It is hard to reconcile the present government’s mismanagement of solar energy “policy” with statements made before the last election.
Prime Minister Kevin Rudd was elected because people believed he would make some sweeping changes. OK, so he ratifies, quick smart, the Kyoto Protocol. This is symbolic at best, but so far so good we all thought.
Before the election both Rudd and Peter Garrett could be seen wandering around kissing PV (photovoltaic) modules AKA “solar panels”. Babies were passé. Former Prime Minister John Howard, not to be outdone, did his own solar panel road show even though he never had any concept of solar energy.
But let’s take a step back. It hardly matters which element of the solar business you look at, government policy has been on, then off, then on again. Provide funding; withdraw funding; provide funding again; close the Energy Research and Development Corporation; withdraw funding.
This is the erratic on-off “policy” that so many solar specialists have bemoaned for more than 20 years. We could be talking about solar PV, solar hot water, or large scale solar thermal. It is the same story. Howard went against that grain by granting a $75 million hand out to one rather interesting PV company: at least he recognised that PV generates electricity and he got a big PR bang for that $75 million.
Fast forward to recent times. The renaming of subsidy and rebate schemes hardly matters: the Photovoltaic Rebate Programme (PVRP) became the Solar Homes and Communities Plan (SHCP).
We have two options for photovoltaics: a scheme to stimulate the installation of PV in remote (off grid) communities and a scheme to stimulate the installation of grid connected systems within cities. Both have been around for a while. Both are subject to the whims of political expediency and the heavy hand of Treasury. For example, the “means” test for household rebates was introduced this year with the cut-off at $100,000 a year income. The first (off grid) scheme has been axed apart from in Western Australia where there is some unspent money. The second awaits new legislation said to come forth in August. Maybe.
Meanwhile, if you are a business you can get a 50 per cent reduction on costs if you satisfy the Australian Tax Office (they, of course, would have a clear idea about PV suitability).
So where to now?
The concept of a national feed-in-tariff has come and gone into the depths of COAG and its committee process to ensure “harmonisation”. Last news was in WA when Premier Colin Barnett promised a 60 cent per kilowatt hour buyback rate for ALL solar production before he was elected. That then became a cash hand out for just the select few. It is clear to me that the proposers of tariff schemes have limited understanding of what a roof top systems can do. Last week the New South Wales Government announced a solar “bonus” scheme and claimed: "We expect the scheme to reward customers with around $900 annually - meaning an average solar panel system could be paid back within 12 years.” That’s nonsense. I have lived in a house in a sunny location where the total electricity consumption was about 5 kilowatt hours a day (that’s very low). There was a pretty efficient solar PV system that provided about that amount or less and I only ever saw dollar values in single digits on every electricity bill. And even I had the benefit of 60 cents per kilowatt hour instead the 18 cents it was for me, that's no real incentive. Worse still, household consumption nationally is at 15 - 20 kilowatt hours a day. There is a mismatch between supply and demand.
When more than 40 countries around the world have instigated legislation to secure such tariffs, it is hard to comprehend why Australia hasn’t. The costs of installations are actually spread much thinner and the taxpayer burden is less. The system is simple. You and I provide our own infrastructure that sends any excess electricity created back to the grid. Rather than just pay for the excess, the energy retailer pays for ALL such power. This, then, works better to stimulate a new renewable energy industry because there is then real value for the homeowner or business owner to invest in solar infrastructure. Moreover, the renewable energy industry has some certainty and security of tenure for investment. Just imagine a logistics company with 50,000 square metres of roof making money as a power station! This then begins to build a real offset to coal fired power stations, but this is obviously does not sit well with the coal industry.
The coal industry reigns supreme. It is rumoured that when Prime Minister Rudd came to power, he did not do what any sensible newcomer (for example, President Barack Obama) would do. That is, examine closely who the advisors are and who they in turn are connected with. If he had done so he would have found a group of people with firm connections to coal.
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