Clouds Loom On Solar Horizon

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New renewable energy legislation could effect solar power rebates.

The current solar energy incentives for home owners and small business are based on renewable energy certificates (RECs) and in particular the “Solar Credits Scheme” which offers a five times multiplier on the first 1.5kw of a solar power system. The new Renewable Energy Target legislation which comes into effect on Jan 1, 2011 will give the regulation body the power to change this multiplier and set the price of the certificates in order to cool demand if they believe the industry is “overheating.”

The suggested triggers for enacting the cooling strategy are below 2010 levels of business activity. Strangely enough, when the idea of instituting a tax which might cool the mining industry was raised, the prime minister had to be removed. Unfortunately the solar power industry doesn’t have that much clout!
The upshot of it all is that if you’re considering investing in a solar energy system for your home or business, the current incentives from both state and federal government (combined with current very competitive pricing on solar generation equipment) make now a better time than ever to go ahead and get your system installed. Current returns on investment are in the order of 20% in NSW, this rate of return may not be sustained into the future.

With an election looming, it always interests me to see what policies the major parties are advocating with relation to the renewable power industry. Labor have certainly disappointed many with their failure to push carbon trading legislation through parliament and adoption of weaker targets than the climate lobby had hoped to see.

However, the coalition’s commitment to fight climate pollution with action rather than legislation has not been quantified and I wonder if there is really any determination to make a lasting contribution. For example there was an announcement in the campaign that a coalition government would abolish the Carbon Capture and Storage Institute. The Greens have long supported the main instrument which the renewable energy advocates see as being the best way of supporting carbon neutral energy production, namely a gross national feed in tariff.

NSW introduced the “Solar Bonus Scheme” this year, which is a state base gross feed in tariff of 60 cents per kilowatt hour. The system has encouraged unprecedented take up of solar power systems and much larger systems than previously seen, so we know that the idea is a winner. A similar scheme which has been in operation in Germany for around ten years is credited with creating up to 50,000 new jobs and has made Germany the centre of excellence in solar manufacturing world wide (and not because of the sunny weather either!)

Whoever makes it into power this August, let us hope that clean energy for a sustainable future will be at the top of the agenda.

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