Government support 'needed for commercial solar development'

16th Nov 2012

It's been a week in which commercial solar projects could be seen to have taken a battering – and the chief executive officer (CEO) of one industry organisation claims government support is essential for the sector to succeed.

The Australian Renewable Energy Agency (ARENA) revealed on Monday (November 12) that it would be pulling out of financial support for two large scale solar schemes that were part of the federal government's Solar Flagships program.

Miles George, CEO at Infigen Energy, told Renew Economy this is indicative of a wider problem in Australia, where backing from the authorities appears to be less enthusiastic than in countries abroad.

Citing the US as an example, he highlighted how the nation's federal government has locked in tax credits for sustainable pursuits until 2016, while also offering state incentives such as renewable energy obligations and mandatory percentages for solar usage.

"In that environment, solar PV is being built rapidly, in 20-50 MW pieces," he stated, but noted that Australia is failing to approach the issue in a similar manner.

And Miles believes this will have a considerable impact on commercial solar PV's contribution towards the Renewable Energy Target (RET).

So what percentage of the RET will be made up by large scale solar in his opinion? Well, it will all depend on whether ARENA will put its hand in its pocket, he said.

"If someone in government wants solar PV built, they have to offer something more," the expert commented.

"Our view is that solar PV in utility scale will not form a big part of the target – maybe a few hundred megawatts, maybe a thousand tops."

Despite solar power costs tumbling in recent years, the expert continued, it is still not as cheap as wind energy.

Not only this, but even if commercial solar continues to grow over the next five or so years – it won't leave a lot of time to actually develop plants and make them functional in time for 2020, he added.

However, Miles was quick to point out how encouraging it was that the Climate Change Authority (CCA) would be maintaining the current RET structure.

The organisation revealed in a preliminary report that while it may cause electricity prices to go up, the damage to investor confidence would be more severe.

"We were very much relieved and supportive of the CCA recommendations," Miles stated, adding that the announcement was "music to our ears".

Posted by Bob Dawson

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