On November 16th, the Climate Change Minister Greg Combet announced that the solar credits scheme will stop at the beginning of next year.
The Solar Credits scheme was a mechanism which increased the number of Small-scale Technology Certificates (STCs) for the first 1.5 kilowatts of grid-interactive systems (or the first 20 kilowatts of eligible stand alone solar systems).
While the announcement came as a surprise to many in and outside the solar industry, it is not the first time the government has modified a successful scheme prematurely. While there is no evidence to suggest that the Renewable Energy Target (RET) - 20 per cent by 2020 - is within definite reach, the election year definitely is.
'Scrapping the subsidies will ease pressure on power prices and place the [solar] industry on a sustainable footing', Mr. Combat said. It is noteworthy that the Minister for Climate Change puts emphasis on a 'sustainable footing' for our industry, but omits to address the billions of dollars of federal (and state) subsidies that flow into unsustainable technologies. The whole mining industry receives a subsidy in the form of a tax rebate on the diesel that fuels the trucks and machinery. This $2 billion a year subsidy alone amounts to $87 annual contribution from every Australian.
All types of renewable energy rebates and incentives seem to be short lived. The various feed-in tariffs and Solar Bonus Schemes, the Photovoltaic Rebate Program (PVRP), the Solar Homes and Communities Plan (SHCP) and now Solar Credits have come and gone. All of those schemes resulted in more PV installations and therefore in measurable outcome. But none of the schemes actually turned the tide. The majority of Australians still believe that we must use fossil fuels to power this nation. Some claim that coal is on its way out but that is only because it is being replaced with (non-renewable) gas.
We need a scheme that puts thoughts in people's heads, not money in their pockets.
However, Solar Credits may still be payable where:
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- a contract to purchase was signed before November 16, 2012 AND
- installation is finalised by June 30, 2013.
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- a contract to purchase was signed after November 16, 2012 AND
- installation is finalised by December 31, 2012.
Furthermore, larger systems are not really effected by this announcement as STCs are still available without the multiplier for systems of up to 100 kw. They are still worth $600 per kw = $60,000. In fact, larger solar systems still receive a similar rebate as they did 3 years ago, but now only cost half as much.