Solar rebates go sky high - Government hands out $150m

Sun Herald
Sunday 19/10/2008 Page: 3

THE national solar panel rebate for Australian homes is so popular that the Federal Government has handed out $150 million - the equivalent of three years' funding - in 16 months. Only four months into this financial year, the bucket of money put aside to subsidise solar panels is empty. However, Federal Environment Minister Peter Garrett said the Government would continue to fund the initiative out of next year's budget. High demand has meant that approval for rebates takes two months as bureaucrats in the Environment Department find themselves swamped by applications.

Householders can claim rebates of up to $8000 to install solar panels. But the solar industry is claiming millions of dollars in investment are at risk because the future of solar rebates and alternative methods of subsidising solar panels are unclear. The industry is pushing the Government to scrap the rebate in favour of a feed-in tariff based on the generous German model. A feed-in tariff is a payment people receive for the electricity generated by their solar panels.

The solar industry no longer prefers a rebate because it is a measure that is subject to government whim and will become increasingly unnecessary as the upfront price of panels starts to fall, which is expected in the next two years. The Clean Energy Council, speaking on behalf of the solar industry, said a feed-in tariff would provide a locked-in return for purchasers of solar panels and better underpin the industry. The Government is looking at a national feed-in tariff but already the states are moving on different models.

No progress was made on the issue at a recent meeting of State and Federal governments. "We are a company that is growing around the country," Richard Turner, chief executive of Zen Home Energy Systems, said. "We have $60 million of investment subject to some sort of rebate or tariff. We can't understand why the Government has not come up with some sort of announcement about the next step. "Are they prepared to let the solar industry in Australia collapse?" Shadow minister for climate change Greg Hunt said the Government had stalled on its promise of a national feed-in tariff and should guarantee that the rebate scheme will not be abolished. "The Government's solar policy is in disarray and the industry had been left in financial limbo," he said.

But Mr Garrett said the popularity of the solar rebate had proven wrong Mr Hunt's claim that a means-tested rebate would kill the solar industry. In this year's budget, the Government changed the rules to prevent households with incomes above $100,000 from receiving the rebate. Mr Garrett said the Government's next move to support solar would be part of a "comprehensive approach" to tackling climate change. He said he was working through stakeholder responses and considering solar in the context of the national energy efficiency strategy and the Government's response to the Green Paper on emissions trading.

Mr Garrett said there were plenty of opportunities for the solar industry, including 2500 applications to put solar panels in schools. Under the new means test, solar panels have continued to sell well but anecdotal reports from suppliers indicate that people can afford only to buy smaller systems. Mr Garrett said the popularity of solar panels was being driven by an increasing awareness of climate change in the community and a greater interest in renewable energy.