What will replace the $8000 pv rebate?

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Again, most will be familiar with the Department of Climate Change ‘Solar Credit’ scheme that is set to replace the Department of Environment $8000 rebate. People that would like to know the details, as far as the Government is able to explain, can look at:

http://www.climatechange.gov.au/renewabletarget/index.html

Essentially, the $8000 rebate will be replaced with a market based RECs multiplier scheme. On the day of the rebate’s demise, there was a lot of Government spin about the new scheme that allowed the media to report that the replacement scheme was nearly the equal of the $8000 rebate. It is nothing of the sort and here is why.

The good things about the solar credits scheme are:

•    No longer means tested
•    Now available for small businesses and community groups
•    Applies to solar PV and small wind turbines up to 1.5 kW capacity

The nasties are:

Different Orchards, Different Prices

Pink ladies must be compared only with Pink ladies. Not Royal Galas, Fuji’s and certainly not Brussel sprouts. A 1.5 kW system will get you more RECs, but will of course be more expensive. It will also attract more RECs if the system is in Darwin – a lot more sun, you see. Thus, the Government has been keen to use Darwin-based 1.5 kW figures on a $50 per REC price. It is, to momentarily swap our fruit species metaphors, called ‘cherry picking’.

The true orchard-based comparison is:

1 kW Ballarat REBATE Pink Lady = $8000
1 kW Ballarat SOLAR CREDIT Pink Lady = $3240 (90 RECs @ current $36 per REC)

The RECs Multiplier

In order to not have to shell out 8 grand, yet retain some sort of incentive, (knowing that to kill off the solar industry in a country with the best solar access in the world would itself be an act of political head-in-gas-ovenocide), the Government shifted the provision of the incentive to the private sector, via the Renewable Energy Target (RET) and the RECS that were created to acquit the target.

Here’s the prob. One REC = One MWh of ACTUAL renewable energy generated. Instead of the 18 RECS that a 1 kW system actually generates (ie 18 MWhs), the Government will now multiply these RECS by a factor of 5, in order to maintain some sort of incentive in a post-rebate world. Therefore a 1 kW system will attract 90, not 18 RECs. Sounds generous, but what it really means is that every time a person utilises ‘solar credits’ to purchase their 1 kW system, the RET will be diluted by having 72 ‘Phantom’ RECs (ie 90 minus 18) dumped into it to meet the 20% by 2020 Renewable Energy Target. Thus the 20% RE Target is reached partly on the back of ‘faked’ or non-existent renewable energy. Very dodgy.
Read some more at:

http://www.ata.org.au/news/impact-of-phantom-recs-under-estimated-solar-homes-make-major-contribution

When BREAZE met recently with Greg Hunt, the Shadow Minister for Climate Change, this sleight of hand was pointed out and Greg Hunt has undertaken to draft amendments to ensure that these additional ‘Phantom’ RECs do not count towards the Renewable Energy Target. Again, as with the Feed-in-Tariff, these matters are somewhat arcane but there will be no reason for the Government to shift its position (and it is fairly easy to shift this, administratively) unless BREAZE-types email and write to Minister Wong, saying that such a scheme is flawed and eminently fixable.

And wasn’t the new scheme supposed to start on July 1…what’s with the delay?

Minister Garrett referred to a smooth transition from the rebate to the solar credit scheme, but it has been nothing like a Gillette glide across the stubble because of some Government trickiness. Because RECs only exist because of the RET, the RECs based ‘Solar Credits’ scheme needs the RET legislation to be passed by the Senate. Everyone is happy to pass the THIS legislation, but then the Government decided to link the passing of the RET legislation to the passing of the Carbon Pollution Reduction Scheme, which is a piece of legislation that the senate parties are not thrilled to pass at all. Why the Federal Government decided to make an entirely separate, unrelated piece of legislation conditional on the other is speculated upon in the weblink below.

http://www.crikey.com.au/2009/06/18/wongs-renewable-energy-target-play-and-other-cynical-disgraces/

Presumably, the Government is seeking to ‘wedge’ the opposition and use the RET as a lever to force the opposition to pass the on-the-nose CPRS legislation, but it has meant that the Solar Credits scheme sits in limbo, waiting for either the Wedgers or the Wedgeed to blink. It has been referred to a Senate Committee (hopefully sans Godwin), which will report on August 12. Thus, the smooth transition to a ‘Solar credits’ scheme hasn’t just been a bumpy ride. Currently, the ride called the ‘Solar Credits scheme’ does not exist.

BREAZE will keep you informed of these developments, but members who have been on the other side of the means test and have been waiting to fill out the Department of Climate Change’s ‘Solar Credit’ forms will need to wait until all the above silliness is sorted out.

Last Updated on Thursday, 16 July 2009 04:55