Uncertainty in Australian solar policy rears its ugly head

depressed businessman

CEO of First Solar reacts to Abbott’s latest speech on energy policy

One recurring, if unfortunate, theme of these pages has been the constant spectre of uncertainty in Australian solar policy. We’ve ranted before about why Australia should be led by more forward thinking pollies in both Canberra and the state capitals but bugger it, when you’re onto a good thing, why not continue?

So here goes, Rant #234 about the paucity of Australian solar policy leadership…

This week your eagle-eyed correspondent noticed a key news item on the ABC which would appear to reinforce the same old, “boom and bust” solar policy which has so haunted the solar sector over the years.

This was the announcement that gun solar company First Solar is re-assessing its investments now that there is uncertainty (that nasty word) over the government’s Renewable Energy Target. You’ll no doubt recall the feds’ propensity to stack the review commission on the RET with those gentle folk who have expressed doubt over the human-induced aspect of climate change in the past.

As Sir Humphrey of Yes Minister fame told the Minister:

“Never set up a review commission unless you know what its findings will be”.

But back to First Solar’s reaction.

“We really need to look at what does the next five years look like from a broader policy backdrop perspective and what comes after these projects and whether the investment should continue to be made,” First Solar’s Jack Curtis was quoted as saying by the ABC.

This all sounds familiar doesn’t it readers? The light speed-like changeability of decisions made on renewable energy. Policy switchbacks, backflips and broken promises made faster than newly-elected ministers in a bunch sprint to the public feeding trough. Is this too harsh? Or a fair assessment?

Like any punter, big solar investors such as First Solar need to have an idea of future returns before they reach into their pockets. You may recall that First Solar has already put funds up to build a $450 million solar power plant in western New South Wales. This is more than significant as it is enough to power 50,000 homes.

So what could be more off-putting for a potentially huge investor like First Solar? To have a government playing games with such an important Australian solar policy instrument such as the RET is critical for the crunch decision to put their money on the fridge.

Now there is a school of thought which would say this changeability and uncertainty may well be designed to service a certain energy sector of the economy. That a continual cycle of boom and bust will eventually scare off solar (and other renewable energy) investors to the benefit of the fossil fuel mining magnates.

Does this conspiracy theory have legs? And if it does, perhaps we should re-introduce another of our recurring themes: that of cutting the umbilical cord that joins the solar sector with our excuse for an Australian solar policy.

To be fair there is also the other side of the coin which argues that big investors such as First Solar are more than happy to make huge profits out of Australian solar policy as long as someone else (read the taxpayer) takes on the risk. The argument continues that without government guarantees (including a RET), real investors in renewable energy — those willing to assume proper risk — will emerge rather than those happy to accept taxpayers’ hard-earned dosh.

Which school of thought do you agree with readers? Is it the quality of investor we’re after, those willing to really risk a punt in the future of Australian solar policy? Huge call out for opinions, ideas and thoughts on this. Pop your comments either here or over at our Facebook, Google Plus or Twitter Pages.

Comments

  1. The cat is out of the bag with regard to Solar PV take-up. Subsidies were needed to get the ball rolling, but now that we can have systems for a bit over a quarter of the prices we saw five or more years ago, people will rip into it every time the retailers put the price of power up. Subsidies will not increase the up-take rate much now.

    • Diego Matter says

      First Solar is only building solar plants. The economics for solar plants are different and still need support. They calculate with the wholesale price of electricity production, not the retail price.

    • Howard Patrick says

      I suspect that if the Commonwealth and State Governments insisted that retailers paid the “off-peak” tariff there would be a substantial increase in the uptake of small-scale PV.

      Actew-AGL charges about 18 cents a KWh and the 20MW system installed in the ACT was dome on the basis of about the same figure.

      The fossil fuel generators will keep the pressure on our CREATIONIST Prime Minister, as long and as hard as they can, to ensure he ignores anthropogenic climate change and renewable energy technologies.

      • Yes Minister says

        I dunno that whether not not the Wacky Wabbott believes in creationism has any bearing on his antipathy toward renewable energy, in fact its far more likely that the ‘inducements’ provided by the big end of town weigh far more heavily on his mind than AGM and / or renewable energy. Remember the clown was a lawyer in a previous life & the word avarice was invented especially for that tribe.

  2. Does this affect the Australian manufacturers of solar equipment for the domestic market? There are not many of them and they tend to be more expensive than the importers, will this make it even harder for them to survive. The issue is if I buy from a local manufacturer, what is the likelihood they will be around in 1 or 2 if the current gov’t makes it harder for them. Of course a change in gov’t may turn this upside down again.

  3. DylanPete says

    With TA there is only one direction for renewable energy: to the abyss.
    Once enough irreversible damage has been inflicted to the sector his government might send an unmanned submarine to go to its rescue. I wonder how much that current abyss operation costs and how that compares to the RET budget to keep the solar sector humming. If that money is available to search the abyss (which I do not reject) than why can’t the money be found to support a sector offering so much potential benefits to the Australian economy?
    Soon he’ll deserve a new nick name “The Abbot of the Abyss”.

    • Let’s not be too pessimistic. Small scale solar is a matter of principle for anyone concerned about the AGW provided they have a roof and a few thousand to spare. Once installed, solar PV changes people’s thinking. They start to think more about their energy use; they start to read their bills more closely; they start to dream about how large scale systems. They want to invest ethically. We have a tiny PV system compared with newer systems yet we live within our energy means.

      DylanPete is quite right to question the wild goose chase going on at sea. Why is all this money apparently being spent by governments worldwide when nothing can be found for projects that benefit the citizens of those countries, their economies and indeed the planet? Let’s keep our nerve and vote this bunch of wankers out at the first available opportunity. The double dissolution can’t come too soon.

    • ….or should that be ‘The Abbothole of the Abyss’?

  4. Dear Colin. There is but one Australian manufacturer of solar panels – Tindo Solar located at Tech Park, Mawson Lakes, South Australia. My Name is Richard Inwood and I am a minor share holder in Tindo. To successfully compete against imported panels Tindo needs to be different, and we are. The Tindo Karra 250 is designed, engineered and manufactured in Australia for Australian conditions. We want our 25 year warranty to mean something so the materials and testing of the panel during manufacturing is all genuinely worlds best practice. Our factory is an open facility and we happily allow the public access. Our facility can actually make a panel that would be priced the same or less than Chinese made panels if we used lower quality materials, reduced our quality control measures in the process but we elect to not do so. Tindo is also unique in that we are factory direct; manufacture and install direct from our facility as a one-stop-shop meaning that all the middle man costs are removed for our clients. In this way we can compete. The other way that Tindo is unique and will underpin our longevity is that we have recently be come an electricity provider. Tindo can now be your day time energy provider in the same way that AGL or Origin might, except that our energy is cheaper (30%) and you get to own the system. This is called a Power Purchase Agreement and this is truly the way of the future for clean, cheaper energy provision and we are creating manufacturing jobs in Australia. Sincerely – Richard

    • Richard, would you mind to elaborate a little further on what you wrote?
      QUOTE: “Tindo can now be your day time energy provider in the same way that AGL or Origin might, except that our energy is cheaper (30%) and you get to own the system. This is called a Power Purchase Agreement “

      • Danielle says

        He’s just trying to pitch a sale for Tindo. But i’m pretty sure Tindo only does panels, inverters etc.. install it yourself and whatnot.

        If you want the best panels, go German. They have the best in the world. My boyfriend did his apprenticeship through solar after school and he’s been doing it a while now – i’m talking years, don’t mean to seem like i’m in 12th grade – he work’s for Green Initiatives.

        Question for anyone interested in answering: Not a hundred percent sure yet as I haven’t gotten around to asking, but if GI – the company he contracts to – loses the rebate, why woulld they have to drop all their contractors? They charge almost double the price, not a quarter, for a system install plus to be honest, he’s probably the hardest worker out there right now in Solar and in the 25 – 30 age bracket. They all just leave off and go work for Energex, cruising around checking meters. What a waste of an apprenticeship!

        The amount of money that goes through these solar companies… you’d think the rebate was almost worthless, as I do the invoicing… Though I suppose, they are all quite greedy so and so’s from South Africa…

  5. Thanks for all your comments folks. Interesting how the theme of personal responsibility and small scale domestic systems shines through as the future! Following this a bit further, does anyone see community solar as trumping larger scale developments? Particularly in the midst of the current “slash and burn: mentality of anti-renewable sentiment in our current federal government? Love to hear your thoughts.

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