By Bronwyn Herbert
The cost effectiveness and fairness of the solar voltaic rebate program is being questioned (ABC Local: Tamara Binamat)
A new report has found the Federal Government’s billion-dollar subsidies for solar energy favoured the wealthy and barely reduced Australia’s greenhouse gas emissions.
Over the past decade, successive federal governments have provided generous subsidies to households installing solar roof-top panels.
But the cost effectiveness and fairness of the solar voltaic rebate program is being questioned.
Andrew Macintosh, the associate director of the Australian National University’s Centre for Climate Law and Policy, has reviewed the program.
He says it has barely reduced Australia’s greenhouse gas emissions, and it has favoured the rich.
“What we found was that the cost of the program was very high,” he said.
“It cost the government about $1.1 billion. For that we got about a six-fold increase in solar generation, but still solar constituted only 0.1 per cent of total generation, so a relatively small technology in the overall grid,” he said.
“We’ve been handing out a lot of subsidies for solar systems, but the most people who pick up these subsidies tend to be from wealthier households … and as a result we’re basically providing middle and upper class welfare.”
In June last year the Federal Government cancelled the program at short notice.
The surge in demand was seen as making the scheme financially unsustainable.
Mr MacIntosh says the economic benefits have largely flowed to foreign manufacturers.
“When you look at the data, we were importing most of the systems that have been installed, and I would expect that that’s over 80 per cent,” he said.
“As a result of that, the primary benefit from the program seems to have been directed overseas to overseas manufacturers.
“But certainly domestic installers, electricians and the like benefited from the program, particularly in the last 18 months or so.”
The chief executive of the Australian Solar Energy Society, John Grimes, says the report misses the primary objective of the program.
“These schemes are designed to drive the cost of solar to what we call grid parity, that’s where the investment cost of the technology plus the cost of financing is the same as or less than what you can buy electricity from the coal-fired grid for,” he said.
“This is about actually bringing subsides down over time and building a bridge between where we are and where we need to be so that this becomes a mainstream application that requires no government support.”
Renewable energy advocates say boom-bust policies, like New South Wales’ slashings of its feed-in tariff, have hurt the solar sector.
They say the industry needs stable policy from both federal and state governments to ensure a long-term future.