Tuesday, 17 May 2011

Right answer, wrong reason: Solar industry

05 May 2011

Household solar power must not be used as the scapegoat for electricity price rises, despite adjustments to Solar Credits arrangements announced by Government today being a necessary and sensible decision. Matthew Warren, the Chief Executive of the Clean Energy Council, the peak body for the clean energy sector, questioned the justification for the announcement.

"For some time now the Clean Energy Council has been concerned about the stability of the solar market. We have been consulting with industry, analysing the market and talking to Government. We acknowledge a reduction in the solar credits multiplier for next year will help create longer term certainty for the industry", he said. "This decision has nothing to do with rising electricity prices, and everything to do with supporting an industry of the future. That's why any job losses in this industry are the worst kind of job losses. "So it's a necessary change, but it will hurt", he said.

Mr Warren said the positive aspects of strong demand for solar technology by Australian families should not be lost amid policy uncertainty. The truth is Australia loves solar. It is a technology that gives families a way of protecting themselves against rising electricity prices", he said. "Electricity price rises are mainly driven by the need for critical investment in network capacity. Painting solar as the problem child is misguided and out of step with what Australians are telling us through their purchasing decisions.

"Yesterday we released data for solar installations across Australia as a percentage of eligible households. It shows the idea that solar is the province of inner urban elites is a myth. People in regional communities, working class suburbs and coastal villages are all signing up. Australians from all walks of life are embracing this technology".

Mr Warren said there is the real risk that this industry could be a victim of its own success. "The SRES Scheme is designed to be an uncapped incentive for households to install solar. Australian households have responded exactly as the policy intended. "What has been done today is an effort to correct a flaw in the market design, not to control electricity prices that are barely affected by this program".

Mr Warren said the solar industry had weathered years of stop start policy from state and federal governments. "It is appropriate that support is adjusted as the cost of solar power systems continue to fall. But the minimal time available for business planning will mean that small businesses in particular will struggle to ride the wave of rising and falling demand as a result of this decision.

"This will lead to pain for some solar installers. These are business people who have taken a significant financial risk, they have real skin in the game". "Current market pressures are the result of a number of local and international factors occurring simultaneously. They might not equate to a permanent shift in conditions", he said.