$1.1 Billion Wasted On Solar Subsidies

The Age, 11 November 2010

Tom Arup

MORE than $1 billion of taxpayers’ money was wasted on subsidies for household solar roof panels that favoured the rich and did little to reduce Australia’s greenhouse gas emissions, a scathing review has found.

The review of the now scrapped federal government solar rebate scheme, conducted by ANU researchers Andrew Macintosh and Deb Wilkinson, also found the rebates did little to generate a solar manufacturing industry in Australia, instead sending hundreds of millions of taxpayers’ dollars offshore.

Mr Macintosh, deputy head of ANU’s Centre for Climate Law and Policy, told The Age yesterday the rebate had been “beautiful politics, terrible policy”.

“I can’t see there is anything to be gained continuing to subsidise rooftop solar PV [photovoltaics] in areas where households have easy access to the energy grid,” he said.

The program, started in 2000 with lower rebates, offered households an $8000 rebate to install solar panels on their roofs. In total, the government spent $1.1 billion installing 107,000 rooftop solar panels.

In June last year the Rudd government cancelled the program with less than 24 hours notice after surging demand rendered the scheme financially unsustainable. A less generous solar credits program has since replaced the rebate.

The report did not make any conclusion on the merits of the new scheme, or existing state-based solar programs.

By using documents obtained from the federal Environment Department, the researchers found 66 per cent of the solar systems installed under the program were on homes in suburbs with at least a ”medium-high” socio-economic status.

All solar panel systems installed under the program combined reduced Australia’s emissions by just 0.015 per cent, and cost up to $301 per tonne of carbon saved – hundreds more than the cost of emissions reductions with a carbon price.

In other findings, Mr Macintosh and Ms Wilkinson say while the program drove a six-fold increase in the generation capacity of rooftop solar panels, the technology still generates only 0.1 per cent of electricity output in Australia.

While the rebate benefited the domestic solar industry by up to $780 million, it did little to develop a value-adding manufacturing industry in Australia. Instead solar panels imports, mainly from China, rose from $17 million to $295 million between 2002 and 2009.

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