News | 1st Sep, 2011

Solar power subsidy slashed

Thursday, 1 September 2011
Adam Morton, The Age

The Victorian government will cut the subsidy paid to households for electricity fed into the grid from rooftop solar panels by more than half.

Energy Minister Michael O'Brien said the premium rate of 60 cents per kilowatt hour would be reduced to 25 cents.

The new rate will apply for people with panels who have not submitted the required paperwork and reached a contract agreement with an electricity retailer by September 30.

Households already receiving the 60-cent rate will not be affected.

Mr O'Brien said the 25-cent scheme would was a "fair and reasonable" incentive for households to install solar systems while the Victorian Competition and Efficiency Commission reviewed the scheme.

"Unlike many other states, which have closed down all feed-in tariff schemes, Victoria's [new scheme] will provide a fairer, more sustainable approach which reduces the boom/bust cycle for the industry," he said.

"The new scheme will still mean people investing in rooftop solar systems will have an average payback period of less than 10 years, about the same as forecast when the [60-cent] scheme was first introduced."

The change was criticised by the solar industry and environment groups.

Solar businesses had warned a solar feed-in-tariff of at least 40 cents was needed to ensure the fledgling industry would continue to grow.

Environment Victoria campaigns director Mark Wakeham accused the government of breaking an election promise by reducing the solar tariff without consulting the community or solar industry.

He said the government was reducing support for solar power just days after introducing the country's most restrictive laws for wind farms.

“This announcement caps off a disastrous week for renewable energy in Victoria. It appears that the only plan the Coalition has on climate change is to ensure Victoria misses out on the clean energy investment boom," he said.

Mr O'Brien said the new rate would be available from January 1. The review of feed-in-tariffs has not started, and is expected to report in the second half of 2012.

Read the article here