Doubts cast over solar rebate

Sydney Morning Herald
Wednesday 22/10/2008 Page: 5

A REBATE for solar panels is proving so popular there are concerns it could be axed or cut back. Households earning less than $100,000 qualify for an $8000 rebate from the Federal Government if they install roof-top solar panels to generate electricity. But an extraordinary surge in applications has led to the Climate Change Minister, Penny Wong, refusing to guarantee that the rebate has a future. She also refused to say if the rebate would be offered in three months' time.

The Government is receiving 30 times as many applications for the rebate as it budgeted for, a estimates hearing was told yesterday. Cheaper panels, special deals and concern about climate change have resulted in more than 1000 applications lodged each week. The Government only budgeted for 6000 installations for the financial year. In a controversial budget move, the Government opted to means-test the rebate to reduce demand. The Liberal senator Simon Birmingham told yesterday's hearing he was concerned the Government would take further steps to restrict the rebate as the applications flooded in.

Ross Carter, of the Government's renewable energy efficiency division, said the Government would meet demand - for now. "Future support for the solar industry will be considered in the context of the national energy efficiency strategy, and the Government's response to the [emissions trading] green paper," he said. Senator Wong repeatedly batted away questions about how long the rebate would continue for. Senator Birmingham said the hedging was concerning. "It's irresponsible," he said. "It is creating a lot of uncertainty in the [solar] industry." He said there was a rush for solar panels because people were worried about the rebate's future.

Senator Birmingham said he feared the Government would axe the rebate, reduce its value, or drop the income threshold for the means test. Government officials told the hearing they received just over 1000 applications for the rebate each week, and about 200 to 300 installation reports. They said the bottleneck could be caused by the solar industry and the Government struggling to keep up with demand.