Federal budget announcement offers a mixed bag

15th May 2013

With the May 14 announcement of the federal government's budget, tongues have been wagging about its various increases and cuts in funding the subject of inevitable debate.

The implications of the funding decisions for the future of clean energy, and therefore solar power, are mixed.

One positive of the budget announcement is that funding and support for the government's Clean Technology Investment Program remains strong, and $160 million in funding will actually be brought forward to meet the predicted peak demand for the program in 2014-15.

"This is a great stimulus for manufacturing, which is facing difficult circumstances with the high Australian dollar and intense global competition," said minister for climate change, industry and innovation, Greg Combet.

"The Gillard government is committed to a strong Australian manufacturing industry, and investing in clean technology is a great way to drive improvements in productivity, energy efficiency and competitiveness," said Mr Combet.

The Clean Technology Investment Program is a great mechanism for converting manufacturers and various industries over to renewable technology such as like the likes of solar panels, and helping to fund new energy efficient capital equipment and more efficient manufacturing processes.

Both the businesses themselves and the environment benefit, as savings are made on energy use and therefore energy bills and costs are not as high. 

So far, 222 projects have been supported by this government, amounting to $121 million in funding, which increases to $338 million of investment when taking into account the co-investment that has been provided by the private sector.

The projects from the program which have already been announced are expected to save over $30 million per year through their energy conservation and greater business productivity.

As well as this, almost 25 per cent of these projects are achieving a hugely significant rate of over 50 per cent reductions in their carbon emissions intensity.

In contrast to the support for this program, the budget for The Australian Renewable Energy Agency (ARENA), Australia's independent commonwealth authority on renewable energy technologies and innovations, has been cut.

According to Giles Parkinson, writing for RenewEconomy, ARENA has had its funding cut by around five per cent, with a further $370 million deferred to after 2020. This reduces ARENA's total budget from around $3.2 billion to just over $3 billion.

Posted by Bob Dawson

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