Garrett pulls plug on solar - Stampede for panels as rebates set to end

Age
Wednesday 10/6/2009 Page: 1

TENS of thousands of households will miss out on an $8000 solar panel rebate after the Federal Government abruptly ended the program three weeks early. The Government's decision left solar retailers scrambling to push through thousands of rebate applications yesterday after they were given just eight hours' notice that the scheme would be finishing prematurely.

From today the rebate will be replaced with a far less generous solar credits scheme that solar retailers say will typically net Victorian households about $4000 for a 1kW solar panel system. This will be reduced over time to about $800. A 1kW system typically costs about $12,500. But while the new scheme offers less cash back, more people will be able to access it because it will not be means tested and small businesses will not be excluded.

Environment Minister Peter Garrett blamed the sudden decision on a cost blowout, from an original estimate of $150 million to $750 million a year, due to its unexpected popularity. Mr Garrett set aside a further $271 million in the May budget to fund the rebate scheme until June 30, but it is understood that money has been almost entirely consumed by 30,000 applications in the past month.

Mr Garrett said there was a backlog of 63,000 solar systems to be installed under the $8000 rebate that will take the industry a year to fulfil. Opposition environment spokesman Greg Hunt said the rebate scheme was a victim of the $58 billion budget deficit. "The Government has again sent the solar industry into chaos with this ill-thought-out move," he said.

While solar retailers had been expecting the scheme to finish early due to oversubscription, many of those contacted yesterday were angry they had been given only until the close of business yesterday to send off customer applications. Chris Fernandez, of Abbotsford-based retailer State Solar Services, said his employees were scrambling to post 4000 applications before last night. He said up to 1400 people who thought their applications had been lodged might miss out because they would not be posted in time.

Solar Shop Australia managing director Adrian Ferraretto said his company was processing 1000 applications yesterday. "If we had another week we would probably be sending off 5000 applications," he said. Mr Ferraretto was only a little surprised by the abrupt end given the rebate had been oversubscribed, but said the Government's handling of the issue had been "less than perfect". "They promised there would be a smooth transition. Today is not a very smooth day," he said.

Simon McCloskey, of Surrey Hills, had been putting off signing on for the rebate but rushed in yesterday afternoon after learning the scheme was about to end. "I was a bit puzzled: why cut it off three weeks early?" Clean Energy Council chief executive Mathew Warren said the council would help retailers deal with problems created by the Government's decision.

Yesterday's announcement means the Government is starting the new solar credit scheme before legislation is passed through Parliament. Mr Warren said it was now important that the renewable energy target, which includes the solar scheme and requires that 20% of all energy come from clean sources by 2020, be passed when it is introduced next week. Both the Greens and Opposition are sympathetic to the policy, and are likely to support it.