Sun to shine again on solar

Adam Morton

The Age, August 17, 2009

http://www.theage.com.au/environment/sun-to-shine-again-on-solar-20090816-emdc.html

IF ALL goes as expected, solar panel sales people across Australia will at some point this week uncross their fingers and toes and crack open the champagne.

Among the immediate winners when the renewable energy bill becomes law will be the 100 staff at Solar Shop Australia, who have been told their jobs depend on it. The solar industry has been without Government support since the $8000 rebate was axed in June.

The replacement, a solar credit scheme expected to yield between $4000 and $6000, has been in limbo for two months since the renewable energy bill was deferred to a committee. The result has been the plummeting sales of rooftop panels.

Beyond boosting the solar industry, the renewable energy target - requiring that 20 per cent of electricity comes from clean sources by 2020 - is expected to increase electricity prices by 4 per cent compared with what would otherwise have been expected.

But the price rise will also depend on the carbon price and be offset by a compensation package for some households if emissions trading is introduced.

The target itself is designed to start slowly and pick up speed after 2015. Analysts estimate it could be met solely through the annual installation of 10,000 rooftop solar panels over the first five years. If so, we will not be getting as much clean energy as the target suggests; the Government plans to hand out free solar credits not associated with energy generation as an incentive to install panels and count them towards the target.

Similarly, a chunk of the target will be eaten up by clean hot water systems that do not put power into the grid.

On a larger scale, the big winner will be wind power. In Victoria alone there are about 20 wind farms approved and waiting on investment. There is disagreement over how quickly they are likely to be built. Investment bank UBS says only the most efficient wind farms would yield an early return, but electricity wholesalers know meeting the 2020 target will require having major clean energy plants in place and ready to go.

Other large-scale renewable energy sources such as solar thermal, geothermal and tidal will struggle to compete, at least initially. The Opposition has proposed a potential solution: setting aside a quarter of the target for forms of energy that could eventually provide baseload power.