Solar power in the federal budget: outcomes and changes

The budget for the Australian federal government for the next financial year was released this week. This article covers the changes to funding for solar power projects and policies across the nation. Some of the most notable changes: the national solar for schools program will close on 30 June 2013, and the Solar Flagships budget will be reduced by $220 million over the years 2012-2013. Despite these cuts in the federal budget to solar power incentive and promotion programs, a silver lining can be seen in the form of additional funding to the Solar Cities program, the Office of the Renewable Energy Regulator, and the Emerging Renewables program.

The news comes after the Solar Power industry has seen a number of setbacks as solar incentive schemes–most notably the suspension of NSW feed-in tariff scheme and the federal government’s decision to reduce the REC multiplier–have been withdrawn or reduced.

The following are the key changes to the federal budget with regard to the promotion of solar power in Australia:

Bad news first–

  • As of 30 June 2013 the hitherto highly successful Solar Schools Program will be closed in order to save $156.4 million from the budget. Grants will still be rewarded to successful schools for the years 2010-2011, and then again for 2011-2012 and 2012-2013, but that will be the end of the scheme, doubtless to the disappointment of many teachers and students.
  • The Solar Flagships program will see funding slashed by $220 million over the years 2012-2013, but funding will be restored beyond the forward estimates. Funding to the 2-year-old, $1.5 billion Solar Flagships program has been subject to much turmoil and unpredictability since its inception, however, with numerous funding cuts and restoration of funding cuts.
  • Grid infrastructure investment has also been slashed considerably by the government, from a planned $100 million over 4 years to $1.4 million over the next 3 years to support new grid infrastructure design. This kind of investment is integral in the transition to a clean energy future, and the budget cuts will result in delays, instead of the fast-tracking that is called for.
  • Funding for the $100 million Renewable Energy Venture Capital Fund has been delayed until 2023-24 to œassist early-stage renewable energy companies, indicating the government’s lack of faith in the future of renewables.

And then the good news–

  • There will be an allocation of an additional $13.7 million over 2 years for the Solar Cities Program, which aids the uptake of solar power for cities throughout Australia. Adelaide, Alice Springs, and Blacktown are already participants in this program.
  • The Office of the Renewable Energy Regulator, which oversees the REC/STC clearinghouse, among other duties, will see a boost to its operational budget, to the tune of an additional $53.2 million over four years.
  • The Emerging Renewables program, which was established to increase investment in innovative renewable energy technologies such as solar, wind, and wave power, will see a jump from in funding from $40 million to $100 million.

John Grimes, Chief Executive for the Australian Solar Energy Society, who summarised the budget changes on the AuSES website, has stated that he advocates the creation of an independent Green Investment Bank for investment in research and development, demonstration and early commercialisation of large-scale solar and the emerging energy sources, and that the Federal Government should allocate a large portion (25%) of the income from a possible carbon price to this bank.

© 2011 Solar Choice Pty Ltd

Sources and Links:

Australian Solar Energy Society, “Budget 2011”
Australian Labour Party, “Emerging Renewables Fact Sheet”
Australian Government, “Solar Cities program”
James Martin II