The ATA was closely involved in the policy process that lead to the development of the initial NSW gross FiT for solar generation.
Whilst many of the design features of the previous scheme were sound, the economics of the 2010 FiT policy were based on installed PV costs and the subsequent payback incentives relevant to the time period when the policy was developed – i.e. 2008/9. Installed costs around this time were of the order of $10 – $12 a watt (pre-Renewable Energy Certificate [REC] incentive).
In 2010, global silicon prices halved and significant economies of scale in global manufacturing began to flow through the supply chain – virtually halving the installed cost of a PV system in Australia in less than 12 months. No one could have foreseen the magnitude of the price drop in 2011 and the significant impact it would have on the NSW PV market.
This, and the overinvestment that occurred in solar PV in NSW during 2010 and in early 2011, is not a justification for removing or undervaluing electricity generated by distributed solar into the future.