Grab for green votes to make us pay while sun shines

Sunday Age
Sunday 5/7/2009 Page: 17

Victoria's solar energy feed-in scheme is built on empty promises, says Mary Aldred.

Solar energy would be great if it actually worked. And while state governments are falling over themselves to put up renewable energy schemes, taxpayers aren't getting a return on their money.

While the Federal Government has lost support over an early exit from its solar rebate scheme and the Senate has delayed the emissions trading bill, state governments have shot off on their own strange climate tangents. Instead of slashing emissions and boosting a self-sufficient industry, the schemes are a costly grab for votes. Put simply, state governments are throwing your money at feel-good schemes and empty promises.

For instance, the Victorian premium solar feed-in tariff is the latest on a list of State-inspired climate measures mined at encouraging uptake of renewable energy This Government reckons customers will reduce their average yearly electricity bill by about $600 under the scheme.

So far it's just numbers on paper, as green groups and industry slog it out over two models. The first- a "net" scheme- would see householders paid for unused solar-generated electricity that is fed back into the grid. But green groups are demanding a second "gross" scheme, under which householders would be paid for the electricity they use.

Since when were governments in the business of paying people for what they consume? Where would the extra money needed to pay for a "gross" feed-ht scheme come front? You guessed it: taxpayers. Although the details might be hazy, throw in the "climate change" bogie and Victorians are expected to cough up the dough. It is fiscally negligent of any government to force already struggling families to subsidise the solar energy consumed by other people who can afford their own solar panels.

Solar is largely a lifestyle choice that makes people feel good about their environmental morals, and any emissions cuts are minimal compared to what will be achieved under an emissions trading scheme. Emissions trading will also create a market for new energy technologies such as solar.

Those that can produce low emissions energy at the cheapest price will thrive. But that's not how state governments across Australia are playing it. The current schemes artificially prop up weak industries by creating government subsidies they can fall back on. And small, state based climate schemes, such as solar feed-in tariffs, wont even make a dent in Australia's greenhouse gas emissions.

After decades of economic reform by both sides of politics to wean industry dependence, it beggars belief that some sections of renewable energy are considered a special case for rent-seeking by state governments. Not only do the economic arguments not stack up; it gives viable sections of the renewable energy industry a bad rap.

Since grabbing for green votes has become a popular sport, state governments have been unable to resist introducing a wide range of ad hoc, overlapping legislation that doesn't do much except cost taxpayers a lot of money. Putting the focus back on cost and what works, the question that needs to be asked is: do these schemes warrant the huge cost? The clear answer is no.

Recently, NSW announced it would go ahead with a near identical feed-in tariff to the one proposed for Victoria. Yet it will return nearly $300 more to its householders than the Victorian scheme. Victorians have a right to ask why they deserve less than people living in an economic rust-bucket north of the border.

A national solar feed-in scheme was recommended by the 2008 Council of Australian Governments meeting for its consistency and to give badly needed policy certainty to the industry. On that basis alone, state-based schemes should be abolished in favour of a national scheme from which every Australian can benefit equally.

The problems with state-based climate policies that overlap a national program are the extra level of regulatory and cost burdens on industry; no extra benefit for consumers; and zero extra emissions abatement.

Complementary climate measures that support emissions trading play a role - but not when they are two government layers thick and poorly designed. State governments need to look beyond drowning consumers in a quagmire of green tape that they are forced to bankroll. At the moment, it's just window dressing for votes, with no real value.

Mary Aldred is an energy industry consultant.