Federal Government Dumps Solar Hot Water Incentives

The Federal Government has abruptly dropped its incentive for Solar Hot Water.  The Renewable Energy Bonus Scheme (REBS) offered rebates of $1000 for solar hot water systems, or $600 for heat pump hot water systems. Solar hot water systems will still be eligible for up-front rebates in the from of Small-scale Technology Certificates (STCs, a type of Renewable Energy Certificate, or REC) under the Federal Solar Credits rebate scheme. The rebate reduction will have no effect on homes and businesses who plan on installing solar photovoltaics (PV) systems.

23 February 2012 deadline for solar hot water rebates

The announcement of the end of the scheme came after its actual termination, presumably to avoid a rush to the finish line and the associated chaos–similar to what was seen when the NSW Solar Bonus Scheme’s 60c/kWh Feed-in Tariff was cut with just hours’ notice. In order to be eligible for the REBS rebates, systems must have been installed, purchased, or ordered (and a deposit paid) by 28 February 2012.

According to the Federal Department of Climate Change website:

If you have installed a system prior to 28 February 2012, your application must reach the Department within 122 days from the date of installation.

– If you purchased or ordered (and paid a deposit) for a system up to 28 February 2012, but installed it after 28 February 2012, applications must be received by the Department by 30 June 2012.

Systems purchased or ordered after 28 February 2012 are not eligible for the REBS rebate. Additionally, any application received by the Department of Climate Change after 30 June 2012 will not be eligible.

Industry and Political Response

The solar industry has already responded to the news, with the Australian Solar Energy Society (AuSES) calling for the Government to reinstate the support scheme. Alluding to the often unpredictable and erratic changes that have characterised support for renewable energy on both the Federal and State levels, AuSES Chief Executive John Grimes commented, “The disastrous solar policy rollercoaster continues. Another solar scheme shut down without notice, more solar jobs lost. That’s bad policy and bad process.”

There are estimates that the solar hot water industry could ‘halve overnight’, especially in the light that the strong Australian dollar, which makes imported gas and electric hot water systems comparatively more affordable than locally manufactured solar hot water systems. According to Gareth Jennings, government relations manager with solar hot water system manufacturer Rheem, the industry would be left in chaos, with “tens of millions of dollars” of solar systems sitting in warehouses.

“This scheme should have been extended, not cancelled early, particularly not at such ridiculously short notice and with no reason given,” said Greens deputy leader Christine Milne, according to an article in SMH. In the same article, Coalition climate action spokesman Greg Hunt was quoted as saying, “They needed to give the industry reasonable notice. Instead it has come to a crashing halt. The government simply manages to do enormous damage to the solar sector on a repeated basis.”

© 2012 Solar Choice Pty Ltd 

James Martin II

Contributor at Solar Choice
James was Solar Choice's primary writer & researcher between 2010 and 2018.

He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.

James lives in Newcastle in a house with a weird solar system.
James Martin II