Brumby's solar scheme a dud, say state officials - Secret memo blasts subsidy plan

Age
Thursday 29/1/2009 Page: 3

SENIOR state bureaucrats have attacked the Brumby Government's subsidy plan for household solar panels, saying it won't work. In a confidential memo, high-ranking officers of Victoria's Department of Sustainability and Environment have told Environment Minister Gavin Jennings that the proposed scheme would do nothing for photovoltaic (PV) solar panel numbers in Victoria. "The uptake of the PV systems will be no greater than ... would have occurred under the status quo," says the terse memo by officers, including environmental policy and climate change executive director Fiona Williams.

The memo is a response to last year's cabinet decision backing a limited subsidy system for households that install small solar systems, known as a "net feed-in tariff". The memo forecasts that under the Government model, only 10,000 solar systems would be installed by 2020, the same as expected with no subsidy. This compares to 70,000 systems under a more ambitious scheme rejected by the Government.

The memo undermines figures used by Energy Minister Peter Batchelor to reject the more ambitious scheme. known as a "gross feed-in tariff". Mr Batchelor argued that such a scheme would cost households $100 a year, making it too expensive and unfair to low income people without solar panels. But the department memo puts the real cost per household at a maximum of $7 a year.

The figures in the memo are based on modelling by consultants McLennan Magasanik Associates. The modelling was commissioned by Mr Batchelor's Department of Primary Industries but never released. Under the more ambitious model, households, businesses, farmers and community groups would receive a premium payment, well above the standard electricity rate, for all renewable power they generate, including what they use themselves.

By contrast, the scheme chosen by the Government will provide premium payments only to households, and only for surplus power fed back into the electricity grid after they have used what they need. The Age has repeatedly asked Mr Batchelor if he stands by his figures and how he arrived at them. He has refused to answer questions.

Last night a spokeswoman, Emma Tyiner, restated the view that a gross scheme would be unfair. "The Brumby Government has developed a net feed-in tariff that will give generous returns to people who install solar panels without imposing unfair costs on those who cannot install them," she said.

Revelations that the proposed scheme may be ineffective, and that the costs of the alternative gross scheme had been exaggerated, have led to calls for Labor to rethink its plans, to be detailed in Parliament soon.

The Government's own Sustainability Commissioner, Ian McPhail, is among those backing the alternative gross scheme. "My personal view is to encourage the Government to reconsider its policy on the net feed-in tariff, which provides unintentional protection for the existing coal-fired generators," Mr McPhail said.

Environment Victoria campaigns director Mark Wakeham, said it was ironic that doubts about the solar scheme had surfaced amid a heatwave. "Instead of putting our powerful sun to work, the Brumby Government has caved into polluter interests by continuing with a business-as-usual approach," he said.