Garrett signals a reprieve for solar industry

• Adam Morton
• The Age, June 11, 2008

ENVIRONMENT Minister Peter Garrett has signalled that a means test that makes it harder for households to get an $8000 rebate for rooftop solar panels may be abolished if it causes a dramatic fall in sales.

The $100,000 means test, introduced in last month's budget, has been criticised by unions, the Opposition and the Greens and has drawn strong protests from the solar panel industry, which claims it faces losing up to 80% of its business.

While reiterating his support for the policy, Mr Garrett yesterday said the Government had listened to the industry's concerns and would track the impact of the means test on the solar photovoltaic market.

"Let's monitor demand so that we have accurate figures … on the basis of accurate information we'll consider what the right action ought to be," he said.

The Opposition last week targeted Mr Garrett over the policy, with Liberal leader Brendan Nelson threatening to introduce a private member's bill in a bid to force the Government to backtrack.

Under sustained attack in Parliament, Mr Garrett responded that the rebate scheme was overheating — attracting more interest than could be met by the funding the Howard government allocated last year.

Environment Department officials told a Senate estimates hearing that demand had grown to three times the level the funding allocation could sustain, and would have had to end within months unless means tested.

The Government responded in two ways: by introducing the means test, and bringing forward funding so the number of rebates available each year doubled from 3000 to 6000.

But critics claim few households on less than $100,000 can afford solar panels, which cost between $12,000 and $21,000 without the rebate. They argue that the Government is treating the solar rebate as middle-class welfare, rather than a means to combat climate change.

Prime Minister Kevin Rudd has previously left the door open to the Government fine-tuning its renewable energy policies as it introduces a carbon trading scheme, which will require business to buy permits to emit greenhouse gas from 2010.

Mr Garrett's comments came as he launched a $4.9 million "solar cities" program in Coburg, fulfilling a promise made before last year's election.

About 1000 poor households will be audited and refitted to become more energy efficient in a bid to cut greenhouse emissions and reduce electricity bills under a project led by the not-for-profit Moreland Energy Foundation.

Brotherhood of St Laurence executive director Tony Nicholson said that assuming a carbon cost of $25 a tonne, research suggested the rise in prices under an emissions trading scheme would push 206,000 households below the poverty line.

The Coburg project is also a research exercise, with smart meters to be installed in homes to measure the impact of rising electricity prices on energy use.