Legislation to establish and fund the Clean Energy Finance Corporation (CEFC) has been introduced into the Federal House of Representatives by Climate Change Minister Greg Combet. The CEFC is a key component of the Labour-Greens Coalition’s ‘Clean Energy Future’ initiative to ensure a 40% share of electricity generation by renewables by the year 2050.
The CEFC will commence operations on 1 July 2013 and will be managed by an independent supervisory board comprised of banking, finance, economics, and energy experts. Combet said the CEFC will receive $2b of funding per year for the first 5 years, plus 3 years’ worth of funding for establishment and operations. The primary functions of the body will be to encourage private investment, and facilitating the commercialisation process and deployment of clean energy technologies. The CEFC will act as a complement to the Government’s $23/tonne Carbon Price, which is set to come into effect from July this year.
Advocates of renewable and low-carbon technologies welcomed the news. The Australian Conservation Foundation (ACF) commented in a media release that the CEFC had the potential to remove the barriers to private funding of renewable technologies well in excess of its budget–up to $100b. “This level of investment is essential if we are to effectively address climate change.”
Australian Solar Energy Society (AuSES) Chief Executive John Grimes also welcomed the development, saying, “The CEFC will help unlock substantial investment in community, commercial-scale and Big Solar“. He also noted that the CEFC would ‘supercharge’ solar photovoltaics (PV) in Australia.
Grimes’ statement continued, “Government has an important role to play in leveraging private sector investment in Big Solar and emerging energy sources. The truth is the transformation to a clean energy future will require substantial capital which the private sector alone may not be able to provide.”
“Big solar makes economic sense in many parts of Australia with the cost of solar declining rapidly and the price of polluting power continuing to rise. Big solar is being built throughout the world, but private finance remains locked up in Australia. The CEFC will help leverage the necessary privat sector investment.”
Commercial-scale solar power is widely viewed as the future of solar power in Australia, but funding for such projects still remains inaccessible to many developers. The 2 candidate projects selected for the Federal Government’s Solar Flagships program, for example, have faced numerous setbacks, most of which revolve around issues with securing finance.
Financing is expected to become easier, however, as more large-scale solar projects enter into operation and the price of solar power technology continues to fall. The most promising region for large-scale solar power is currently the ACT, which is in the process of selecting projects to access its proposed ‘reverse auction’ Feed-in Tariff. Likewise, a growing number of medium- to large-scale solar projects (100kW+) have been facilitated across the nation through Solar Choice Commercial’s Commercial Solar Power Finance Package, paving the way for more and larger projects in the future as certainty grows in the industry.
Read more about the Clean Energy Finance Corporation
Top image via CleanEnergyFuture.gov.au
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