A Gippsland solar energy business owner claims a new feed-in tariff will scare off prospective customers in Victoria.
The Victorian Government has announced a feed-in tariff of eight cents per kilowatt hour for excess power exported from homes and businesses into the electricity grid.
The tariff had previously been set at 25 cents, down from 60 cents, a figure described as over-generous by the Victorian Competition and Efficiency Commission's review.
Yarragon-based solar consultant Geoff Boadle says the feed-in tariff complements the Federal Government's solar credits scheme where people get an up-front discount on the cost of their system.
Mr Boadle says the federal scheme is being wound back every year.
"There's just not enough incentive for people to go ahead," he says.
"The feed-in tariff was another mechanism by which people could off-set the cost or see the value of putting solar on their household.
"It's just going to see the end of a lot of small businesses like ourselves."
Victorian Energy Minister Michael O'Brien denies interest in solar energy will diminish because of the tariff reduction.
"Victoria saw a 33 per cent increase in solar connections for the first six months of 2012 compared to the same period in 2011, despite the feed-in tariff stepping down from 60c/kWh to 25c/kWh," Mr O'Brien says.
"This demonstrates that it is the falling cost of solar and the rising price of electricity that is driving uptake, rather than feed-in tariffs."
The feed-in tariff of eight cents applies from 1 January 2013.
Solar customers who currently get a premium feed-in tariff or the transitional feed-in tariff will not be affected and conclusion dates for both of those schemes will not change.
People who have already paid a deposit or are just getting their system installed may still be considered for the higher transitional rate if their paperwork is lodged by the end of this month.