• 06.01.2010

    Federal Government moves to reduce value of solar rebates

  • In a bid to divert complaints about rising electricity prices, the Federal Labor Minister for Climate Change, Greg Combet, has announced that from 1 July 2011 the Solar Credits Scheme will be scaled back. This will reduce the average rebate for a 1.5kW system from $6,200.00 to $5,000.00.

    Federal Labor Climate Change Minister, Greg Combet, has announced that the commencement of the phase-out of the government’s renewable energy certificate scheme (REC) has been brought forward by one year.

    The Minister said that the solar credits multiplier would be reduced from 1 July 2011 on the basis of apparently significant reductions in the cost of a solar energy system and the fact that the government wanted households to bear some cost of the system.

    Accordingly, the following phase-out regime will apply so that the multiplier will be reduced as follows:
    • 5 to 4 on 1 July 2011
    • 4 to 3 on 1 July 2012
    • 3 to 2 on 1 July 2013
    • 2 to 1 on 1 July 2014

    The change will not affect any system installed before 1 July 2011. The impact from 1 July is expected to reduce the value of the rebate on a 1.5kW system from $6,200.00 to $5,000.00.

    The government expects that the effect of the decision will result in a reduction of $12.00 in the electricity bills of all households in 2011 compared to the position if no reduction were implemented.

    So, what does this mean for business and, in particular, for electrical contractors who have geared up to implement solar?

    NECA believes that the solar energy industry in the residential area is still going to progress notwithstanding the reduction/ phase-out of tariffs and rebates. Technology will produce cheaper and more effective products and consumers will continue to upgrade facilities and install new systems to offset the increasing cost of energy.

    The requirements for clean and green buildings will increase and as new subdivisions or renovations and additions take place there will be a need for solar and other renewable energy options.

    We also see continued growth of renewable energy systems in the commercial and industrial sectors driven by the cost of energy from traditional sources and legislative changes aimed at improving the carbon footprint of buildings. Larger solar and wind facilities will continue to be implemented, particularly in regional areas where there is potentially a change coming in the structure of generation and transmission facilities.