Uncertainty clouds solar company's future

Age
25 August 2011, Page: 2

A BRITISH solar power company says it will scrap plans to expand into four regional Victorian centres, creating up to 120 jobs, if the Baillieu government substantially cuts a household subsidy scheme for rooftop panels. Mark Group chief executive Rob Grant said a decision to open offices in Geelong, Ballarat, Bendigo and the Latrobe Valley had been put on hold until the announcement of changes to a program that pays households a premium rate for energy fed into the power grid.

A plan to hire about 100 electrical, installation and sales staff for his Melbourne office based in Tullamarine had also been delayed. Electricity companies in Victoria pay households 600 per kW generated, but the premium rate is limited to the first 100 MWs installed. That threshold has nearly been reached. The Baillieu government is yet to announce the scheme's future, but says it is considering "interim policy measures" to apply into next year while the Victorian Competition and Efficiency Commission examines the situation.

Mr Grant said Mark Group opened its Australian operation in 2009 after being courted by government agencies, including the federal government's Austrade and Invest Victoria. He said attempts to build the business had been frustrated by uncertainty over whether renewable energy programs would survive. The company employs 25 people in Victoria.

"There is a burgeoning green-collar industry being created here and we want to invest and employ, but we need consistent policy for it to happen", he said. "I think anything below a tariff of 40¢ is probably going to be problematic. If the scheme is significantly changed, the regional operations will not go ahead and the growth in Melbourne will be significantly curtailed".

Opposition energy spokeswoman Lily D'Ambrosio accused the government of stifling investment and killing new jobs. "It is a sad day when one of the world's largest renewable energy companies looks set to abandon Victoria because of the Baillieu government's dithering on solar", she said. A government spokesman said it was aware businesses needed certainty. He said the commission inquiry would focus on ensuring future feed-in tariffs took a "sustainable and economically responsible approach".

The Mark Group warning comes amid a wider debate about solar feed-in-tariff schemes, which are usually paid for by all households through increases in electricity bills. Federal Climate Change Minister Greg Combet has said solar subsidies should be wound back once a carbon price was introduced as they were an inefficient and at times inequitable way to cut greenhouse gas emissions.

The new New South Wales Coalition government closed what was widely considered an overly generous scheme that paid for all power generated, whether used at home or fed into the grid, triggering what the industry says has been a collapse in demand for panels. Western Australia recently ended its scheme once it reached its cap. In Victoria, the cost to household power bills of the premium scheme is capped at $10 a year. The Clean Energy Council has called for it to be continued for two years, possibly at 35¢-40¢.