Australian Solar Subsidy Threat : More Reactions

Threat to Australia's solar subsidy

With the dust settling (a little) after the ACCC suggested axing Australia’s solar subsidy prematurely, more have weighed in on the recommendation.

As we mentioned yesterday, the Australian Competition and Consumer Commission has published a report containing 56 recommendations that it says will help address electricity affordability in Australia. Among those was a proposal to wind down and abolish Australia’s major solar subsidy by 2021.

The solar subsidy has only been a bit player in electricity price increases since 2007-08, comprising 20% according to the ACCC. But small-scale solar power has also helped rein in wholesale electricity prices, which made up 22% of increases – and would have been higher without solar’s influence.

Some figures being bandied about indicate winding down and ending the solar subsidy by 2021 would have little impact on electricity bills – in the region of $40 – $50 for 2020/21 for the entire year.

However, the negative impacts could be significant. While the cost of solar power is still reducing, an accelerated phase-out of the subsidy could put the bill-busting technology out of reach of many Australian households. This would then also impact on the nation’s solar industry, which employs thousands of Australians.

Clean Energy Council

The Clean Energy Council said the ACCC’s report contained many valuable suggestions – but prematurely ending the subsidy was not one of them.

“The Small-scale Renewable Energy Scheme (SRES) provides modest support – which continues to reduce every year – which has encouraged the installation of rooftop solar power on almost two million homes,” Mr Thornton said.

The Greens

It will come as no surprise the Greens aren’t keen on the idea. Climate change and energy spokesperson Adam Bandt said:

“The Government must immediately rule out this Trump-like proposal to cut support for rooftop solar and instead provide new subsidies for gas- and coal-fired power stations. To bring down power bills and cut pollution, we need more renewable energy, not less.”

Smart Energy Council

Expanding on comments made yesterday, the Smart Energy Council continued its call for the recommendation to be ditched.

“We know the Turnbull Government wants to stop big renewables with the National Energy Guarantee,” said Smart Energy Council CEO John Grimes. “That’s bad enough, but the Government would have rocks in its head if it wants to stop families getting rooftop solar as well.”

Mr. Grimes called on the Government to outright reject the recommendation yesterday, but Energy Minister Josh Frydenberg has reportedly commented that all 56 recommendations made in the report are on the table.

That the Government is refusing to rule in or out any recommendation isn’t surprising – at this point the virtual ink on the report is still drying and there’s a lot to consider.

Prematurely phasing out the Small-scale Renewable Energy Scheme is something the Government will need to think about very carefully; not just for its impacts on households, but also with regard to this government’s future. Millions of Australians live in solar households and millions more want to install or support the technology – and for those old enough, they vote.

As for the Opposition, Shadow Minister for Energy Mark Butler says Labor is still considering the report.

While this recommendation remains in limbo and the future of the subsidy uncertain, the situation could lead to another rooftop solar rush – as has happened in the past when the subsidy has been threatened.

UPDATE: Read Ronald’s take on the situation.

About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

Comments

  1. Aren’t we about due for a general election of the feral parliament?

    A double dissolution election would be good, if the members of the senate started to finally represent their constituents instead of their “donors”. Then that would lead to a bouble dissolution election, if the members of the senate would show that they will not be bullied or bribed into supporting the feral government.

  2. The reality is probably far more complex than comes out anywhere in the press, or that any party room has the ability to comprehend.
    Subsidies are useful to a point. Sometime in the future, STCs will become more beneficial to installers than to homeowners. That that time they will have outlived their utility. The STC mechanism does have a “decay” mechanism built into it already.
    Ultimately, rather than just getting rid of subsidies, the focus probably needs to be moved. For instance, there probably needs to be a change of focus from solar to batteries, in that there may be a benefit in driving the penetration of battery systems. This is however something that power companies will fight tooth and nail against, as it will make consumers less reliant on them.- That’s not to say that they don’t deserve to get their comeuppance! – They have, after all, been extorting money out of consumers for long enough.

  3. Michael Dill says:

    Well, get rid of the solar and wind subsidies, and the ones for coal and NG plants, Should even out really soon. Might even add a tax for causing lung damage that is currently paid for by the health system.

  4. I dont think taxpayers should be paying for my system at all. Sick of people like Bandt saying solar is competitive, its not, its just what people who havent been in heavy industry and the required baseload it requires to manufacture in Australia say.
    I have lived offgrid for many years, started back in the 80s so have a little experience at powering 2 subtropical homes on the property and a workshop.
    Stand up on your own two feet instead of holding your hand out.

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