The Solar Bonus Scheme (the Scheme) is primarily funded by the Climate Change Fund External link icon which draws most of its resources from electricity distributors. The distributors then recover these costs from electricity customers through electricity bills.

In March 2012, the Independent Pricing and Regulatory Tribunal (IPART) released a report that found energy retailers received a financial gain from solar customers. Based on this finding, IPART recommended that retailers make a contribution to the Scheme tariffs.

The NSW Government implemented this recommendation and since 1 July 2012 retailers have been required to contribute to the tariff paid to Scheme customers. The value of this contribution is determined by IPART and is reviewed annually. IPART has determined retailers should contribute 6.1 cents per kilowatt hour from 1 July 2016 until the Scheme ends on 31 December 2016.

More information about IPART's determination is available on the IPART website External link icon.

The Scheme rate is not changed by the retailer contribution. Scheme customers will continue to receive the Scheme feed-in tariff rate of 60 or 20 cents per kilowatt hour.

The retailer contribution ensures retailers make a contribution towards the costs of the Scheme, helping to reduce future NSW electricity price increases by reducing the amount of the Scheme costs that have to be recovered from electricity customers.

Reviews of the Solar Bonus Scheme

2014 Solar Bonus Scheme Statutory Review

Under the Electricity Supply Act 1995 (Sect 195), the Minister is required to “review the solar bonus scheme (being the scheme for the payment of electricity supplied to the network by small retail customers using complying generators) to determine whether the policy objectives of the scheme remain valid and whether the terms of the Act remain appropriate for securing those objectives.”

Read more in the 2014 Solar Bonus Scheme Statutory Review Report PDF [2,639 KB].

2011 Auditor General Review of the Solar Bonus Scheme

In 2011, the Auditor General reviewed the Scheme and reported to Parliament on his review Link.

2011 Solar Summit and Solar and Renewable Energy Summit

The NSW Government held a series of summits in 2011 to develop a set of agreed actions to manage the Scheme's costs and ensure the further development of renewable energy in NSW.

The first stage of this was the Solar Summit which was held on 6 May 2011 and focused on the costs of the Scheme. The second stage of this, the Solar and Renewable Energy Summit, was held in Newcastle on 1 July 2011 and discussed options to establish a sustainable future for the NSW solar industry.

Based on the outcomes of the summits, the NSW Government:

  • requested IPART to investigate and report on options for a fair and reasonable price for solar energy that is generated and fed back into the grid
  • amended the Electricity Supply Act 1995 to require retailers to contribute to the cost of the Solar Bonus Scheme
  • commenced work on developing a Renewable Energy Action Plan.

2010 Solar Bonus Scheme Statutory Review

The Electricity Supply Act 1995 required the Minister for Resource and Energy to review the Scheme in 2012 or when capacity reached 50 megawatts, whichever occurred first. The Scheme reached the 50 megawatt level in mid 2010. A review was subsequently completed and public submissions were invited as part of the review.

The review assessed whether the policy objectives of the Scheme were still valid and whether the terms of the Electricity Supply Act 1995 were still appropriate for securing those objectives. These objectives were and are to:

  • encourage and support persons who want to generate renewable energy as a response to climate change
  • develop jobs in the renewable energy sector by assisting renewable energy generation to compete with non-renewable energy generation
  • increase public exposure to renewable energy technology in order to encourage the whole community to respond to climate change.

Over 250 submissions were received, informing the development of review recommendations. Read more in the 2010 Solar Bonus Scheme Statutory Review Report PDF [714 KB].

In response to these recommendations the NSW Government reduced the Scheme tariff from 60 cents to 20 cents for new customers entering the Scheme

Useful links

Additional background information, analysis and reports on the Solar Bonus Scheme can be found in the documents and links below: