Article by Adam Bennett, Sydney Morning Herald

NSW Premier Barry O'Farrell has smoothed the way for a backdown on his unpopular plan to slash solar feed-in tariffs, saying he will consider alternative proposals as long as the $759 million shortfall is met.

Mr O'Farrell on Monday showed a willingness to amend his plan to retrospectively slash solar tariffs, and take on board suggestions from the solar industry, his own MPs and crossbenchers.

However, he said, he would only move so far on the Solar Bonus Scheme, declaring its multi-million dollar 'blowout has to be paid for'.

On the eve of Tuesday’s coalition party room meeting – where MPs are expected to vent their anger at the rebate plan – Mr O'Farrell said “all things are on the table” except the need to meet the $759 million shortfall.

'I'm happy to consider whatever proposals are put forward. But it has to fill the funding shortfall that Labor left,' Mr O'Farrell told reporters in Sydney on Monday.

'We're happy to continue to have discussions with whoever, providing, at the end of the day, it ensures that the blowout in the cost has been met.'

'There is no half answer here … It has to be paid for.'

Since announcing his proposal to cut the tariff from 60 cents per kWh to 40 cents, Mr O'Farrell has faced angry opposition from the industry, consumers and his own MPs.

The government has said the measure would save $471 million, but consumers who borrowed heavily to pay for the panels have said they won’t be able to recoup their investments.

Coalition MPs across the state have been flooded with complaints from angry voters, sparking an internal revolt against the changes.

A number of alternatives to the plan have been floated by the solar industry and crossbench MPs, who are needed to get the changes through the state’s upper house.

They include extending the life of the scheme past its 2016 end date, reducing the tariff cuts and making electricity retailers pay for power generated by households.

John Grimes, chief executive of the Australian Solar Energy Society, said the cost of the scheme had been overstated by $230 million.

Millions more could be saved by reinstating the scheme’s original cap of 300 megawatts and making retailers pay for electricity generated by solar panel owners.

In total, the solar industry plan could save between $455 million and $750 million, he said.

'Tomorrow is D-day. Backbenchers from right across the state will come to give a clear message to Premier O'Farrell that the community of NSW will not accept these irresponsible retrospective changes to solar legislation,' Mr Grimes said.

'We're confident in our figures, and we think that this is a really sensible way forward to not only solve the budget issue, but also provide fairness for solar going forward and protecting (the) industry.'

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