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The solar energy industry has received little government support so far. Image: Daniel Figueroa.

 

A decision by the Department of Climate Change and Energy Efficiency to phase out Solar Credits a year earlier is being flagged as a win for the solar energy industry.

The decision means that average government support for a 1.5 kilowatt system in Sydney, Brisbane, Perth or Adelaide would be reduced from about $6,200 to about $5,000.

Mark Twidell, the executive director of the Australian Solar Institute, says that the recent announcement by Minister Greg Combet shows that the industry is beginning to support itself without government help.

“The technology costs are coming down. The industry, as it continues to expand, is able to lower prices and the result is that generally governments around the world are reducing the level of
subsidy support, which is a good thing,” he says.

“If you were to think of solar energy as you might think of a human being, we’re probably just entering our teen years. We’re yet to leave home. I think leaving home is when you can start to look after yourself.”

Twidell believes the government has an important part to play in helping the solar industry to gain independence and compete in the energy market.

“Every market around the world is in some ways the result of government policy. Those policies manifest themselves in subsidies and incentives to help build the market for solar power so
that more investment can come in, which lowers the cost,” he says.

But not everybody believes governments have helped the industry get on its feet. Recent amendments to state and territory feed in tariff systems created a level of uncertainty for businesses in the sector, and caused confusion to the consumer.

The NSW State Government recently decided to slash the household feed in tariff for solar panels from 60 cents to 20 cents per kilowatt an hour.

Not all states are following this pattern. In August, South Australian Premier Mike Rann announced that he would be increasing the feed in tariff by 10 cents to 54 cents per kilowatt an hour.

Not only do the rates vary from state to state, but so too do the duration of subsidies.

Matthew Wright, the executive director of the non-profit, volunteer organisation Beyond Zero Emissions says that the recent changes by state and federal governments have not helped the industry to achieve its full potential.

“The main issue around it is the stop-start nature of policy, which basically means that industry can’t really scale and ramp in an orderly way, or follow thorough with the quality that is needed,” Wright says.

“So perhaps [the] market was a bit more heated in ramping faster than it needed to, but that didn’t mean that you pump it and dump it.”

Wright believes that a uniform feed in tariff would reward production and ensure consumers seek out better quality panels and installations.

“What we really need is a national approach, it should all be based around a feed in tariff . . . and renewable energy certificates should be eliminated as upfront subsidies because they don’t reward production,” he says.

Max Sylvester, general manager of Innovation at renewable energy company Energy Matters, says that the recent announcement by Mr Combet does have an impact on the stability of the industry, but also shows that solar energy is on the way up.

“It’s kind of bad for the industry, but it proves that the industry actually works and that people are producing meaningful amounts of power,” he says.

“I think it will play a huge role in the future . . . once the panel is produced, there’s no emissions from the energy that’s created from the panels. So it really is an emissions-free technology.”

Sylvester also believes that the industry is being unfairly blamed for rising electricity prices.

“It’s really the ageing infrastructure. There’s billions of dollars that needs to be invested into electricity infrastructure, but it’s nothing to do with solar. Nobody has spent any money on it in the last 30 years,” he says.

Sylvester points out that solar is the cheaper long term alternative for consumers, as coal-generated electricity prices continue to rise.

“If you work it out over 25 years, you’re paying probably 10 cents per kilowatt an hour, or maybe less because of the current rebates that we have [for solar]. Whereas you’re currently paying probably 15 to 20 cents per kilowatt an hour for electricity you’re using around the house. And that’s only increasing every year.”

Like any developing sector, there are many research projects underway to increase the presence of solar energy in Australia.

The Australian Solar Institute is funding 27 projects valued at $200 million across Australia. Twidell says that one such project is looking into the benefits and development of solar thermals.

“Solar thermal technology uses mirrors to focus the sun’s light in the same way that you might do with a magnifying glass. These projects offer the advantage of being able to store heat and generate electricity after dark, and one of the challenges of solar is that we like our electricity when we’re at home at night,” says Twidell.

“I would say that the future for solar energy is absolutely bright. The industry is doubling in size almost every year around the world . . . it’s certainly the world’s fastest growing energy industry.”