Australian rebates and incentives for small-scale solar power installations have been rapidly dwindling – or vanishing altogether – over the last few years.
Here is a brief look at the history of recent solar rebate programs and the impact of their sudden disappearance on customers and the solar PV industry.
Solar Credits was introduced as a replacement for the Solar Homes and Communities Plan (SHCP) scheme. On 9 June 2009, Federal Environmental Minister Peter Garrett announced the sudden axing of SHCP rebate and the program was closed to further applications on midnight of the same day.
Solar Credits came into effect soon after as a mechanism of the Small-scale Renewable Energy Scheme. Under the program, eligible premises receive additional small-scale technology certificates or STCs (formerly known as RECs), which can be traded for cash value.
In December 2010, the Federal Government announced its plans to phase out the rebate a year earlier than planned.
From 1 July 2011, the Solar Credits multiplier was reduced from five to three. On 1 July 2012, the multiplier reduced to two, where it will remain until the program’s end on 30 June 2013.
RENEWABLE ENERGY BONUS SCHEME (REBS)
A replacement for the Solar Hot Water Rebate Program, the REBS offered a rebate of $1000 for the installation of solar hot water system or $600 for a heat pump hot water system.
The REBS came to an abrupt end on 28 Feb 2012, with the Parliamentary Secretary for Climate Change Mark Dreyfus declaring the program would close just minutes after his announcement, at 5pm that day.
SOLAR FEED-IN TARIFFS
A Solar feed-in tariff is a premium rate paid for electricity fed back into the main grid from an eligible rooftop solar power system.
Solar feed-in tariffs (FiTs) in Australia have so far operated only on a State Government Level; there is no nationalised FiT program to date. In most states, solar FiTs have been either scaled-back or closed completely.
The hugely popular NSW Solar Bonus Scheme ended in 2011, as did FiT schemes in the ACT and WA. The solar FiT program in Victoria was substantially downsized in the same year and South Australia’s FiT was amended to offer a reduced rate to new customers at the beginning of 2012.
Most recently, the FiT offered under Queensland’s Solar Bonus Scheme was slashed by 80 per cent for all new installations from July 10, 2012.
There are currently no FiT schemes in Tasmania or the Northern Territory.
The axing or scaling back of solar rebates over the last couple of years has attracted intense criticism from the solar industry and renewable energy supporters. In particular, the shock termination of the REBS in early 2012 was widely condemned as the latest in a series of blows to solar uptake in Australia.
Chief Executive of the Sustainable Energy Association of Australia, Professor Ray Wills said: “The renewable energy industry continues to be plagued by government decisions at both Federal and State levels that lead to boom/ bust cycles and fail to provide the conditions needed to grow the industry sustainably… In 2012 we should have learnt something from the poor decisions of 2011 – it appears we have not.”
The Australian Solar Energy Society called on the Australian Government to reinstate the rebate.
“It seems Australians are now being punished for supporting one of the most successful clean energy programs introduced in recent years,” said AuSES Chief Executive, John Grimes.
“The disastrous solar policy roller-coaster continues. Another solar scheme shut down without notice, more solar jobs lost. That’s bad policy and bad process.”
WHAT DOES THIS MEAN FOR SOLAR PV IN AUSTRALIA?
The disappearance of so many Government subsidies is certainly a worry for the solar industry, with many in the clean-energy sector concerned about the effect on manufacturing and installation jobs.
In response to the recent downsizing of Queensland’s FiT rate, Clean Energy Council acting Chief Executive Kane Thornton spoke of the industry’s disappointment in the decision and the predicted loss of around 4,500 solar jobs. The sudden axing of the REBS rebate sparked warnings that up to 7,200 jobs across the country were in jeopardy, according to The Australian.
There is little doubt that State and Federal Government rebates have been instrumental in driving the surge in solar power installations over the last few years.
The majority of recent solar rebate programs were introduced in 2008/2009; since then, the cumulative installed capacity of solar PV has grown from under 100MW to well over 1,000MW, according the Clean Energy Council’s 2011 annual report.
The report shows that in the first eight months of 2011 – when solar rebates were mostly at their peak – the number of Australian households with solar panels more than doubled.
It remains to be seen the degree to which solar rebate reductions will slow this rapid growth.
SOLAR – STILL A GOOD INVESTMENT?
On the positive side, the Rooftop PV Information 2011 report released by the Australian Energy Market Operator (AEMO) in May 2012 suggests that rising electricity prices – combined with lower solar panel costs – will bring grid parity to most residential solar customers.
This essentially means that solar power generated by PV cells on Australian rooftops has become so cheap and efficient that they now produce electricity for the same price that is charged by the electricity grid.
Indeed, a different report entitled PV in Australia 2011 by the Australian PV Association shows solar panel prices have dropped more than 50 per cent since the beginning of 2011 and that typical module prices in Australia are around a quarter of what they were in 2008.
What’s more, solar credits are not quite dead yet. Customers can still benefit from STCs, which can be traded for a discount on the upfront an eligible renewable energy generation unit.
Depending on the size and location of the system, STCs can generate savings in the thousands. Until 30 June 2013, customers will continue to receive twice as many STCs under the Solar Credits scheme.