Among Coalition’s changes to renewable support schemes, an ARENA budget cut for the 1m solar homes program

The Coalition, as largely anticipated, has come to power following the 7 September election, riding a wave of anti-Labour sentiment. Everyone involved in renewables or with an interest in renewable energy development in Australia is watching keenly for indications as to how the burgeoning, $20 billion renewable energy industry might fare under the new administration. How things will shape up is not yet clear (and it may be months before they are), but some of the basic ideas about the Coalition’s approach to renewable energy have already been disclosed, including their intention to divert funds from the Australian Renewable Energy Authority (ARENA) to the 1 Million Solar Roofs scheme. 

As a first order of business, the Coalition has vowed to move swiftly to introduce legislation to remove the Carbon Tax and to shut down the Clean Energy Finance Corporation (CEFC), which has an annual $2b budget for managing investments in clean energy. While the current ‘unwieldy’ senate composition may impede their ability to fulfill these goals immediately, newly minted Prime Minister Abbott has said it is his ‘blood oath’ to make them a reality, with a double dissolution of parliament not out of the question if that’s what it takes to accomplish the task.

Although not as obviously progressive on renewables and climate as the previous government, the Lib-Nats do ostensibly support renewable energy, and have plans for a number of programs that aim to aid the advancement of clean energy. The argument that they put forward is not that Labour was wrong in working to address the climate change/renewable energy issue, but rather that their approach to doing so was flawed and harmful to the Australian economy–although reading between the lines it is clear that they have less enthusiasm for the topic than their predecessors.

Instead of energy industry-focused programs like Labour’s Carbon Tax and the CEFC, the Coalition’s Direct Action Plan puts a heavy emphasis on sequestration of carbon dioxide, mainly through restoration of soils and tree planting. It seems that at least some funding will still go to towards renewable energy via programs such as the 1 (more) Million Solar Roofs scheme. In fact, the Coalition has recently said that it intends to divert between $150m and $500m from ARENA’s budget to go towards its 1 Million Solar Roofs program (although doing so would mean going through the senate), but there is also talk that the $1000-per-system support initially proposed for the program will be halved given reductions in solar PV installation prices in recent years.

(Climate Spectator’s Tristan Edis has compiled list of the rest of the climate-related schemes to see budgets slashed.)

What does this all mean for homes and businesses looking to go solar?

So far, the most significant changes proposed to be brought in have to do with larger-scale renewable projects (wind power is unfortunately tipped to suffer most under the new government). It’s not really a question that, under the Coalition, the renewable energy industry and its infrastructure in general are worse off than under Labour.

Although a fair amount of change is in store for the renewables sector, there is little that has been said indicating that there will be an immediate impact on residential and smaller-scale commercial solar power (or even utility-scale solar not seeking government funding). As mentioned previously, one program that will come through unscathed is the federal renewable energy target (RET). Originally introduced under the Howard government, and doing the ‘heavy lifting‘ for renewables according to new Environment Minister Greg Hunt, will remain in place. The fact that the RET is not going anywhere means that the main program for supporting residential solar power will remain in place, and any rebates/credits offered under the 1 Million Solar Roofs scheme may even be a bonus–as long as installation prices don’t rise.

Admittedly, the RET may be be altered during annual reviews, much as it did under Labour, and it would not be surprising to see it weakened. But this is a matter of speculation at this point. In the meantime, solar industry is watching how things unfold over the next few months, but it is abundantly clear that with a lessened amount of government support, the future of rooftop solar power is much more in the hands of market forces than ever before.

© 2013 Solar Choice Pty Ltd

James Martin II