour. I have long called for a gross feed-intariff scheme to promote the market for renewable energy and the development of alternatives to large centralised power stations. According to the Federal Government's "Greenhouse Gas Emissions" December 2008 report, Australia's net greenhouse gas emissions across all sectors totalled 576 million tonnes of carbon dioxide. The energy sector was the largest source of greenhouse gas emissions accounting for 69.6 per cent of emissions, most of which are caused by the production of power. And coal-fired electricity is the dirtiest form of power.
Coal-fired electricity loses approximately 66 per cent of its energy directly to the atmosphere in the form of heat, and further energy is wasted in transmission from distant power stations. I support the call from environment groups for a moratorium on new and expanded coal-fired power and for a long-term plan to phase out coal power as part of our transition to a low carbon economy. Encouraging people to install solar panels and wind turbines in their homes will help manage growing demand for power and reduce dependency on coal. We have an abundance of sun and wind in this country. It is a major embarrassment that we are not the world leader of solar power, that countries like Germany produce more solar energy, despite having considerably less sunshine.
I welcome the gross feed-in tariff system to guarantee people a reasonable price for the renewable energy that they feed back into the grid. A gross system reimburses not only the renewable energy that people give back to the network, which energy retailers on-sell as green power to other customers, but also reimburses people for the pressure they take off the network reducing the need to invest in infrastructure upgrades. There is no question that installing solar panels requires an expensive upfront payment. A gross feed-in system will enable people to pay off their systems, and make the upfront payment more achievable. But it is still an expense and, as such, requires motivation in terms of cutting greenhouse gas emissions.
I was very concerned to learn earlier this year that, under the Federal Government's proposed Carbon Pollution Reduction Scheme, individual actions like installing solar panels would not contribute to Australia's greenhouse gas reductions but instead make more pollution permits available to the big polluting industries. Without recognition of voluntary action in an emissions trading scheme, Australia's emissions target, which currently stands at a weak 5 to 25 per cent depending on international agreements, becomes a cap that we are unable to improve on regardless of what we do. Voluntary actions to reduce emissions must be additional to mandatory targets under the scheme if we are to deliver carbon pollution reductions on the scale needed.
Australians are, shockingly, the highest carbon emitters per capita in the world; we must change our behaviour. We need to change the way we live and work, the energy we use and the way we travel. Many businesses and private citizens have already voluntarily embraced the sustainability agenda. They can see that it makes sense at every level and they are leading governments in making the changes essential for our planet's future. But these efforts must not be in vain. Australian cities, our communities, residents and businesses, must have the option to reduce greenhouse gas emissions.
While I welcome the very recent commitment from the Rudd Government to let household emissions count over and above the target, I understand that emission cuts by councils and businesses will not count. At this stage it is not clear exactly what will count. Councils and businesses are leading the way, and I support the Total Environment Centre's proposal that the Carbon Pollution Reduction Scheme be amended to ensure that permits are retired for every tonne of abatement caused by all voluntary action. At the City of Sydney we have committed to 70 per cent emissions reduction on 2006 levels by 2030, not because we think it can be easily achieved—indeed we are taking incredible steps to achieve it—but because the best available research shows us that this is the scale of change needed to avert irreversible climate change.
When the City of Sydney became carbon neutral last year we made our substantial purchase of green power—around 2.5 per cent of national sales—with the intention of stimulating demand in a market lacking Federal direction. Under the expanded Renewable Energy Target Scheme and the proposed Carbon Pollution Reduction Scheme, the City of Sydney's use of green power may not make a difference to Australia's total emissions. To remain carbon neutral the City of Sydney recently tendered again for the provision of green power. We have stipulated that renewable energy certificates must be retired in 2010, so the Australian Government will have to subtract our purchase when setting its future emissions targets.
If the renewable energy feed-in tariff proposed is to successfully reduce our greenhouse gas emissions, we must ensure that when people install renewable energy generators in their homes and businesses the reduction in greenhouse gas emissions does not just help big polluting industries to pollute more. I call on the State Government and the Opposition to put pressure on their colleagues in Canberra to make voluntary action by everyone in the community—including businesses, councils and the State Government—contribute over and above Australia's proposed weak greenhouse gas emission targets.
Mr DARYL MAGUIRE
(Wagga Wagga) [11.12 a.m.]: I do not want to delay the progress of the Electricity Supply Amendment (Solar Bonus Scheme) Bill 2009, nor do I want to revisit the very important points that have been made in relation to it, but I must highlight an issue that was raised with me on a recent visit to a school in my electorate: solar tariffs and credits that can be obtained under the bill. The bill provides that 10 kilowatt hours is the limit at 60¢ per kilowatt hour. The member for Pittwater remarked that his local school had embraced solar technology. I truly believe that solar technology is part of the solution to our energy needs, along with peak-load gas generators, which have half the carbon emissions of coal-fired power stations. There are many opportunities to reduce carbon emissions, and in the long term that will be achieved, but in the meantime schools are being encouraged through various programs to invest in solar energy and return that energy generated to the network.
I draw to the attention of the Minister and his staff, who constructed the bill and are responsible for its passage, that Talbingo Public School has been leading the way in our region in environmental studies. All the schools in the region are brought to Talbingo to use its environmental centre. The school has embraced solar power and put in place water reticulation—all the things that we understand are important in addressing the environment. But it was pointed out to me that the school is unable to receive credits for the solar panels installed on its roof, which are generating energy for the network. I would like the Parliamentary Secretary or the Minister to comment on this because it is very important. I understand that the reason is that schools purchase their energy through one energy supplier under competition regulation conditions.
This means that the New South Wales Government negotiates with a provider of energy—AGL, Country Energy, or one of the other entities that provide power or gas. I understand that the networks to which the schools are connected are managed or owned by one or other of those entities. It has been suggested to me that because the State Government purchased its energy in bulk from one supplier and feeds its energy back into the network—a Country Energy network—they are unable to negotiate a benefit or payment for the energy that they produce through solar power. Therefore all schools that are out of the AGL distribution network are unable to get a credit for the energy that they produce.
Should it be correct, it is an issue that needs to be addressed and should have been addressed long ago. The new principal, who came to the school in recent times, is still trying to get to the bottom of some of the arrangements that have been put in place. Some 2,000-plus great schools in New South Wales—public schools and private schools—are embracing environmental teachings that are encouraging our next generation of citizens and leaders to be wise about the consumption of energy and precious resources and everything else that we do. The Government must step up and resolve what may be a problem. If what has been suggested to me is correct, those schools are missing out on benefits that could be reinvested in their school. Producing up to 10 kilowatt hours may not return a huge amount of money, but it is money that is valuable to schools that are forever scraping money together to try to provide vital resources to educate future generations.
Talbingo leads the way. It is an example that can be followed, as the member for Pittwater said about his school trying to be the world's first. Talbingo is a very small school. In fact Talbingo was a Snowy Mountains town when the Snowy Mountains system was created in the electorate of Wagga Wagga and the shire of Tumut, not far from the famous Tumut power station and Blowering Dam. It is understandable that its school students have a very strong sense of environmental responsibility and have taken the program on with gusto. I would like to see them encouraged. If this can be resolved or if the Parliamentary Secretary could make a statement to that effect I am sure the school would appreciate it, as would all schools in New South Wales—and so would I.
Mr PETER BESSELING
(Port Macquarie) [11.18 a.m.]: I support the Electricity Supply Amendment (Solar Bonus Scheme) Bill 2009. There are a lot of positives in moving forward with a gross feed-in tariff. It is good to see that the Government has taken on board many submissions from around the State regarding the feed-in tariff. We have seen it consider a net feed-in tariff and a gross feed-in tariff. The previous announcements regarding the net feed-in tariff were well received in my area, given that most people are aware that they need to participate actively in considering renewable energy resources and trying to reduce carbon emissions and greenhouse gases.
We want to encourage a greater uptake from not only individuals but also businesses and communities who can perhaps get together and look at some form of system that is similar to our sewerage system, whereby a centralised system services a lot of small communities. That would be a more efficient way of providing for solar electricity and it should be looked at, particularly with regard to any new developments that may be on the drawing board. It would be of benefit to those communities if they could feed into a communal solar panel system. One of the issues in our area recently was the diesel-fired peaking power plant that was proposed for Herons Creek, which was thankfully knocked on the head. An outcome of that was a greater consideration of how electricity will be provided for our area, given that it is a sensitive area and people move there for the natural beauty of the place. Solar thermal systems were one of the opportunities that were thrown up. I am a big fan of solar thermal because it can produce good peak loads. It should be firmly under consideration by both the State and Federal Governments when considering the supply of energy needs to communities.
I do not understand why the seven-year time frame was chosen, but I acknowledge the comments of some previous speakers who raised concerns that as we approach the end of that seven-year period it will be more difficult and less encouraging for individuals and communities to make the reasonable capital investment required and get a payback over only a few short years. A larger scheme should be included, as I have already discussed, for communal benefit and communal purposes. One thing that has not been discussed, which was brought to my attention in a number of letters of concern from members of my community, in particular one from Naomi and Alan Callaghan, from Arranbee Road, Wauchope—which is in King Creek and part of my electorate—is the impact on the providers of electricity, Country Energy and the like. We are obviously going to move from a net feed-in tariff to a gross feed-in tariff and the providers have not been able to catch up with supplying the net feed-in tariff and the infrastructure that is needed for it. The Callaghans said:
We have consulted with Country Energy (our energy supplier) and 2 local installers of photo voltaic panels. We have read those parts of the Electricity Supply Amendment (Solar Bonus Scheme) Bill 2009 available to us and read the NSW Solar Bonus Scheme – frequently asked questions.
If the scheme is to start on the 1st January 2010 (as per answers to faq) what arrangements are in place for "gross" metering to be installed. Country Energy as late as 23rd November 2009 say they are not equipped to handle such installations. They are currently approximately 5 months behind in installing all "net" metering systems currently to be serviced for start-up. If these have to be eventually changed to "gross" metering, as well as those currently installed with "net" metering, the backlog will blow out exacerbated by the fact that Country E. say they have insufficient trained staff. Country E. say the government will not permit the employment of extra staff to perform this work.
If there is a backlog as a result of the net feed-in tariff, we need to make sure we can move forward with this new gross tariff and that the employees are in place to deal with that. The infrastructure has to be in place to get the true benefit of this scheme and encourage people to take it up. We all have a responsibility to move forward with more efficient electricity consumption in our households and I support this bill as part of the measures in progressing towards that.
Mr PAUL PEARCE
(Coogee) [11.24 a.m.]: I will speak briefly to the Electricity Supply Amendment (Solar Bonus Scheme) Bill 2009 and will not repeat the comments of previous members. I support this bill absolutely and compliment the Government on going down the path of a gross feed-in tariff. Like other members who have spoken, I have a query in my mind as to whether the seven-year time frame is an adequate payback period. However, the most important thing is to establish the gross feed-in tariff as a principle to encourage the take-up of self-generation of power, particularly through the household sector and smaller community-based groups. The member for Tweed referred to the Queensland model comparatively favourably. I point out that the Queensland model has the same cap, 10 kilowatts, and the rate proposed is 44c, compared with New South Wales' rate, which is 60¢.
Mr Geoff Provest:
How long is it?
Mr PAUL PEARCE:
It is a 20-year period, but it is a lower rate of return and I think the calculation has been made between the two as to whether the payback period sits accordingly. My local surf club at Bronte is looking at options to generate into the grid and power the surf club, such as a combination of photovoltaics and wind power. This approach of a gross feed-in tariff will improve the economics of what they are proposing to do. The member for Sydney referred to aspects of the emissions trading scheme. I am pleased to see that the Rudd Government will probably be able to achieve an emissions trading scheme, although I believe a carbon tax is a better option than some market-based mechanism.
We have to consider the most effective method of improving photovoltaics and encouraging their take-up, which is essentially what we are dealing with here; there will not be too many people with geothermal or wave power on their property. Wind is an option, although some of the small wind generators are more of a boutique item rather than a genuine generation process. We are essentially looking at photovoltaics and solar energy. The adoption of a gross feed-in tariff by the German Government in the early 1990s gave an enormous boost to solar power generation and has put Germany on course to achieve a significant improvement in renewable energy production. We are talking about a country in northern Europe where they do not have anything like the sunlight we have here, although modern photovoltaics operate on light effectively; they do not need just the sunlight.
The bill contains certain definitional issues in relation to proposed section 15A as to the type of generator. However, I think this is an excellent piece of legislation. I know the Opposition from time to time is critical of the New South Wales Government, but I draw to its attention the comparison nationally of the various schemes. Victoria and South Australia have net feed-in models; the Australian Capital Territory has a fairly complex gross feed-in model, varying the rate of feed-in depending on the kilowatts produced; Tasmania has a net feed-in model, the details of which are unclear, but it is a fairly low rate of return—about 20¢ per kilowatt; the Northern Territory has a net model, at about 23¢ per kilowatt; Western Australia is talking about a net model, but I have been unable to ascertain the details, and that may change with the election of a conservative Government there; Queensland, as I have said, has a net model at 44¢; and New South Wales has a gross model at 60¢ per kilowatt, up to 10 kilowatts.
This means the New South Wales scheme is far and away the most generous scheme in the country and will clearly give the greatest boost to the solar industry that is possible and achievable. Many members have put forward suggestions as to how emissions trading will fit into the overall scheme. Once the Senate agrees to the scheme—I am assuming that it will be passed—we will work through its details. This scheme will contribute significantly to the broader issue of reducing the carbon footprint for which we are all responsible. I commend the Government for introducing this bill and I give it my full support.
Mr THOMAS GEORGE
(Lismore) [11.30 a.m.]: I speak briefly in debate on the Electricity Supply Amendment (Solar Bonus Scheme) Bill 2009, the purpose of which is to establish a gross feed-in tariff that lasts for seven years for small-scale solar photovoltaic panels and wind turbines commencing on 1 January 2009. The scheme will pay 60¢ per kilowatt hour for all electricity generated by systems of up to 10 kilowatts by residential, small business and community groups. It will increase the uptake of small-scale renewable energy in the community. This policy, which is geared towards a short-term uptake by residential users, can provide unprecedented payback periods of as little as three years for some customers.
The Government should focus on longer-term industry development with larger systems and staggered reductions in tariffs to encourage a long-term, competitive renewable sector. I am sure that all members of Parliament support the generation of renewable energy. The Government's tariff is fixed at seven years. Anyone joining in the seventh year will receive one year of the gross feed-in tariff, which is set at 60¢. The Liberal-Nationals Coalition would prefer that tariff to reduce annually by 5 per cent to encourage greater efficiencies and cost savings in the industry. The scheme, which is capped at systems of 10 kilowatts, allows only residential and community groups and small business with an energy use of up to 160 kilowatts an hour per annum to access it. The Government has one tariff for all eligible systems. There will be increase from $1.90 to $7.47 per annum in household bills as a result of this low to high uptake.
The Liberals-Nationals Coalition supports the introduction of a gross feed-in tariff. As I said earlier, this scheme will increase the amount of solar photovoltaic installed in New South Wales, which should provide significant incentives to households, community groups and small businesses. Industry acknowledges the rushed nature of this scheme and its resultant problems. However, it prefers to have a scheme rather than having no scheme at all. People to whom I have spoken favour a modification of the scheme in the future rather than expressing opposition to it now. The inbuilt review period will allow for modifications to be made in light of the performance of the scheme. Some parts of the solar industry fear that the scheme will result in a boom and bust as the tariff enters its final year.
I have had discussions with Simon Thomas of Sunsparks Electrics at Kyogle who said that a gross feed-in tariff was the way to go. He asked me to encourage the Government to legislate for 15 years, as that would ensure that systems were implemented across the country, which would be good for farmers and for other people in rural areas. Simon told me that he could install a 9.8-kilowatt system on a farmer's shed for about $37,000 after GST and after renewable energy certificates had been taken into account. These systems could be installed at a lesser amount if those farmers ordered one before the end of the year, as they could take advantage of the investment allowance. Based on the gross feed-in tariff these systems will earn about $9,000 per annum and will involve very little maintenance.
Simon said this was a fantastic opportunity for people in the country and for the wider Australian community to access renewable energy without the Government investing in infrastructure. Industry believes there is great scope for renewable energy to be accessed by community groups and farmers in regional areas. However, the scheme should be extended to 15 years to provide further encouragement for them to take it up. Simon is a great advocate of renewable energy. I received an email from, and my office has had discussions with, the Rainbow Power Company Ltd based at Nimbin—a great organisation that is a leader in this field. When it heard about the introduction of this bill it expressed concern and said:
1) You will no doubt recall the government's promise to start a net Feed In Tariff (FIT) on 1 Jan 2010. With the scrapping of rebates by the federal government this initiative is very important to our industry. As I have heard nothing further, I was wondering if you can confirm if the necessary legislation has been passed by Parliament. If not, will it happen on time and is it being supported by the Coalition.
2) The government is also reviewing whether to allow solar farms to proceed as in other states. This is also very important—
especially in regional areas of New South Wales—
in fact a local one funded by the federal government is at risk of not proceeding because of the lack of progress on this matter by the State government. We ask you to use your good offices to ensure that this matter is resolved quickly and that solar farms at least up to 30 kW should be approved.
Industry is telling this Government what it needs to do. It must support companies such as Rainbow Power Company Ltd and Sunsparks Electrics, which are working with people at the grass roots—with householders, industry and country businesses. Their ideas should not be ignored. This State Government should heed the suggestions put forward by David Lamb of the Rainbow Power Company Ltd to work with the Federal Government. Many farms in regional areas could take up this offer and supply a lot more renewable energy. The Opposition does not oppose the bill.
Mr GRANT McBRIDE
(The Entrance) [11.38 a.m.]: The Electricity Supply Amendment (Solar Bonus Scheme) Bill 2009, which is important legislation, is part of a bigger agenda to mitigate or reduce electricity consumption by every individual across the whole of New South Wales. The solar bonus scheme has three objectives: to support those who want to generate renewable energy in response to climate change, to develop jobs in the renewable energy sector by assisting renewable energy generation to compete with non-renewable energy generation, and to increase public exposure to renewable energy technology to encourage the community to respond to climate change.
Opposition members who contributed to debate on this bill neglected to emphasise the importance of this legislation, which will increase public exposure to renewable energy technology and encourage the community to respond to climate change—objectives that are set out in the bill. This legislation is part of a raft of legislation that is being discussed, and implemented, by the Federal Parliament. The agreement in principle speech also stated:
To ensure that the introduction of the scheme is as streamlined as possible for both consumers and businesses, the design of the solar bonus scheme was developed following a rigorous consultation process.
That has been the Opposition's debate. A rigorous consultation process preceded the development of the legislation. The speech continued:
That process included a dialogue with the community and industry, including the appointment of a task force, which considered public submissions, investigated a range of options and their impact on consumers, and prepared a detailed public report.
What more can be done in developing policy? We set out the objectives, we undertook community consultation and we also set up a task force that talked to businesses, consumers and all participants. I am disappointed that all Opposition members can talk about are minor things covered by regulation.
The member for Pittwater said that most of the provisions in the bill would be dealt with by regulation, but he would like it included in the bill today. That is not the way it works. The process is that legislation is passed by both Houses of Parliament and the regulations are developed later as part of the process. Those regulations must be tabled in the Parliament and sit on the table for two weeks before they can be debated. It must disappoint everyone in this place to listen to comments about regulations that do not exist, but will in the future. Dare I say, the Opposition is just playing petty politics by not recognising or acknowledging that the Government went through a thorough process to develop this legislation with a long-term commitment to reduction of energy consumption in this State.
Mr WAYNE MERTON
(Baulkham Hills) [11.41 a.m.]: The purpose of the Electricity Supply Amendment (Solar Bonus Scheme) Bill 2009 is to establish a gross feed-in tariff lasting seven years for small-scale solar panels and wind turbines commencing 1 January 2009. The scheme will pay 60¢ per kilowatt hour for all electricity generated by systems of up to 10 kilowatts by residential, small business and community groups. The scheme will increase the uptake of small-scale renewable energy in the community. The solar bonus scheme obliges energy retailers to purchase electricity generated by solar photovoltaic of up to 10 kilowatts at a premium rate of 60¢. This increases the attractiveness of investment in renewable energy by reducing the time it takes to pay off a system. On 23 June 2009 the Government adopted a net feed-in tariff, which pays only for additional electricity fed into the grid after household consumption. This was in contrast to the Coalition's position, adopted by shadow Cabinet, for a gross feed-in tariff.
The Government was criticised by the renewable sector, the property sector and the environment movement for supporting a net feed-in tariff. This bill copies the Coalition's support of a gross feed-in tariff. Feed-in tariffs exist in around 50 countries and in most Australian States and Territories. Many members have spoken about the merits of the scheme. As I have said, the Opposition supports the scheme, but I should like to address a couple of issues. The first is that the scheme is for a fixed duration of seven years. My concern is that if someone joins in the seventh year, they will receive only one year's benefit from the gross feed-in tariff. The Coalition preferred all participants to have a set number of years to ensure that phase-out avoids a boom and bust that excessive early incentives could create. The home insulation industry recently displayed evidence of a boom and bust mentality.
The solar energy industry is well structured with experienced operators, people with great traditions and history. The last thing we want is to have cowboys entering the industry in the dying days of this seven-year period causing tragic circumstances for the industry. The Government's tariff is set at 60¢. The Opposition preferred a tariff that reduced annually, for example, by 5 per cent per annum, to encourage greater efficiencies and cost savings in the industry. Of some little concern is that eligibility for the tariff is capped at systems of 10 kilowatts and only allows access to residential, community groups and small businesses with energy use up 160 kilowatts per hour per annum. The Coalition has preferred the inclusion of larger businesses and systems within the scheme. The Government provides for one tariff for all eligible systems. I shall not take up the time of the House as I acknowledge the limited time available for this debate. The Opposition supports this bill, but a number of issues raised by other Coalition members should be addressed. I have enunciated my concerns about the fixed seven-year period. With those comments, I conclude my observations.
Pursuant to standing orders business interrupted and set down as an order of the day for a future day.