SOLAR FEED-IN TARIFFS

Adjourned debate on motion of Hon. M.C. Parnell:

That this council—

1. Notes that in 2011 the Legislative Council passed amendments to the Electricity Act 1996 that restricted the ability of household and small generators to generate revenue from the SA Solar feed-in scheme by restricting payments to the first 45 kWh of electricity fed into the network each day;

2. Condemns the attempt by ETSA Utilities to retrospectively reduce the number of participants in the SA Solar Feed-in Scheme through the use of new, additional guidelines developed and made known to participants in the solar feed-in scheme only after participants had already made significant investments in solar energy infrastructure; and

3. Calls on the government to ensure that the additional guidelines developed by ETSA Utilities (namely a restriction on households with greater than 3.04 kW Systems installed on meters that record less than 400 kWh of electricity per year) are no longer used to limit the eligibility of households and small generators to participate in the scheme.

(Continued from 29 February 2012.)

The Hon. G.A. KANDELAARS (17:48): Before I begin, I must mention that I have a pecuniary interest in this matter; namely, I have a grid-connected solar power system on the roof of my home, but it will be of no surprise that the government opposes this motion. Honourable members will recall that parliament made amendments to the solar feed-in scheme last year that closed the 44 kilowatt-hour feed-in tariff to new entrants at midnight on 30 September 2011.

The amendments also applied limitations to solar systems approved from September 2010, in that the feed-in tariff is limited to only one generator per customer, limited to the first 45 kilowatt hours per day exported to the grid and excludes solar systems, in the opinion of ETSA Utilities, that are installed for the dominant purpose of feed-in to the grid.

The amendments achieve the aim of upholding the original intent of the solar feed-in scheme and limit the cost impact on all electricity customers at large. I remind the council that the government, in introducing the solar feed-in scheme, made clear its intent to have a feed-in tariff paid on the energy returned to the electricity grid after supplying the solar customer's own consumption needs at any point in time.

The government is pleased that the solar feed-in scheme has been very successful. The council would be interested to know that advice from ETSA Utilities reports that there are now over 115,000 South Australian residences and businesses with approval to install a solar system, with almost 93,000 solar systems installed. Since the scheme's inception, rooftop solar power has become a widely accepted technology in the community. In addition, the industry has grown to become established and has achieved considerable economies of scale in the production of solar systems. The amendments have provided the industry with an appropriate transition away from public support.

After supporting the amendment last year, the Hon. Mr Parnell now wants the government to rely solely on the 45 kilowatt hour per day export limit provision to cap feed-in tariff payments. The government disagrees with this process, as the 45 kilowatt hour per day provision only provides reasonable limits for larger-sized solar systems accessing the feed-in tariff after meeting the householder's consumption requirements at the connection point. It cannot, however, deal with solar systems that are installed for the dominant purpose of feeding in to the grid. Only the amendments to the solar feed-in scheme in their totality achieve parliament's aim.

ETSA Utilities is responsible for implementing the legislation, which excludes solar systems that are installed for the dominant purpose of feeding in to the grid. This requirement is set out in the definition of 'excluded generator' in section 36AC of the Electricity Act 1996. To comply with this obligation, ETSA Utilities established criteria to assist in the identification of solar systems that are installed for the dominant purpose of feeding in to the grid.

Accordingly, ETSA Utilities published guidelines with criteria that identified generators at connection points with system sizes equal to or greater than 3.04 kilowatts and consuming less than 400 kilowatt hours per annum. That is the consumption of less than a 50 watt light globe for a year. Each of the approximately 850 customers contacted by ETSA Utilities pursuant to this provision had consumption levels at the connection point for their solar system that amounted to less than the operation of this 50 watt light bulb.

The government does not consider ETSA Utilities' application of the provision excluding generators that are installed for the dominant purpose of feeding in to the grid to be retrospective. To ensure that customers and the solar industry were aware of the impending amendments, the government's announcement on 31 August was well publicised and included a warning that customers joining the solar feed-in scheme from 1 September 2010 would be subject to the new eligibility criteria, once legislated. Furthermore, the announcement expressly notified customers that generators installed specifically to create a profit from the scheme would be excluded.

I advise the council that the government will not be seeking ETSA Utilities to disregard the criteria it has set to carry out legislative requirements. While the Hon. Mr Parnell may be unconcerned by profiteering from the solar feed-in tariff scheme, the government, on the other hand, is conscious of the cost the scheme has on all electricity consumers. I remind the Hon. Mr Parnell that all electricity consumers fund the solar feed-in scheme through network charges paid as part of their electricity bills.

On a final note, far from condemning ETSA Utilities, the government recognises the effort ETSA Utilities has made in providing options where possible to solar customers to assist them to comply with the requirements of the solar feed-in scheme and retain eligibility for the feed-in tariff. I understand that most of the customers written to have been given an opportunity to rewire or refit their solar systems through another complying connection point on their property to retain the solar feed-in tariff. For these reasons, the government opposes Mr Parnell's motion.

The Hon. D.W. RIDGWAY (Leader of the Opposition) (17:56): I realise that we are very close to the dinner break, but I wish to propose a couple of amendments to the Hon. Mark Parnell's motion. I rise on behalf of the opposition to speak to it. I will move my amendments and then I will seek leave to conclude and then, after the dinner break, we can look at those and allow the Hon. Mark Parnell—

The Hon. M. PARNELL: Are they circulated?

The Hon. D.W. RIDGWAY: They will be shortly; I have given them to the Clerk. They are very minor but I wish to speak to them: Premier Mike Rann announced on 31 August 2010 that the government would be making significant changes to the solar feed-in scheme and that one of these changes would be aimed at weeding out those who had installed photovoltaic systems with the sole intention of making money. Subsequently, when the Electricity (Miscellaneous) Amendment Bill 2011 was introduced, it obliged ETSA to establish the dominant purpose criteria for photovoltaic systems. These criteria were aimed at determining whether a solar system had been installed for the dominant purpose of making a profit.

In speaking about these criteria, the minister stated that they would be aimed at preventing people from installing large solar systems which were not being used as an energy source but simply used to feed electricity back into the grid in paddocks. The government and ETSA did not come together to determine this final criteria until the final day of the scheme on 30 September 2011. The criterion was set out for systems of 3.04 kilowatts or greater. A minimum number of 400 kilowatts of electricity would have to be consumed at the meter that the solar panels were installed upon to be eligible to receive the feed-in tariff. This criterion was applied retrospectively when the electricity use at the installed photovoltaic site was measured for the 12 months prior to the installation.

This has caused many constituents, mainly farmers, to be caught out by this criterion, and they now find themselves in a position where they will not be receiving the feed-in tariff. The majority of these constituents were told by their solar providers to put the systems on their sheds because it was a better position for their panels and would maximise the benefits of the scheme. It should be noted that in previous times farmers were required to have a separate meter for their sheds as the charge for rural power was different from that for domestic power.

It has been the opposition's contention that since this dominant purpose criteria was announced there was already a measure in legislation that prevented profiteering. This was a 45-kilowatt cap per day on the amount of electricity that is fed back into the grid and that the feed-in tariff can be received upon. My colleague in another place the shadow minister, Mitch Williams, has said this publicly and has urged the minister in numerous letters to remove the dominant purpose criterion and leave the 45-kilowatt cap as a measure to prevent profiteering.

Therefore, I indicate that the opposition will be supporting part 1 of the Hon. Mark Parnell's motion but will be moving to amend the other two parts of this motion. While ETSA is enforcing the dominant purpose criterion, it was the government that developed it and we believe the motion needs to be amended to reflect this. I indicate that we are supporting the first of the three points in the Hon. Mark Parnell's motion but not the second point. I will read these amendments out and then I will seek leave to conclude and I hope the Clerk will be able to circulate them over the dinner break.

The second point is that the council condemns the attempt by the state government to oblige ETSA to retrospectively reduce the number of participants in the South Australian solar feed-in scheme through the use of new, additional guidelines developed and made known to participants in the solar feed-in scheme only after participants had already made significant investments in solar energy infrastructure.

The third point calls on the government to ensure that the additional guidelines developed by the state government and enforced by ETSA Utilities (namely a restriction on households with greater than 3.04 kilowatt systems installed on meters that record less than 400 kilowatt hours of electricity per year) are no longer used to limit the eligibility of households and small generators to participate in the scheme. With those words—

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): Are you moving those amendments?

The Hon. D.W. RIDGWAY: I have not moved them; I have just foreshadowed them, but I now seek leave to conclude my remarks.

Leave granted; debate adjourned.

[Sitting suspended from 18:00 to 19:48]

The Hon. D.W. RIDGWAY: I move:

Leave out paragraphs 1 and 2 and insert the following:

2. Condemns the attempt of the state government to oblige ETSA to retrospectively reduce the number of participants in the SA Solar Feed-in Scheme through the use of new, additional guidelines developed and made known to participants in the solar feed-in scheme only after participants had already made significant investments in solar energy infrastructure; and

3. Calls on the government to ensure that the additional guidelines developed by the state government and enforced by ETSA (namely, a restriction on households with greater than 3.04 kilowatt systems installed on meters that record less than 400 kilowatt hours of electricity per year) are no longer used to limit the eligibility of households and small generators to participate in the scheme.

I foreshadowed this amendment and made members aware of the wording. It has been circulated now. It is a very simple amendment, and that is to put the onus back on the government. The Hon. Mark Parnell was saying that it was all ETSA's fault. In the opposition's view, it is the government's fault. If members would like to look at the motion or the Notice Paper, they will note that I am moving an amendment to replace paragraphs 2 and 3. They are exactly the same, except instead of saying 'condemns the attempts by ETSA' it says 'condemns the attempts by the state government to oblige ETSA'. That is in the wording in the second point.

In the third point, it starts off saying, 'Calls on the government to ensure that the additional guidelines developed by ETSA'. The new amendment says, 'Calls on the government to ensure that the additional guidelines developed by the state government and enforced by ETSA'. So, it is a very minor amendment, but we do not think that the blame should be sheeted down at ETSA. ETSA is certainly enforcing it, but it is a government initiative. It really is a very minor amendment. I am happy to support the Hon. Mark Parnell's motion, but we do think that it is the government, rather than ETSA, that should be held to account.

The Hon. M. PARNELL (19:50): In summing up, I would like to thank the Hon. Gerry Kandelaars and the Hon. David Ridgway for their contributions. I have a few brief observations about both of those contributions. The Hon. Mr Kandelaars said that the changes were not retrospective. I beg to differ. His argument in relation to retrospectivity is that, if the Premier says something in a press release and then it comes to pass in legislation, that means that it is not retrospective. Well, I beg to differ. I do not think we are at the stage yet of legislating in this state by media release or by Premier's announcements. We legislate through legislation. It is a retrospective change, and this motion calls on the government to back away from it.

The Hon. Gerry Kandelaars uses a word that you often hear from the government when this matter is being discussed, that is, 'profiteering', this notion that it is dirty and unacceptable for people to do anything other than make a loss when it comes to something good like renewable energy. Yet, if a coal-fired or gas-fired power station ran its business by making a loss then it would be a complete disaster and it would go out of business. No-one is suggesting that carbon-emitting fossil fuels will or should do anything other than operate at a profit.

I do not accept that this is a case of profiteering. The people with solar panels are making—let us name it for what it is—peanuts, because we already have the maximum size of the scheme which ensures that no-one is making a whole lot of money out of this scheme. The people who are making more than they are spending in electricity are, in effect, paying off their private investment, and for many of them it will take many years. So, I am not surprised that the government is not accepting this motion.

The Hon. David Ridgway had a very sensible contribution. If there is a doctor in the house I think the Hon. David Ridgway is in need of a heart starter. The Hon. David Ridgway has put forward some amendments, which basically seek to sheet home the responsibility for this mess to the government rather than blaming ETSA Utilities. My view is that both parties are to blame, but I am certainly not going to quibble with the honourable member's amendment.

Certainly, the government should be in our sights first and foremost, so therefore I find the amendment acceptable, although I think that ETSA Utilities, that foreign-owned corporation based in the Caribbean, its role is not without blemish, It is effectively working in cahoots with the government to set retrospective rules that make it tough on people who are seeking to do the right thing by the climate through installing renewable energy.

The one other thing I wanted to say very quickly is that whilst this motion refers to the attack on those people, many of them farmers who have put solar panels on their sheds, for example, where the metered use of electricity is very low, I am very sad to say, but I have to tell the council this: ETSA is at it again. There is a new crusade on the horizon where it has a whole new cohort of people it wants to attack and scrub off the solar feed-in scheme.

I refer members to the Industry News put out by ETSA Utilities which just came out a week or so ago. What ETSA Utilities say in this is that they are going to be reviewing their records and contacting customers where they believe that a customer is receiving a feed-in tariff for a generator that does not meet the criteria of being a sole connected generator. In other words, they are now looking to target people who they say have second generators and they are going to make sure that they get off from the scheme.

The problem with this approach is that it flies in the face of what a lot of people have been trying to do—in particular, people such as those in local councils where they have sought to have multiple connections with solar panels. Local councils might have solar panels on the community centre, the library, they might even have them on the public toilets. Yet, ETSA is now out on this crusade trying to make sure that no single customer has more than one connection.

What they would probably be targeting is people who have panels on their house and then panels on their holiday house. But the problem with ETSA Utilities' approach is that they do not really have a detailed understanding of who out there are the owners of properties, the proprietors of properties and people who control the utility bills in those properties.

To give an example, a member in another place Mr Dan van Holst Pellekaan, in debating this bill last year, pointed out a constituent of his who had a number of bed and breakfast accommodations, and each of those B&Bs had solar panels but each of the B&Bs was actually technically owned by a different entity. For example, you could have Holiday House Pty Ltd No. 1, No. 2, No. 3—so, technically separate companies—and, even though they might all be in common ownership in terms of the people behind the company, they might be entitled to get a feed-in tariff for each of those places.

Yet, if someone is unfortunate enough to have two properties—maybe it is a primary house, maybe it is a rental house as well—and if they are in the same name, say, Mr and Mrs Smith, they are going to be chopped off the scheme for their second solar system. But if Mr Smith has the house and Mrs Smith has the rental place or the holiday place, then presumably they will not be cut off because they will be in different names.

It is completely arbitrary, and it is harking back to issues that no-one thought about when these arrangements were put in place. It is similar with people who are perhaps a husband and wife who own a property but the electricity bill might just randomly be in one name or the other depending on who happened to be around to sign the forms when the electricity was being connected. At my place, I am pretty sure our electricity bill is in my wife's name because I think she was the one who signed the forms when we moved in. The solar panels: I signed those forms. There was no cross-checking. ETSA Utilities really have no idea and they should butt out.

That is not strictly the subject of this motion but I thought I would raise it now rather than introduce a separate motion to deal with it separately. I thought I would mention it now because ETSA Utilities is at it again. They have this antipathy towards solar power—and when I say ETSA Utilities I include the state government in that—and they are chasing peanuts. They are chasing people who have tried to do the right thing. The amounts involved are very small and here they are making their life a misery.

With that, I accept the amendment moved by the Hon. David Ridgway. I fully expect that we have the numbers in the Legislative Council today to call on the government to back away from their crusade against solar panel owners and I recommend the motion to the house.

The CHAIR: I'm astonished that people are going to deal with this amendment, just having received it, but that is okay I suppose.

Members interjecting:

The CHAIR: The government has been very tolerant.

Members interjecting:

The CHAIR: Order!

Amendment carried; motion as amended carried.