Give solar credit

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Wednesday 4/6/2008 Page: 98

A SYSTEM of credits could help give Australia's solar energy industry the stability it needs to grow, a Melbourne climate change expert believes. The Howard Government's pre-election offer of $8000 for households installing solar power panels had the desired effect of lifting sales, boosting production, increasing jobs and investment in the industry and leading to prices dropping by about 10 per cent. But suppliers say between 70-80 per cent of their former customers were rendered ineligible for the rebate when the Rudd Government restricted it to households earning under $100,000 in its first budget last month.

One Melbourne company said potential customers cancelled orders worth $500,000 the day after the budget announcement and others have already laid-off trained installers and other staff. Rupert Posner is the Melbourne-based Australian spokesman for the Climate Group, an international not-for-profit group that works with businesses and governments to address climate change. He believes the success of the rebate scheme inevitably led to its downfall.

"The core problem with the rebate scheme has been its stop-start nature; once it is successful it costs too much money." The solution, he believes, needs to combine emissions trading - putting a price on the environmental cost of producing energy - with a program to stimulate the solar industry. He suggests offering energy production credits to households installing photovoltaic cells, credits that could then be sold to power retailers.

"Electricity retailers already have to buy power from wind or solar power producers to meet the 20 per cent renewable energy target, so you could use this scheme to reward those investing in solar panels." Mr Posner suggests this support could be wound back as the industry became more efficient, so solar was competing on an even field by 2020. He said modelling showed that a scheme like this could see 100,000 households a year signing up by 2020. "It needs to be a policy that delivers transformation," he said,"not just a rebate that makes a few people feel good'.