Changes to Solar Credits Scheme - Welcome News

5 May 2011

The Energy Supply Association of Australia (esaa) today welcomed the Federal Government’s announcement that it is making changes to the solar credits scheme to ease the impact on electricity prices.

Addressing climate change and reducing Australia’s greenhouse gas emissions requires the deployment of a wide range of new energy generation technologies and the greater involvement of consumers in making deliberate energy consumption decisions. But all of these changes come at a price.

“Delivering greenhouse gas reductions at least cost must be the core principle in any mitigation policy,” said esaa Chief Executive Officer, Brad Page.

It is for this reason that esaa supports the development of an efficient and enduring carbon trading scheme that includes appropriate adjustment measures as the centrepiece mechanism to achieve a measured and sustainable transition to a low emission economy.

Unfortunately for Australian consumers, governments at all levels have been rolling out inefficient high cost abatement programs that are relatively ineffectual in reducing emissions. Independent research from the ANU confirms these concerns.¹

“Someone has to pay for the high cost of solar PV installations and current government schemes mean that this is other consumers, including those least able to afford to do so, as the ANU study shows,” Mr Page said.

In determining increases in regulated electricity prices for the next financial year in NSW, the regulator (IPART) observed that the fastest growing cost component in electricity bills is green schemes and within that, the cost of solar programs dominates.²

“Addressing Australia’s emissions in an economically and financially sensible way is important,” Mr Page said.

This latest announcement from the Federal Government helps move Australia towards a more rational policy footing for dealing with emissions at least cost.

¹ Andrew Macintosh and Deb Wilkinson (ANU Centre for Climate Law and Policy) found in 2010 that there were equity issues associated with the program, with 66 per cent of all successful applicants residing in postal areas that were rated as medium-high and high on a socio-economic status (SES) scale. The program was also environmentally ineffective and costly. It will reduce emissions by 0.09 MtCO2-e/yr over the life of the rebated PV systems (0.015 per cent of Australia’s 2008 emissions) at an average social abatement cost of between $257/tCO2-e and $301/tCO2-e. Finally, the program appears to have had a relatively minor impact as an industry assistance measure, with much of the associated benefit flowing to foreign manufacturers and most of the domestic benefit being focused outside of the high value added manufacturing areas.
See https://www.tai.org.au/index.php?q=node%2F19&pubid=800&act=display for full report.

² IPART, Changes in regulated electricity retail prices from 1 July 2011, Electricity – Draft Report, April 2011

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Media contact:    Caroline Page     0421 103 089

The Energy Supply Association of Australia seeks to positively influence government policy decisions to ensure that Australia enjoys the benefits of a safe, secure, reliable, sustainable and competitively priced electricity and natural gas supply.

esaa’s 40-plus member businesses have more than $120 billion in assets and infrastructure investment plans worth over $49 billion over the next five years. The Association is fuel and technology neutral and member businesses have investments across a wide range of fossil fuel and renewable generation technologies.