Courier Mail
By: Markus Lambert
The Government has blown its climate-change credentials by means-testing the solar rebate, writes Markus Lambert
'Rudd has ensured there will be fewer solar panels on Australian roofs'
By means-testing the $8000 solar rebate, the Rudd Government has done irreparable damage to Australia's burgeoning solar industry. To fix it, and at the same time reclaim its tattered climate-friendly credentials, the Government must immediately introduce country-wide gross feed-in tariff laws.
Australia is once more being denied the environmental and economic benefits which a well-developed local solar power installation network could bring. The sudden demise of the solar industry is taking place despite the Rudd Government's pre-election hype about climate change. By excluding households earning more than $100,000 from the solar rebate, Rudd has ensured there'll be fewer solar panels on Australian roofs.
This backward step is happening in a country which receives twice the sunshine as the whole of continental Europe, yet only 5 per cent of our electricity production is solar.
The solar industry has reported widespread cancellations of solar power systems since Budget night. The Howard government introduced the $8000 rebate last year, creating a program that has been "too successful'', and a budget shortfall of more than $20 million against the planned amount of $30 million a year.
A solar system which produces about 50 per cent of the typical household's consumption costs $13,000 after the rebate. And 80 per cent of purchasers of grid-connect systems in the past year were households earning more than $100,000.
The $8000 rebate allowed the industry to go through a mini boom, which had positive outcomes. The price of systems came down by more than 10 per cent over the past 12 months, because manufacturer discounts increased as buying volumes increased. The industry passed these saving on to customers. Also, a reliable network of solar installers started to spread across the country, stimulating small business and creating vital infrastructure in the field of local renewable energy. The purchasers of solar power systems started to monitor the use of their electricity consumption, which in households earning more than $100,000, with large fridges and plasma TVs, is a good thing.
The Rudd Government has made much use of the term "working families'', but means-testing the solar rebate denies those same working families, which were freed from the Medicare surcharge, the opportunity to go solar and lower their carbon footprint.
What the solar industry wants and needs is a framework for a sustainable solar power support mechanism. In the 50 countries worldwide which have seen solar power take off, it has been thanks to gross feed-in laws.
Gross feed-in laws require electricity retailers to pay renewable energy producers, such as roof-top solar panel owners, a prescribed price over a guaranteed period of time for all the clean renewable electricity generated by their systems and fed back into the grid.
Because the energy retailer pays the owner of the solar system on the entire electricity production, the owner gains a specific return on investment and can pay off their system in seven to nine years. However, the feed-in schemes introduced in South Australia, Queensland and Victoria recently are net feed-in tariffs, meaning they only pay homeowners for the electricity exported to the grid minus what is consumed in the home at the time of production.
This system significantly discriminates against both owners of smaller grid-connected systems and those who are more likely to consume electricity during the day, such as pensioners or stay-at-home parents. Alternatively, double-income families who are typically away from home during the day do OK under net metering, but now it is these households who have become ineligible for the solar rebate, due to the $100,000 per household income means test.
When Germany introduced gross feed-in tariffs in 2000, it set its 2010 renewable electricity target at 12.5 per cent of total consumption. It has now doubled the amount of electricity generated from renewable energy sources and reached the 2010 target three years ahead of schedule. International experience tells us gross feed-in tariffs are successful in stimulating the uptake of renewable energy, addressing climate change and creating strong local industries and employment.
However our state governments, through inventing a net feed-in tariff, have made a mess of policy which has been proven overseas. It's time for the Federal Government to introduce a gross feed-in tariff as sustainable and fair support for the renewable industry.
Only then can the solar means test make any sense.
Markus Lambert works for a renewable energy retailer.