Friday, April 10, 2009

'Use it or lose it' warning on solar energy

Adam Morton 
The Age, April 11, 2009

HOUSEHOLDS with rooftop solar panels will lose payments for electricity they generate, critics of proposed State Government laws say.

A bill before Parliament would grant households a premium subsidy for solar electricity fed back into the power grid, but the bill requires the subsidy to be paid as credit on electricity bills, not cash. If not used within a year, the credit would expire, effectively being swallowed by electricity retailers.

Clean energy groups, the Electrical Trades Union and Environment Victoria have launched a joint campaign for the proposed legislation to be changed, saying the credit clause could cost a household with solar panels $600 a year.

They warn it could encourage people to use electricity to excess before the credit ran out to get their money's worth.

A paper by the group proposing a series of amendments to the bill says the rule would establish "a perverse incentive for the householder to consume more energy".

The latest attack follows broader criticism that the Government's scheme — a net feed-in tariff that pays 60 cents per kilowatt hour for surplus energy fed into the grid — will do little to encourage people to install solar power.

Expert advice leaked to The Age said the scheme would fail to boost the solar industry significantly or cut greenhouse emissions.

The advice, by consultants McLennan Magasanik Associates, said only a gross tariff that paid a premium for all energy generated at home — a model that was rejected after heated clashes between ministers — would be effective.

Brad Shone, strategy manager with the Moreland Energy Foundation, said the credit expiry issue was a "huge problem". "If you have a relatively large system, are energy conscious and are not home during the day, you will definitely be in excess at the end of the 12 months," he said.

Energy Minister Peter Batchelor has challenged the critics.

Mr Batchelor recently told Parliament that modelling suggested households would average an annual credit of $600 — half the usual $1200 electricity bill.

"The cash-or-credit issue is really irrelevant to the overwhelming majority of people," the minister said.

He said the Government also had legal advice that suggested offering cash payments could lead to a constitutional challenge against the legislation.

Mr Batchelor said the Government believed solar energy had a part to play in Victoria's future, but it would get a "better bang for its greenhouse buck" by spending on research and large-scale solar power plants.

The energy policy manager for the Alternative Technology Association, Damien Moyse, said the Government had "missed the point" of a solar subsidy. "The key reason for having a feed-in tariff is to drive a rapid, large-scale uptake of solar systems and bring down the costs as electricity from dirty sources gets more expensive," he said.

The solar bill will go before the upper house next month. The Opposition has yet to reveal how it will vote, but the Greens have committed to introducing amendments to change the credit plan and to increase the size of solar system covered by the scheme from 3.2 to 10 kilowatts.

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