Solar subsidy comes under fire

Age
Saturday 27/9/2008 Page: 11

A CONTROVERSIAL subsidy for household solar panels that divided John Brumby's cabinet faces a potential fight in the upper house, with all opposition parties damning it as too weak to be effective. The attack from both ends of the political spectrum has been echoed by the state's environmental sustainability commissioner in a draft copy of a government report. Ian McPhail's draft State of the Environment report, seen in part by The Age, says the Government's solar policy does not offer enough incentive for people to install panels as it pays a premium only for surplus energy fed into the grid - not energy used at home.

"All we're saying is, because of the abundance of the solar energy available, there should be positive encouragement to get the latest technology in place," Dr McPhail said. A similar view is held by key members of the Liberal Party, Nationals, Greens and Democratic Labor Party MLC Peter Kavanagh, who together carry 21 of the 40 votes in the Legislative Council. Under the Government's policy announced in May, households generating energy using solar photovoltaic systems up to two kilowatts in size will be paid 60 cents a kilowatt-hour, nearly four times the standard retail rate of 17 cents.

The issue provoked heated clashes in cabinet, with Energy Minister Peter Batchelor winning backing for a net feed-in tariff - a scheme that offers the premium rate for surplus energy only. Environment Minister Gavin Jennings had pushed for a gross tariff based on a German model, under which the premium is paid for all solar energy, whether surplus or used at home. Liberal environment spokesman David Davis said the Government's proposal looked weak, and called for a national approach to promoting solar energy.

Nationals spokesman Peter Crisp said he saw huge advantages in following the German scheme. "solar panels are saving somebody capital infrastructure in a new power station, they are saving the environment, so we've got to find a way to reward people for that. A net feed-in tariff doesn't do that," he said.

Greens MLC Greg Barber said net tariff would have perverse effects, making it more viable to put solar panels on buildings that used hardly any power, such as a shed or holiday home. But Dr McPhail sounded a note of caution. He said there were also legitimate arguments in favour of the Government's model, including higher costs under a gross tariff due to the need to install an expensive metering system.

Government spokesman Dan Ward said Victoria's legislation, to be introduced before the end of the year, would be one of the most generous in Australia. Queensland and South Australia both pay 44 cents a kilowatt-hour for surplus energy only. The ACT pays 59 cents using a gross model.