June 30, 2014

Australia: The Case of the Missing Solar Millions

Greg Hunt, Australia's environment minister, has avoided questions about whether he had continued to give assurances to the solar industry that the "one-million-solar roofs" initiative would go ahead despite knowing that the policy had been scrapped by his party's leadership.

Australia’s renewable energy policy landscape has looked pretty grim since its conservative coalition government came to power, in September 2013. One of the bright spots for solar PV was that the environment minister repeatedly committed to a AUD$600 million (US$564 million/€417 million) “solar roofs” policy in the lead up to the election.

When the new government, in May of this year, handed down the first budget there was no funding for the solar initiative, leading to some in the solar industry to speculate whether it was ever intended to go ahead.
Over the weekend, Australia’s Fairfax Media reported that the environment minister Greg Hunt had continued to publically commit to the solar policy, despite knowing that his party’s leadership had not signed off on it. Today, arriving at the Australian Parliament house, he dodged questions on the topic. 

''We had to make difficult decisions in the budget to undo Labor's [the former government’s] catastrophic mess,'' Hunt said. ''Part of this is making sure Australians have a lower cost of living and that is why we will be abolishing the carbon tax lock, stock and barrel.''

Before the election Hunt had committed to the “solar roofs” policy, which would have provided AUD$500 (US$470/€347) rebates for installing one million residential solar arrays.  Additionally community groups and schools would be assisted to install solar on their buildings.

When the May budget was handed down, however, the AUD$600 million had been reduced to AUD$2 million (US$1.88 million/€1.39 million).

Questions about the solar roofs
In recent Senate Estimate hearings, Australian Greens Senator Scott Ludlam questioned the environment ministry with regards to the missing solar roofs policy. Government Senator Birmingham, representing environment minister Hunt, said that in light of the cost reductions achieved by the solar industry, continued funding “was not a possibility.”

“There have also of course been some very significant decreases in the costs of solar technologies in recent years that have made their uptake much more accessible to all parts of the community,” said Birmingham.” “With all of those factors in mind, the government deemed that proceeding with additional funding commitments at present was not a possibility.”

Grid parity installations
Despite the increasingly difficult policy environment facing solar installers, figures released last week show that installations appear to be picking up in key markets.

Green Energy Markets released the data, which shows that in the most populous states of Queensland, Victoria and New South Wales (NSW), February through May 2014 saw and increase in overall installations. There is no subsidized feed-in tariff in any of these states.

Queensland particularly showed a strong level of installations, with well over 20 MW/month of new PV capacity added in all four months, with Victoria following with around 15 MW/month and NSW in third place with around 10 MW/month. The commercial rooftop market in NSW looks particularly promising as it does in the less populous South Australia.

Industry observers predict between 600 MW and 800 MW of new PV capacity should be added in Australia in 2014. Whether the solar industry can continue to maintain the cautious growth trend observed by Green Energy Markets in the face of mounting policy opposition will be intriguing to observe. What is clear is that the “one million solar roofs” certainly won’t be helping.

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