Solar panel industry pleads for help

Sydney Morning Herald
23 April 2011, Page: 1

COMPANIES that install rooftop solar panels have warned the federal government the industry is on the verge of collapse because of a slump in the value of Renewable Energy Certificates. The industry is calling for certainty so it can offer the panels at a set cost, not one that depends on the wilting price of the small scale technology certificates. As the price of certificates falls, so do the rebates that keep down the consumer's cost. In January it was $37; now it is $31.

One installer, West Coast Solar, said a flood of cheap certificates for small scale renewable energy projects was forcing it to turn away customers who had already paid deposits. "This makes the whole industry look bad and brings the type of debacle the home insulation program resulted in", a spokesman, Jay Funnell, said in a statement. "If the industry cannot effectively promote and sell their products at a reasonable price, the industry will be decimated".

The government said it would work to avoid a boom bust cycle, including limiting the issue of new certificates which this month were being produced at the rate of more than a million a week. It is also considering limiting rebates to households that buy larger and more efficient solar panels generating 2 or 3 kilowatts, rather than the present standard of 1.5 kilowatts.

From January 1 the scheme was modified so that certificates were issued for household scale projects, and separate ones for large scale projects. Four extra certificates "phantom credits" were issued for every MW of renewable energy generated, despite warnings that this would deflate the certificate price.

The federal opposition said the government needed to move urgently to steady the certificate price. "There is looming evidence of a potential solar crisis but the federal government has ignored this evidence, just as it did with the problems in the home insulation program", said the opposition spokesman on climate action, Greg Hunt. "The government's generous 'phantom credits' scheme for solar has cooked the market, and the solar quota is likely to be filled within months, causing the industry to go from bubble to bust".

The Climate Change Minister, Greg Combet, said the Coalition and the Greens had supported the changes in January. The boom was also fuelled by the high Australian dollar by state solar panel tariffs. "The government has been monitoring the growth of the industry closely and will continue to consider how best to support [it]", he said.