Calls For Solar Subsidy Scrapping At Major Australian Energy Summit

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Banging of the solar subsidy-axing drum grew louder yesterday at The Australian Financial Review National Energy Summit.

Echoing his comments made in August, Origin Energy managing director Frank Calabria said he wants solar subsidies shown the door sooner rather than later, even though Australia’s national subsidy is already being gradually phased out.

“We need to phase out the small-scale renewables scheme, it does not need subsidies any more, it is growing, it breaks records of volumes on to rooves every month and we know just how competitive that industry is, so it needs to be phased out,” said (paywall) Mr. Calabria on Wednesday.

As we reported last week, Australia’s Clean Energy Regulator estimates 1,600 megawatts of small scale solar capacity will be installed this year, a 44% jump on 2017. According to the Regulator, more than 1.9 million small-scale solar power systems had been installed across Australia as at August 31, representing nearly 7.4GW of capacity.

EnergyAustralia’s head of energy Mark Collette agreed with Mr. Calabria’s view, stating PV uptake was “running faster than a freight train” and didn’t require subsidies any more.

Energy Consumers Australia chief executive Rosemary Sinclair was reported as stating the impact of removing the subsidy on solar adoption “wouldn’t be very large”.

That view is certainly debatable. The cost of solar panels is low thanks to the subsidy (aka solar rebate) that knocks thousands off the cost of an average-size solar power system. Removal of the subsidy could put solar power out of reach of large number of households and lock them into ongoing high electricity bills. There would be many families without a spare extra few thousand dollars kicking around to make up the difference in a post-subsidy Australia (although some finance options may be viable).

Also still keen to see the solar rebate prematurely axed is the Australian Competition & Consumer Commission . An ACCC report released in July recommended Australia’s small-scale renewable energy scheme (SRES) should be wound down and abolished by 2021. This is even though it will reduce household electricity bills in the short term by only 1% and is likely to increase them over the longer term.

ACCC chairman Rod Sims was at the Summit yesterday and reiterated his view it was time for solar subsidies to go.

At this stage it’s still not clear if this ACCC recommendation will be implemented by the Morrison Government, but Minister For Getting Electricity Prices Down Angus Taylor has not yet ruled out the premature axing of the SRES.