Hundreds of solar panel buyers and installers may join a class-action lawsuit against the New South Wales Government if a solution cannot be reached over its plan to reduce feed-in tariffs, various industry members have warned.
The move comes after both the New South Wales and Western Australia Governments have taken steps in the past few months to reduce the amount of assistance provided to solar installers. Protestors have organised demonstrations in Sydney to oppose the cuts.
The previous Labor Government in NSW had cut the feed-in tariff from 60c per kilowatt hour to just 40c, but said this lower rate would only apply to new solar panel installations.
However, the new Coalition Government now says the lower tariff will apply to all installations, not just new ones.
Sydney legal firm Neville and Hourn is reportedly organising the class-action on behalf of 1,000 complainants, and is set to launch if the Government fulfils its promise.
The firm was contacted by SmartCompany this morning but no reply was received before publication.
Proponents argue the Government lured installers into the scheme based on this tariff, and to reduce it would rob them of money promised several months ago.
The Australian Solar Energy Society has met with the Government to discuss the proposed tariff cut, providing its own plan for fixing a budget shortfall that Premier Barry O’Farrell is using as justification for the tariff reduction.
Chief executive John Grimes argues the Government could save $455 million by charging energy retailers such as TRUenergy and Origin for taking the energy produced by solar panels that feed back into the general grid.
“They need to get the retailers to actually pay for that solar being produced, there is over $400 million of it being produced and currently those retailers have access to it free of charge. This would solve the budget problem.”
But the energy retailer industry disputes this, with Energy Retailers Association of Australia chief executive Cameron O’Reilly saying in a statement that retailers already pay a premium for solar electricity and more than half the retail price is due to network costs and other charges.
“If our members were required to pay the retail price for rooftop solar electricity, in effect a subsidy of around 14 cents a kilowatt, it would make every household in NSW with solar panels sub-economic to all retailers,” he said.
But Grimes says it will be meeting with the opposition and cross-benchers today to discuss a solution. If none can be found, legal action may be taken.
“We think we can solve this. Tearing up contracts is unconscionable and a matter of principle. People entered into these contracts with the Government in good faith, and they can’t just tear them up.”
“We’re trying to solve this politically, and we’ll see which way they jump.”
While Grimes says he would prefer to solve the issue today, the organisation is still receiving legal advice.
“We’re taking legal advice. I think it won’t come to litigation, but after today we’ll just have to see which way it goes… we are receiving advice.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
