Tuesday, January 27, 2009

Solar power FIT advice ignored

AN AMBITIOUS solar power subsidy system — rejected as too expensive and "unfair" by the Brumby Government — would have cost Victorian households no more than 70 cents a week, according to confidential advice obtained by The Age.

The system has been credited with triggering a multibillion-dollar solar power boom in Germany and has been adopted in more than 40 countries.

But despite repeated urgings from bureaucrats and government agencies to have the system adopted in Victoria as an affordable way to boost renewable energy, the Government rejected it in favour of a much less ambitious alternative.

According to a leaked cabinet committee submission from the Department of Sustainability and Environment, the so-called "gross feed-in" solar subsidy scheme would have cost households just $18 a year, or 35 cents a week, increasing electricity bills by just 2 per cent.

The department submission says the system would "provide the required momentum to create a thriving solar industry in Victoria".

Experts including Victorian Sustainability Commissioner Ian McPhail, the CSIRO and forecaster Access Economics have also backed the scheme.

But the Government took the advice of one department, Primary Industries and Energy, for a cheaper model known as a "net feed-in tariff".

The decision came despite Primary Industry and Energy's own costings showing the more generous scheme likely to cost households only 70 cents a week, or $37 a year.

Academics and industry experts say the adopted scheme, to be detailed in Parliament within weeks, is unlikely to encourage a broad take-up of solar panels.

Well-placed sources across government have told The Age that, until shortly before last year's cabinet decision, Premier John Brumby had been relaxed about the more generous scheme. It was also strongly backed by Environment Minister Gavin Jennings.

Then, after months of studies, reports, debate and advice, Energy Minister Peter Batchelor produced last-minute figures claiming the cost at $100 a year for households, or 10% on average power bills, which he said would be unfair on low-income households.

Mr Batchelor told a parliamentary committee that the level of cross-subsidy from non-solar households to those with solar was unsupportable.

The "gross feed-in" system has been adopted by more than 40 countries and is credited with boosting the German solar power industry, which employs 57,000 people and exports solar products worth 2 billion euros a year.

Under the German system, households, businesses, farmers and community groups receive subsidies for all the renewable power they generate, including what they use themselves.

The proposed Victorian system provides payments only to households, and only for the surplus power fed back into the electricity grid after they have used what they need.

Mr Batchelor would not be interviewed yesterday, nor respond to questions of whether he stood by his $100 figure or how he arrived at it.

Instead, spokeswoman Emma Tyner said the Government had "one of the most generous feed-in tariff schemes in Australia" which "ensures no vulnerable families are left behind". She said the gross model was "unfair".

Ms Tyner said the Government pursued policies that promoted large-scale renewable energy investments, including $50 million for the demonstration solar power station near Mildura, the largest in the world.

"Now the Federal Government has announced its emissions trading scheme, the CPRS will be the mechanism to reduce greenhouse gas emissions, and together with the renewable energy target, they will stimulate the most cost effective forms of renewable energy," Ms Tyner said.

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