Carbon Tax and Government Support – the Other Side of the Coin

Last week we examined the point of view of academic Mark Diesendorf who stated that the much villified carbon tax will probably be insufficient to encourage renewable energy investment in Australia. This week we look at the opposing view and find that overseas renewable energy companies are indeed putting their hands in their pockets to fund renewable energy schemes in Australia, particularly those looking at exploiting our abundant sun.

These companies are looking at taking advantage of the positive renewable funding climate in our country, support which is expected to be funded through revenue supplied by the contentious carbon tax.

One such overseas company, the US-based solar panel producer First Solar, which opened an office in Australia this month, is looking to use government support to help it supply solar panels for large scale projects. The company has already entered into an agreement with US energy giant GE Energy Financial Services and the West Australian owned Verve Energy to supply its trademark panels for a solar farm which will supply a major desalination plant in WA’s south west.

Interestingly though, First Solar vice president Jack Curtis told Radio Australia’s Karen Snowdon, (as part of the network’s AsiaPacific Business Report) that he considered government support for renewable projects to be crucial for the development of the nascent solar industry in the country.

“We really are at the genesis of the large scale solar market and it is really going to be determined by the level of support that regulatory stake holders are willing to provide for the next five years because there is a gap that needs to be bridged,” he told Radio Australia in the Sept. 16 interview.

“It is our job as manufacturers and providers of solar power plants to be able to demonstrate if you help us bridge that gap in the next five years, we’ll get the cost to a point where we don’t need that support anymore.

However Curtis said that any government support should be limited to those projects that have passed a stringent viability test.

”…loan guarantees, tax incentives and ability to identify what are viable projects because the greatest challenge in new markets is projects getting proposed or bid into procurement cycles where they don’t really have a chance of getting built.” he said.

“…any policy that looks to support solar has to have very strict viability criteria such that you don’t have projects that are bid in and granted financial support but eventually can’t be constructed.”

So what do you think? Will government incentives, particularly those funded through the proposed carbon tax, help the solar industry in Australia? Have your say in the comments below or pop over to our Facebook Page.

Listen to the Radio Australia interview or read the transcript here.

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