Australia’s Solar Credits Program – Update

solarcreditsprogram

Further update: January 2009: Australian Solar Credits Program FAQ – click here

Yesterday we reported on the surprise announcement of the pending replacement of the Australian Government’s $8,000 solar rebate with a new “solar credits” program, as part of draft legislation that was also released on Wednesday.

In the legislation, the Mandatory Renewable Energy Target (MRET) scheme has been renamed to the Renewable Energy Target (RET) . Release of the draft legislation outlining the scheme rules for a 20 per cent renewable energy target by 2020 and was applauded by the Clean Energy Council as being “a long time coming”.

The new solar credits program caught many off guard after the release of the controversial Carbon Reduction White Paper that made no mention of the scheme. The program has been welcomed by many in the Australian solar industry and renewable energy advocates who have been very concerned with the seeming imbalance between support for the coal industry and incentives for renewable energy.

However, some have expressed misgivings about the impact the solar credits program may have on low income earners as it will erode some of the financial benefit available under the current rebate arrangements. Senator Christine Milne also stated “the fact that each megawatt hour of solar power will take up the space of five megawatt hours in the scheme means the 20% target will now deliver even less renewable energy into the grid than it should.”

In a press release issued late yesterday yesterday, Environment Minister Peter Garrett said Labor’s election commitment to double the amount of solar panels on Australian rooftops within eight years was delivered within 18 months. Through the new solar credits program, Minister Garrett also said the “Rudd Labor Government will put more solar panels on Australian roofs than any other government has ever done.”

Minister Garrett also offered further clarifications on the solar credits program:

* The current $8,000 solar rebate will be replaced by the solar credits program in July 2009

* The credit would represent the equivalent of up to $7,500 in price reductions on a 1.5 kilowatt solar power system

* The solar credit will not be means tested.

* It will be open to everybody – home owners, small businesses and community groups

* The scheme applies up to a level of 1.5 kilowatt hours rated systems. Householders, businesses and community groups will be able to install larger systems, but the credits will only apply to the first 1.5 kilowatts

* The solar credit program will also apply to wind power and micro hydro systems

* The Renewable Energy Certificate (REC) multiplier system that will form the basis of the solar credits scheme will operate on the following timelines; 2009-10, five times current levels; 2010-11, five times; 2011-12, five times; 2012-13, four times; 2013-14, three times; 2014-15, two times; and 2015-16 onwards, no multiplier.

As reported yesterday, there still hasn’t been any more developments on what is widely regarded as a critical element needed to turn Australia into a true solar nation – the implementation of a nationalised gross feed in tariff program to further encourage investors and reward home solar power system owners by paying them a premium rate for each kilowatt of electricity their systems produce.

We’ll continue to publish updates on the solar credits program as new information becomes available.

Related:

Australian Solar Credits Program FAQ