Climate Action on the Agenda, But so are Cuts to Solar Support
Posted: 19 Nov 2014
Last year’s G20 Leaders’ Summit in Brisbane demonstrated that, try as he might, Prime Minister Tony Abbott can’t place addressing climate change on the backburner in international forums. But observers have noted that doesn’t mean solar subsidies are safe from his anti-renewables campaign.
Since assuming office in September 2013, Tony Abbott’s record on climate change mitigation policies has been clear. While not openly denying the existence of climate change, Prime Minister Abbott has made attempts to close the Climate Change Commission, and defund the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC). His most recent anti-renewable energy action has been to attempt to wind back the Renewable Energy Target (RET), and through this cut, government support for rooftop solar.
The negotiations between the government and the Labor opposition about cutting the RET have now ground to a halt, but that’s not to say subsidies for solar are safe. The Abbott government has turned to Labor in an attempt to get cuts to the RET through the Senate, where it is being blocked by the opposition and minor parties including the Greens and the Palmer United Party.
There’s been support and lobbying in support of “household solar” support elsewhere as well. John Grimes, the CEO of the Australian Solar Council has run what appears to have been a successful campaign in key federal marginal electorates, through a series of Save Solar rallies. Grimes has attracted support from the major opposition parties and has been well backed up financially from within the solar industry.
Grimes argues that while some comments from the government have seemed to indicate that solar subsidies are “safe” from cuts under a reduced RET, the opposite is in fact the case.
“The Abbott Government remained intent on targeting rooftop solar in the Small-Scale Renewable Energy Scheme (SRES),” said Grimes the day Labor pulled out of negotiations with the government.
“The plan was to cap the SRES (leading to an annual boom and bust cycle), rapidly phase out the scheme, and lower the threshold from 100 kilowatt (kW) to 10 kW, all of which would decimate the solar industry, and lock Australians into higher power bills.” The average Australian rooftop solar installation is around 4.5 kW.
Despite this apparent reprieve for solar subsidies, there is considerable pressure on both the government and Labor to find a compromise to the RET issue and provide “certainty” for the renewable energy industry. Literally tens-of-millions of dollars worth of potential wind and solar projects have been stalled as investors remain unwilling to commit funds when it’s not known what Australia’s RET will be going forward. And the calls for some kind of resolution are coming from both sides of politics.
Earlier this week Tasmania’s Minister of Energy Matthew Groom issued a statement saying that it is “extremely disappointing” that negotiations regarding the RET have stalled. “The renewable energy industry needs certainty,” said Groom. “The [Tasmanian] Liberal Government has advocated strongly for retention of the Renewable Energy Target scheme.”
So what could a compromise look like? Labor seems unlikely to agree to the government’s terms that it wants to see the RET reduced to a “real 20%” figure, which in effect would mean a dramatic cut. The Australian Solar Council and Labor have described such a cut as being potentially “devastating” to solar. But it could agree to a smaller reduction and adjustments to programs that operate under the RET.
The rooftop solar scheme could be maintained in name, but the size of subsidy for each array reduced. At present there are sizeable subsidies available to households that want to go solar. Paid out according to size of installation, subsides are worth around $2,500 for a more-or-less average sized solar array. This subsidy could be cut in half or more, which has previously occurred, so is not beyond the bounds of reality.
The size of solar arrays qualifying for the subsidy could also be limited or even a ceiling on the number of solar arrays subsidized put in place. These are all options the Industry Minister Ian Macfarlane and Environment Minister Greg Hunt could be considering as it looks to bring a new proposal to Labor. And it would all mean more expensive solar for Australian households and businesses.
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