Is it time for solar incentives to go?

In the wake of the announcement last Monday, 3 September 2012, that the Victoria feed-in tariff was to be slashed from 25¢ per KWh to 8¢ per KWh many questions have been asked about the future of solar incentives. The debate was further stimulated by US President, Barack Obama, when he promised to continue investing in renewable technology and reducing America’s carbon emissions if re-elected. With many calling for a ‘free market’ where renewables will compete directly against traditional established technologies is it now time to cut the apron strings?

There is, undoubtedly, a lot going on in the solar industry at the moment. Legal cases in Europe and the US; renewable energy targets both at home and internationally; technological innovations and a rumoured buyout of one of the solar industries former gold star pupils. However, Federal and State incentives, for both the consumers and producers of solar technology, will continue to play an important part in securing the future of the sector.

In the US renewable energy and Climate Change, have become one of the major playing points for President Obama’s re-election campaign, with the Republican candidate, Mitt Romney, openly dismissing Climate Change and setting a dangerous precedent for the energy future of the country if elected. The US has a powerful reason for going down the renewable energy path, reducing their reliance on imported oil, regardless of their official stand point of the Climate Change question (despite many scientists finding solid evidence in support of the existence of the phenomenon, there is still money being spent on disproving their findings).

At home in Australia, a similar argument has been raging since the introduction of the controversial Carbon Price. Like the tactics of those in opposition to Presidents Obama’s views on renewables, in Australia the Carbon Price has been demonised as a means of extracting more money from the tax payer and having a catastrophic effects on our farming and mining sectors, many calling for a free energy market and a complete withdrawal of renewable energy incentives.

Although many have suggested that increases in our energy bills are as a result of the Carbon Price. The impact of the Carbon Price on energy bills is below the increase we have seen, it has been suggested that this additional increase has caused the the decrease in peak time electricity demand as a result of many households taking advantage of existing solar PV incentives. If this is indeed the trend, maintaining or increasing incentives for customers would be a positive step to protect everyday consumers from the rising cost of energy.

This pattern will be similarly replicated in the US, if not globally, as the cost of fossil fuels increases and consumers to look for an alternative means of reducing their energy bills – solar and wind are already poised to fill this gap.

Maintaining the current Federal and State incentives and investment support will help to support an ongoing solar PV market and make purchasing more cost effect for customers on an ongoing basis. If the Government wanted to offer further support to the industry they would do well to follow the ACT’s one-to-one feed-in tariff and offer customers producing more energy than they require the market value for their investment.

Although Australia has significant reserves of these finite resources, using renewables for our own needs means that we are prepared for a time when they run out, or more likely, become too expensive to extract. Australia’s current resilience to the global economic downturn is in part due to it’s reserves of traditional fuels and investment in renewables on our doorstep is a positive step to ensuring the continued economic safeguarding of the country in the future.

© 2012 Solar Choice Pty Ltd

Rebecca Boyle

Rebecca is a sustainable development and marketing graduate, with a background in community engagement and research. She has a particular interest in sustainable resource use.
Rebecca Boyle