The Australian Solar Council has released a detailed analysis by industry experts of the Climate Change Authority’s (CCA) draft recommendations for the Renewable Energy Target.
The Council recently expressed serious concerns relating to the Climate Change Authority’s (CCA) recommendations to slash incentives for residential solar power past what is already set to occur, i.e. the final phase-out of the Solar Credits multiplier next year.
Particularly troubling was the suggestion of introducing a “solar divider” if the cost of solar panel systems fell in the previous year; if the payback period for solar customers was less than 10 years; or if the scheme made up more than 1.5% of electricity bills.
This “solar divider” would be in the form of reducing the number of Renewable Energy Certificates (RECs) below 1:1.
According to the analysis, setting a nominal 10 year payback period – or any other payback period for that matter – is “ill founded” and would be a massive set-back for the industry and consumers; resulting in insolvencies and consequently a lack of end-user support.
The analysis references a 2011 survey that found 75% of consumers were seeking a payback less than 7 years.
Also flagged was the effect reductions in incentives have – increasing short-term demand at the expense of medium-term and creating an installation rush that impacts upon quality and customer service. For this reason alone, the report’s authors say, “step reductions in incentives are undesirable, and their impact upon medium-term costs is questionable.”
“The potential negative implications and complexity of changing adjustment mechanisms in the SRES far outweigh any potential for material reductions on retail electricity prices,” said Australian Solar Council CEO John Grimes, who added that the costs of the scheme have already peaked.
The CCA also raised the idea of moving commercial scale solar power systems above 10kw from the SRES into the Large-scale Renewable Energy Target (LRET).
The analysis flags that commercial solar volume is likely to remain low, but the potential impact of the CCA’ proposal is large.
“Rather than pre-empting the conceivable SRES blowout that commercial PV could cause, it would be preferable to monitor the situation and apply corrective action when and if necessary.”
The full report can be viewed here.
