Solar electricity incentives

As energy prices soar, solar electricity should be a smart investment – but are the incentives strong enough?
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03.Rising electricity prices

Brad Shone, of Moreland Energy Foundation, says rising electricity prices make solar panels a wise investment. “Our electricity demand is growing and the current infrastructure is straining to cope,” he says. But like others, he sees government policy as providing limited support.

Wodonga solar retailer and chairman of the Solar Energy Industries Association of Australia (Victoria), Gary Davy, believes most Australians do not see the value in investing in solar panels. “People have always had that attitude: how long will it take before it pays for itself? Yet people will go out and buy a $90,000 car and think nothing of it.” Davy believes real government rebates or inducements, such as a generous gross feed-in-tariff, are needed to boost support.

Goodbye rebates, hello credits

Since 2000 the federal government has provided a rebate for solar panels for remote systems (not connected to the grid) and grid-connected homes. Rebates for both have been scrapped and now come under the Solar Credits Scheme. For those households earning less than $100,000, who previously qualified for a rebate of $8000 if they installed solar panels, the new scenario is less generous and infinitely more complicated.

Those earning more than $100,000 will now be eligible for a much greater subsidy – but what you get will really depend on where you live. Importantly, unlike the previous rebates, small businesses and non-primary residences such as holiday homes will also be eligible for the new scheme.

The new scheme also has its environmental critics. In a joint statement, the Alternative Technology Association (ATA), Greenpeace and the Moreland Energy Foundation say the scheme allows “phantom” certificates to be created by multiplying the Renewable Energy Certificates (RECs) by five. These RECs then go towards achieving the national Mandatory Renewable Energy Target, even though four in every five certificates do not represent actual green energy.

“Households investing in solar do so at significant personal cost,” says Damien Moyse, Energy Advocate for the ATA. “In return for their sacrifice, the government is effectively cancelling out the greenness of their solar system.” Given that most people are motivated by increasing renewable energy in Australia and cutting their own emissions, he believes the new scheme is duping solar investors.

Community bulk-buying schemes

To combat the high cost of solar panels, some communities have set up bulk-buying schemes, whereby a large number of households in one area commit to buying PV systems at a discounted price. Some solar retailers, local councils and community groups have also facilitated schemes using this model.

However, they have been largely dependent on the $8000 solar rebate which, combined with the selling of RECs, had reduced the price for a bulk-purchased 1kW system to as low as a few hundred dollars (but typically about $1500-$3000). Some systems were even offered for free under the old rebate scheme.

The reduced subsidy from the new Solar Credits Scheme is likely to put an end to those ultra-cheap bulk deals, although some companies may still be able to keep prices quite low in the sunnier parts of Australia.


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