Australia’s Climate Change Minister, Greg Combet, has delivered another blow to the solar industry and households wanting to install solar power systems by announcing further reductions to the Solar Credits program.
The Solar Credits Scheme is based on Renewable Energy Certificates and a multiplier system, currently set at 5. In December last year, the government announced a reduction from 5 to 4 from July 1, 2011; slashing up to $1,200 off the Solar Credits rebate. The 5x multiplier was originally meant to stay in place until mid-2012.
Mr. Combet announced on Thursday morning the multiplier will be further reduced from 4 to 3 from the beginning of July this year. The multiplier will then be again reduced next year to two and from July 2013, no multiplier will be applied; effectively ending the Solar Credits Scheme altogether.
According to a joint press release from Minister Combet’s office, existing written contracts to install small-scale solar panel, wind and hydro electricity based systems, made on the basis of a Solar Credits multiplier of four and where a deposit had been paid prior to today, will be preserved.
The release states that from 1 July 2011, the Solar Credits multiplier will “provide households with upfront support equivalent to around a third of the out-of-pocket costs for a typical 1.5 kilowatt (kW) solar panel system, before taking into account ongoing electricity cost savings and any State or territory based feed-in tariff incentives.”
While a degree of support will remain in place for the foreseeable future, a reduction of this nature will have a major impact on the solar industry and households wanting to take part in Australia’s solar revolution. Sudden solar rebate changes have been a common scenario in Australia in recent years; rattling confidence and creating a very unstable environment for the industry to work in. Unexpected cuts in the past have led to job losses and smaller solar businesses closing their doors.
According to national solar power solutions provider Energy Matters’ CEO, Jeremy Rich, the ongoing instability must be addressed.
“I echo my comments made a few days ago in relation to the NSW Solar Bonus Scheme being put on hold. The boom and bust policy approach to solar power must end. Solar is already cheaper than fossil fuel in some countries - and that day can arrive even faster in Australia with solid, responsible policies in place that encourage investment and uptake. Australia could be a renewable energy leader, rather than running the risk of being viewed as lagging behind in clean distributed energy generation and the solar power revolution.”
