Early Solar Subsidy Cut Condemned

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Yet another rush to order and install solar power systems has been triggered after the Federal Government announced an early end to the Solar Credits multiplier – a move that has been condemned by the industry and its supporters.

Announced on Friday, the Federal Government said it would totally phase out the Solar Credits multiplier 6 months early – meaning the popular solar panel subsidy will be reduced by 50%.

Where a contract to purchase a system was entered into on Friday or after, the installation must occur before 1 January 2013 in order to be eligible for the current subsidy level. Where a contract was signed prior to Friday, the installation needs to occur before June 30, 2013.

National solar provider Energy Matters experienced a marked spike in activity immediately following the announcement, with people racing to secure a system and installation slot before the deadline. Energy Matters is currently running a series of solar power system specials and has extended its 133 SUN solar hotline hours to help as many households as possible to install solar panels before the cut-off date, but warns installation appointments are being rapidly snapped up.

After the initial shock of the announcement, the solar industry responded harshly to the news of the early subsidy cut.

The Sustainable Energy Association of Australia (SEA) said early closure was both untimely and unnecessary.

“This is the second time the government has abruptly intervened in this program, and it has created further uncertainty in the solar PV industry, which has been unfairly subjected to decisions that have created dramatic boom/bust cycles,” said Kirsten Rose, SEA Chief Executive Officer.

The Clean Energy Council pointed out the continual flip-flopping on policy acted as a deterrent to investors.

“We would have expected the government to have more regard for the sense of investor uncertainty today’s announcement creates, right at the time when both major parties are seeking to demonstrate that Australia is a reliable place in which to invest, with stable and consistent market rules,” said Clean Energy Council Policy Director Russell Marsh.

The Australian Solar Council also slammed the decision.

“The solar industry is already facing great uncertainty from the Review of the Renewable Energy Target – which has foreshadowed even greater cuts to solar funding – and today’s announcement will only hurt the solar industry and Australian families suffering from soaring power bills,” said CEO John Grimes.

Greens leader Christine Milne added her voice, strongly criticising the early subsidy cut.

“Why is a Labor government hitting successful small businesses that employ thousands of Australians right around the country, at the same time as delaying until 2017 the higher costs for methane emissions from mines and landfills? It seems incredible that the Government wants to bring forward harm to renewable energy industries but delay cost impacts to fossil fuel polluters.”

Minister for Climate Change and Energy Efficiency Greg Combet said the decision had been made in order to lower the impact of the high uptake of solar PV on electricity costs for homes and businesses. However, John Grimes states the cost of the Small-scale Renewable Energy Scheme has already peaked, and would have fallen to less than 1.5% of household power bills within a couple of years if the original timetable had been observed.