We want a real solar feed-in tariff!

The Brumby State Government continues to support an ineffective solar feed-in tariff, that just won’t do the job to encourage the take-up of solar panels across the state. As was reported in The Age this week, the Minister for Coal Industry Profits, Peter Batchelor has said that if the amendments to the tariff put forward by the Greens pass the State Upper House (with support from the opposition parties) then the solar feed-in tariff scheme will be pulled completely.

Yarra Climate Action Now has written to the State Member for Richmond, Richard Wynne, to ask the State Government to support the amendments and pass a scheme that will actually work to encourage clean solar energy. An abridged version of the letter is below. For the full version send us an email or leave a comment on this post.

This is a no-brainer really. We encourage all members of the public to email their local member in support of a gross solar feed-in tariff.

To see our previous posts on this issue with links to further information click here and here, and see Environment Victoria’s web site.

Dear Richard,

The reason for this letter is the government’s failure to deliver on its clear election commitment to introduce an effective gross feed-in tariff to stimulate the growth of clean renewable solar electricity in the State of Victoria.

At the last election the Victorian State Labor Government committed itself to the institution of a ‘German style’ gross feed-in tariff to promote privately generated solar electricity. As is well known by now the institution of such a tariff which commits electricity generation and distribution companies to purchase all privately generated solar electricity at a premium rate was the centre-piece of the rapid expansion of photovoltaic solar electricity generation in Germany over the last decade and a half. This imposed small cost increases on conventionally generated electricity but created a great deal of employment in a rapidly expanding industry.

For reasons best known to itself after an acrimonious and difficult debate between proponents and opponents of such a scheme within the State Government, the Government finally adopted a position that committed the relevant industry bodies to purchase back from private generators only solar electricity generated in excess of requirement. In other words they would pay for that electricity that entered the grid and take as a free gift the reduction in overall demand generated by the installation of the equipment in the first place.

The government did this despite advice that such a scheme – known as a net feed in tariff – would do nothing to stimulate change to clean renewable solar electricity. It did this in the full knowledge that such a measure would discourage local investment by overseas producers of solar panels that the government was seeking. The rationale for rejecting a gross feed in tariff for a net feed in tariff was that introduction of the former would cost low income households too much in increased energy bills. This occurred despite credible informed advice to the contrary and the example of Germany where this did not happen. The justification for this action was a set of figures produced at the last minute by Energy Minister Peter Batchelor the source and basis for which are unknown and which Batchelor has consistently refused to discuss with the press, hiding behind spokespeople from his staff.

There is still an opportunity to salvage the solar laws as they pass through Parliament, so that we can develop a thriving solar industry in Victoria. The importance of making the Brumby Government’s solar laws meaningful for industry is now even more critical given the Federal Government’s plan to cut the solar rebate scheme as of 1 July 2009, and replace it with a less effective Solar Credits Scheme – effectively halving the support for small-scale solar installations. In Victoria this scheme must be complementary to any renewable energy target that Victoria has, it is not one or the other, but both. The climate science demands a transition to 100% renewable energy as soon as possible. We need to be taking emergency action now.

If the Government’s proposed solar laws pass through the Parliament in their current form, they will do little to support solar power, the solar industry development, or reduce greenhouse gas emissions. We call on you, as our elected representative in the State Parliament, to work to implement the amendments to the legislation proposed by Environment Victoria, the Alternative Technology Association, the Moreland Energy Foundation and the Electrical Trades Union that are summarized below.

1. Allow business and community organisations to participate in the scheme.
The Brumby Government’s model excludes business, local government and community organisations like churches, from participating. This restriction should be removed to encourage all sectors to invest in renewable energy.

Premier Bracks made clear during the 2006 election campaign that small businesses would be included in the scheme. The Brumby Government must deliver on this election commitment, and also allow for the inclusion of community buildings in the scheme.

2. Increase the system size limit for the 60c per kWh tariff to 10kW.
The Brumby Government’s Bill excludes any solar systems of more than 3.2kW. This will effectively deter households from installing larger systems – a ludicrously perverse incentive for a scheme that is supposed to encourage solar power.

3. Make the 60c per kWh payable on gross, not just net generation.
The Victorian Government has shunned the experience of over 40 nations with feed-in tariffs and has decided to pay the tariff only on the excess generation of solar electricity that is fed back into the grid, rather than on all of the electricity generated.

The Government’s own departmental and independent advice (leaked to The Age earlier this year) stated that the proposed ‘net’ feed-in tariff would do nothing to increase the uptake of solar power in Victoria to 2020. This advice also found that the ‘gross’ feed-in tariff would lead to a seven fold increase in Victoria’s solar uptake to 2020.

4. Ensure that the small-scale renewable energy producers included in the scheme are actually paid for the electricity they generate.
Under the government’s proposed scheme, those eligible for the 60c tariff for feeding electricity into the grid would not actually be paid. The legislation suggests that a customer would receive a credit on their electricity bill if they fed energy into the grid. This amount would roll over to the next bill if it was not used.

However, if this credited amount of electricity was not used within 12 months, or if the customer changed retailer it would simply evaporate. The customer is left with nothing. For an energy efficient household with a 3.0kW system this lost credit could amount up to $600 and would establish a perverse incentive for the householder to consume more energy towards the end of the twelve-month period.

Failure to rectify these flaws in the proposed legislation would make it difficult to escape the conclusion that, despite its election commitments and the positive effects springing from them in terms of employment growth and industrial investment, this government is committed to avoiding meaningful action to promote the growth of clean renewable solar electricity.

Thus far the Brumby Government has a lamentable record on climate change action (as opposed to rhetoric). The voters in the Seat of Richmond are aware of the climate science and want urgent, emergency action to prevent runaway climate change and create green jobs. We hope that you will heed this letter and finally begin to fulfill a clear and unambiguous election commitment to support the growth of the solar electricity industry by introducing an effective gross feed-in tariff.

Yours faithfully,
Yarra Climate Action Now