Rebate Rage: The Battle To Save Victoria’s Residential Solar Industry

Victoria solar energy industry crisis

Workers are being laid off and solar businesses are closing their doors in Victoria. Solar buyers, system owners and the Victorian community in general should also be worried as the crisis will have some serious knock-on effects.

To very briefly summarise the situation to date:

  • The Victorian solar panel rebate was suddenly paused in April. Sales dropped off as buyers waited for its return.
  • The program re-opened on July 1.
  • The rebate was paused on July 3 as the quota for the month (3,333 rebates) was quickly snapped up by pent-up demand. Many missed out.
  • Sales have plummeted again as Victorians wait for the next round.
  • The next release of rebates is August 1, which are expected to be quickly exhausted.
  • It may remain a rinse-and-repeat situation for months to come.

The stop-start nature of the rebate along with the administrative burden associated with what’s essentially become a complex click-frenzy exercise could kill the Victorian residential solar industry; or a good part of it.

The Impact On Solar Businesses And Staff

In a webinar run by the Smart Energy Council yesterday, instances were provided of solar businesses in Victoria already laying off staff and closing down – or are soon to. Some of the examples of business owners impacted:

  • Jack – Usually installed 10 – 16 systems a month. No installations since April and he can’t even log into the Solar Victoria portal, a situation that has been going on for two weeks.
  • Peter – Historically installed around 80 systems a month. Since April , just one installation.
  • Josh – Employs three installers. Josh is closing his business at the end of July and is receiving support from Beyond Blue.
  • Elias – Employs 10 staff. 2 were laid off on Monday and the rest are just a matter of weeks away from losing their jobs.
  • Glen – Employed 7 staff. Usually performs 40 installs a month. His business submitted 22 applications for the July rebate release and only 5 were approved. Glen’s business will run out of money by the final week of July. Two installers and a salesperson have already been laid off, the rest are to follow next week.
  • Tom – Has laid off eight staff.
  • Jason – Had 9 staff, laid off 2 two and carrying the remaining 7 has cost him $90,000 in the last 3 months. His house is on the line.
  • Gus – 10 years in the industry and 2 full time staff that he’s had to lay off. 30 rebate applications submitted for July’s round, 4 approved.

Smart Energy Council CEO John Grimes said he had heard dozens of other similar cases.

Even if a business lays off staff and somehow manages to survive, once good people are lost it can be hard or impossible to get them back. As for the staff who have lost their jobs, some may find work elsewhere but others potentially face long-term unemployment, relationship breakdowns, loss of homes – and the list goes on.

The Impact On Solar Buyers

It’s important to note this situation is negatively impacting many very good installers. If the Victorian solar industry is pretty much laid to waste, this will decrease competition and choice.

The very competitive and complex nature of the rebate program application process is also causing problems for some who are not tech-savvy; creating barriers to participation by those who could perhaps benefit the most. Given the competition for rebates and the maximum household annual income threshold of  $180,000, again, some who could benefit the most from slashing their electricity bills with solar power are missing out.

The Impact On Solar Power System Owners

If you already have a system installed, you may be breathing a sigh of relief. But what will happen if your installer goes out of business and you need support or have a warranty claim? It’s very much in the interests of all Victorian solar power system owners to see the rebate situation fixed as soon as possible.

What Does The Victorian Government Say?

Despite the rapidly mounting evidence of the damage being done to the industry and those who work in it, the Victorian Government appears somewhat oblivious to the problems it has created. The Andrews Labor Government still seems convinced the program is solid and is yet to realise it has its foot on the accelerator and the brake at the same time.

As mentioned on Monday, Energy and Solar Homes Minister Lily D’Ambrosio said in comments emailed to RenewEconomy there were no plans to change the eligibility criteria for the program. The following day, Minister D’Ambrosio was still holding that line according to Mr. Grimes:

“There will be no change – in the number, the rate or the thresholds of the program.”

However, Mr. Grimes said Minister D’Ambrosio mentioned she was open to conversation with the industry regarding “transition funding” for those businesses experiencing difficulties. But it shouldn’t have come to this.

What Needs To Be Done?

It’s a pretty sad state of affairs when many in the Victorian solar industry say it would be better off without the rebate. Other suggestions include decreasing the maximum household income threshold and/or decreasing the rebate amount; the latter allowing for the monthly quota to be boosted.

With regard to the clunky and intrusive application process that includes applicants needing to tussle with facial recognition software, Mr. Grimes suggests replacing that aspect with the provision of a rates notice and signed statutory declaration from the homeowner.

But before anything can be done, the Andrews Labor Government first needs to acknowledge there is a problem and commit to fixing it.

It will become harder for the Victorian Government to ignore the situation if there is enough protest against it. Solar installers, prospective buyers, system owners and the Victorian community in general should communicate their concerns and experiences to Premier Andrews and Minister D’Ambrosio and/or via their local MPs.

With negotiations to change the nature of the rebate pretty much at a standstill, the Smart Energy Council is now quickly gearing up for a significant campaign to raise awareness, and will continue to apply pressure on the Victorian Government.

——
UPDATE 5.10pm: The Smart Energy Council has called a Victorian Solar Industry Day of Action for next Thursday 25 July – more details.
——

Sadly though, for some in the industry, it’s already too late.

Below is the full Smart Energy Council Victoria Solar Homes Program – Next Steps webinar. It’s well worth watching to gain a better idea of the scope and ramifications of the crisis faced by the industry – and what can be done.

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. OldCynic says

    Stand back for a moment and look at what we have here.

    We have an industry (and I use the word loosely) that exists only because of government subsidies. Despite 20 years of solar and wind boosters claiming that intermittent power is going to provide reliable, cheap energy ANY DAY NOW, it has not happened.

    Wind is increasingly been revealed as visually and auditorily polluting, killing birds, proving a threat to aircraft and draining the coffers of gullible state governments.

    Solar ? Increasingly threatening the stability of the grid.
    Like wind, commercially viable only by doling out the taxes paid by long-suffering rate-payers, supplemented with “solar rebates” which are funded by the increased electricity prices paid by the unemployed and working-class poor who cannot afford to take advantage of this massive exercise in misplaced socialist redistribution: from the poor who haven’t to the middle class who have.

    Yes, there will be casualties among the tradies who have hitched their wagons to this golden opportunity, and at a personal level I’m sad for them.
    But if they had any sense they should all have realised that this was never a solid long-term business proposition; – eventually either everyone would have panels or the money to subsidise them would run out.

    Well, the latter has happened, so now it’s time to find some other source of employment.

    • Geoff Miell says

      OldCynic,
      I see you are still hiding behind a pseudonym rather than reveal your real name.
      See: https://www.solarquotes.com.au/blog/yallourn-coal-closure-mb1086/#comment-455395

      Why accept anything coming from someone who is not prepared to reveal their true identity? You say:

      “We have an industry (and I use the word loosely) that exists only because of government subsidies. Despite 20 years of solar and wind boosters claiming that intermittent power is going to provide reliable, cheap energy ANY DAY NOW, it has not happened.”

      Stated like a good little troll that you seem to be (to me). you don’t provide any references to back up your baseless assertions. But why let facts get in the way of ill-informed ideology, eh OldCynic?

      Yet Lazard’s UNSUBSIDISED LCOE analysis of generation technologies contradicts your baseless assertions. Clearly you didn’t bother to look at Slide 15 of my presentation (referenced in an earlier reply to you and repeated below):
      https://www.ipcn.nsw.gov.au/resources/pac/media/files/pac/projects/2019/05/ulan-coal-mod-4/public-meeting/presentations/geoff-miell-presentation-slides.pptx

      And the CSIRO/AEMO’s collaborative “GenCost 2018” report found:

      “Our data confirms that while existing fossil fuel power plants are competitive due to their sunk capital costs, solar and wind generation technologies are currently the lowest-cost ways to generate electricity for Australia, compared to any other new-build technology.”
      See: https://www.csiro.au/en/News/News-releases/2018/Annual-update-finds-renewables-are-cheapest-new-build-power

      Interesting that posted today at RenewEconomy there’s a warning about trolling on renewable energy and climate. Are you one of these trolls, OldCynic?
      See: https://reneweconomy.com.au/solar-industry-fights-back-against-surge-of-climate-trolls-on-social-media-45882/

      You then state:

      “Wind is increasingly been revealed as visually and auditorily polluting, killing birds, proving a threat to aircraft and draining the coffers of gullible state governments.”

      Again, no evidence/references to back these claims.

      If you are going to use the argument that we should be banning wind turbines because they kill birds, then to be consistent, OldCynic, road vehicles, aircraft and ships should also be banned because they kill many more animals. Tall buildings (and bridges) and other aircraft can be a threat to aircraft, so if we use your logic then we should ban tall buildings, bridges and all aircraft. But you aren’t about logic and reason, are you OldCynic, eh?

      You ignore the vast subsidies that the fossil fuel industry has been enjoying for many decades.
      See: http://theconversation.com/vast-subsidies-keeping-the-fossil-fuel-industry-afloat-should-be-put-to-better-use-119954

      The NSW Government sold 1320 MW Vales Point Power Station for $1 million to Sunset Power in Nov 2015. It now has a book value of $720 million and has made windfall profits (e.g. circa $90 million in 2017). And the NSW Government (and taxpayers) are still liable for remediation of the site when the power station ceases operations.
      See: https://reneweconomy.com.au/nsw-exposed-to-unquantifiable-liabilities-for-vales-point-decommissioning-documents-show-84435/

      IMO, that’s shameful privatising of the profits and socialising the liabilities. At the time the NSW Government promised that the sale of state-owned generator assets would lower energy prices. Instead, power prices have risen.
      See: http://www.tai.org.au/content/electricity-prices-consumers-get-short-end-big-stick

      You state:
      “Solar ? Increasingly threatening the stability of the grid.”

      Evidence, OldCynic, where’s the evidence/data? Regurgitating anti-renewable propaganda. More baseless assertions. Yet it’s the coal-fired generators that appear to be increasingly unreliable.
      See: http://www.tai.org.au/content/breaking-brown-gas-and-coal-plant-breakdowns-victoria

      Broadcast July 8, on ABC’s The Business, was an interview with Ian Dunlop, who said:

      “…the reality is that unless we start to recognise that climate change is the single biggest threat the world faces, and if we don’t address it, we actually are not going to have a viable economy, or a viable society.”
      See from time interval 04:07: https://www.abc.net.au/news/programs/the-business/2019-07-08/extended-interview-with-ian-dunlop/11290026

      OldCynic, it seems to me your comments continue to be ill-informed, and seem to be promoting a path towards chaos and decline.
      https://www.solarquotes.com.au/blog/sa-nsw-interconnector-mb1113/#comment-464068
      Perhaps you want our civilisation to collapse? Is that what you want, OldCynic? Is that perhaps why you hide behind a pseudonym?

    • BikeMike says

      OldCynic – so the renewables industry exists only because of subsidies? It does pretty well even in parts of the world where there are no subsidies.

      And in your old age you seem to have forgotten that the coal-fired power stations, and the rail lines serving them were built with 100% public subsidies.

      Where would the renewable industries be by now if it had been gifted 100% subsidies, rather than intermittent boom-bust ‘support’?

      It may also have slipped your mind that the estimated financial cost of premature deaths due to air pollution ranges from roughly $11 billion to $24
      billion per year (UNSW 2017)..? Much of that cost is subsidised too. Perhaps we should go work in hospitals now?

  2. Des Scahill says

    Old Cynic, I have to disagree completely with your one-sided logic.

    Yes, solar system purchasers DO get an initial subsidy.

    BUT, its also true that the instant they start exporting to the grid at any FIT rate that is lower than the kwh rate charged by their retailer they immediately start repaying that subsidy eg.. if they are exporting (say) 15 kwh per day, and the retailer is charging non-solar customers (say) 28 cents a kwh, then the solar system owner is thus subsiding the retailer at the rate of 13 cents per kwh exported.

    Multiplied by the number of units exported, this amounts to $1.95 per day, or $711.75 a year.

    STC credits on a 5Kw system are roughly $4,400, which means that the so-called ‘subsidy’ gets FULLY ‘repaid’ in 6 years, and for the next 19 years or so after that the retailer is on a gravy train. – 19x$712 = $13528. He’s going to get over $13500 in his hand for doing nothing, .

    Obviously the sums vary somewhat by state and retailer along with the energy plan selected. If for example you are only getting a 8 cent FIT, then the ‘subsidy’ you are donating to the retailer jumps to 20 cents per exported kwh, (or $3.00 a day) and $13,528 I’m referring to leaps to $20,800 assuming your’ charged 28 cents by the retailer,.

    If the retailer’s Kwh price rises above 28 cents then the free money they are getting from thousands of residential solar systems starts heading to stratospheric levels. Buying something for 8 cents and reselling it for 28 cents or more seems a good deal to me.

  3. Des Scahill says

    Slight correction to the above wording. I’ve assumed that initially the home-owner is getting a 13 cent FIT and also exporting 15 Kwh on average per day. .13 by 15 = $1.95 per day implied subsidy.

    • Des Scahill says

      OOPS – the home-owner is getting 15 cents FIT and exporting 15 KWH
      The retailer is getting 13 cents ‘subsidy (the difference between 28 cents and 15 cents) and thus making money at the rate of $1.95 per day

  4. Is it not the old conundrum, as I posted in another Solarquotes tread?
    Government must please stop “helping”, we cannot afford it.
    Just look what happened to childcare, FHOG and other initiatives.
    We also cannot support the Federal/state 2 tier government system anymore, but who is going to vote themselves out of a job? Not to mention jobs for the boys/girls. Maybe this is how government systems (including democracy) work, they all cave in under the weight of their own mismanagement in the end.

  5. Lawrence Coomber says

    Michael you have highlighted some very sobering stories happening in Victoria, and no one wants to hear of disruption to quality practitioners in any industry group.

    What is not clear though is what industry precisely are you referring to that is suffering in Victoria?

    Are you referring to the Australian Electrical Contractors Industry businesses; or Australian Retail Industry businesses?

    The Australian Electrical Contacting Industry is an acknowledged global leader of its type, comprising businesses formed from very solid commercial foundations, and made up of licenced and qualified electrical entities and professionals who are by virtue of their qualifications and licencing thru State and National Governments legislation, entitled to and capable of undertaking any electrical work (including solar installations of course) throughout Australia.

    They are of course also the sole Australian industry licenced and regulated by State and Federal laws entitled to install solar systems and have as a consequence been responsible for (directly or under their auspices) every solar installation in Australia to date (including those subject to a Clean Energy Regulator STC’s or LGC’s rebate application) and importantly there are no exceptions in law permitted to these national laws.

    Are these professional Australian Electrical Contractors the businesses you are referring to Michael, under a broader and uninterpretable term in your blog as: “Solar Businesses”?

    I don’t believe they are; because from all available evidence from recognised electrical industry groups nationwide, Electrical Contractors are going gangbusters and there is notably a recognised shortage of Electrical Contractors everywhere rather than industry surplus.

    The Australian Retail Sales Industry however (in all of its sub-groups) on the other hand are subject to different market forces to the professional skills services of which Australian Electrical Contractors / Engineers / Electricians (i.e. including Solar Installers) belong.

    It is worth emphasising the important distinction between Australian Licenced Electrical Contractors and Electricians and Australian Retail Sales businesses in all of their sub forms Michael including “Solar Businesses”; they are by definition entirely different business structures and entities and although they may interact with each other from time to time on a normal sub-contract basis, they are different industries.

    An Electrical Contractor may undertake “Solar Installations” within their broader scope of expertise, but a “Solar Business” by definition is not an Electrical Contractor (and Electrical Contractors rarely go out of business through liquidity or business work stagnation issues like those you have reported on in Victoria).

    We should also be mindful that the public records inform us that over the last four years over 600 Australian “Solar Businesses” have gone out of business due to liquidity issues; this contrasts with a miniscule number of less than 8 Australian Electrical Contractors who have left their industry through similar issues. Any business that exits an industry through liquidity issues invariably leaves behind a lot of mess for others to unwind.

    The Australian Electrical Contractor Industry is the industry responsible for all electrical works in Australia (including all Solar work) and operates within a very strict and highly regulated national and states-based framework underpinned by world class professional technical qualifications and strict corporate governance regulations. Importantly this structure has served Australian customers well for over 80 years.

    It is absolutely essential for the Australian public to have high confidence in their Electrical Contracting Industry, the equal of our other professional services industries such as the medical and educations industries, and we in the industry should do our best to represent it to our best ability.

    The Retail Sales Industry (in all of its forms) is a very important industry also, but it is underpinned by different motivations, imperatives and visions to the mainly long-term career minded professionals who make up the Australian Electrical Contractors Industry.

    These are important points worth thinking about.

    Lawrence Coomber

  6. The solar roller coaster

    Guy’s they should scrap the whole rebate scheme all together solar is already cheap enough , why have a program like this controlling the industry ups and downs .
    It is crazy scrap it ! who ever wants this is basically asking for trouble and a business model that is based on rebates is not a business that should be around to start with .

    CEC approved retailers is a scam full stop it is a money grab by the clean energy council to say you are good for the industry trust this retail , what garbage .

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