The federal government has moved to nix the Clean Energy Finance Corporation’s plans to fund rooftop solar leasing schemes in Australia. Although the government’s directive – handed to the CEFC as a ‘draft mandate’ – has ignited a media furor, the legality of the proposal is questionable, and the CEFC has hinted that it will attempt to find a way to carry through with its plans.
The Australian Solar Council described the government’s move as ‘a massive blow to working families and small businesses’. Solar Council Chief John Grimes said, “[T]he Abbott government is stopping the most vulnerable from slashing their power bills. … This is about punishing solar families and business who stood up to him during the review of the Renewable Energy Target. Now he is using any means available to get even.”
Using similar language, Solar Citizens National Director Claire O’Rourke called the government’s decision ‘unbelievable’. “The CEFC has been a roaring success, helping thousands of Australians cut their bills by providing cheap finance for rooftop solar projects on homes, businesses and community buildings across the country,” she said in an email. “But this latest attack means thousands of Australian who want solar will be denied this opportunity.”
Solar leases – sometimes referred to as $0-down solar or ‘free’ solar deals – allow households and businesses to have solar panels installed without incurring any out-of-pocket cost. Instead, they pay only for the electricity that is generated by the panels – not for the panels themselves. Under theses schemes, ownership of the system is retained by the financier (and sometimes installer) of the system. They are often described as ‘win-win’ because the home or business owner can save money on their power bills immediately (without having to recoup an initial investment), while the company behind the system makes money by selling the solar power to the user. They are also an attractive option for those without the means to purchase a solar system of their own.
Solar leases have proved extremely popular in the United States, where as much as 70% of US homes go solar under such programs. By contrast, the vast majority systems in Australia are purchased outright by the home or business owner. Even though solar leases became available on the Australian market for the first time several years ago, their uptake has been relatively limited, possibly due to the low cost of solar power in Australia and unfavourable feed-in tariff incentives.
© 2015 Solar Choice Pty Ltd