The much anticipated final recommendations concerning the future of Australia’s Renewable Energy Target (RET) have just been published by the Climate Change Authority (CCA).
The CCA says the benefits of changing the target level do not appear likely to outweigh the costs of reduced investor confidence and that the target should remain fixed in terms of gigawatt hours (41, 000 GWh) to provide confidence to investors.
It says the The Small-scale Renewable Energy Scheme (SRES) should remain separate from the Large-scale Renewable Energy Target (LRET).
With regard to small scale solar, a suggestion made in the earlier Discussion paper to implement a “Solar Divider” has been modified. Under the divider scenario, a megawatt hour of solar would have been worth less than one megawatt hour electricity from other renewables, further cutting into subsidisation.
The CCA is now referring to this divider concept as an “emergency brake”.
“In the event that there was an unexpectedly high level of installations of units under the threshold limit (signalling that the level of subsidy is unnecessarily high), the Minister could exercise the power to lower the price cap (set at $40 through the clearing house price). While this tool has its drawbacks, it could act as an ‘emergency brake’ should installations take off again, perhaps driven by falling technology costs or further rises in the Australian dollar,” states the CCA summary.
The Australian Solar Council had previous vigorously opposed such an idea, fearing it would be misused.
Also as feared, the CCA has recommended a phasing out of the Small-scale Renewable Energy Scheme (SRES) by 2030 by reducing the deeming period for Renewable Energy Certificates from 2017. This will also reduce subsidy levels.
Earlier this week, the Australian Solar Council warned such a move would mean more of the same solar rollercoaster ride the industry has experienced as history has demonstrated governments have a tendency to fast track any phase-out arrangements; the most recent case being the very premature abolition of the Solar Credits multiplier.
The CCA also recommends the threshold for small-scale solar power systems to be included in the SRES “should be reduced from 100 kW to, say, 10 kW. Larger systems should be in the LRET.”
Another point that may not be well received is the Authority recommends maintaining one accreditation body for small-scale solar installers. In its discussion paper, the Authority made the preliminary recommendation to allow for certified accreditation bodies beyond the Clean Energy Council.
The CCA’s recommendations will now be considered by the government and it may be a few months before final decisions are made.
More information on these and other Climate Change Authority Renewable Energy Target recommendations can be viewed in full here (PDF)
