The Solar Credits Scheme is a mechanism within the Small-scale Renewable Energy Scheme (SRES) that provides additional support to households, businesses and community groups that install small-scale solar photovoltaics (PV), wind and hydro electricity systems by multiplying the number of small-scale technology certificates (STCs) able to be created for eligible installations.
The announcement has meant that the Solar Credits multiplier will be reduced to three from 1 July 2011, to two on 1 July 2012, and then reduced to one on 1 July 2013.
Minister for Climate Change and Energy Efficiency Greg Combet explained that this adjustment was made in light of continued strong growth in the industry, the impact on electricity prices, and the impact of the Solar Credits support on demand for other clean energy technologies such as solar hot water heaters.
“Strong demand for solar panels has continued, fuelled by declining system costs, the strong Australian dollar and economy, as well as incentives such as Solar Credits and the State and Territory feed-in tariff schemes.
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“The generous support for solar panels has also contributed to a decline in the installation of solar hot water heaters,” Mr Combet said.
Matthew Warren, CEO of the Clean Energy Council, said that household solar power must not be used as the scapegoat for electricity price rises, while acknowledging that this adjustment to the Solar Credits arrangements is a necessary and sensible decision.
“Electricity price rises are mainly driven by the need for critical investment in network capacity. Painting solar as the problem child is misguided and out of step with what Australians are telling us through their purchasing decisions," he said.
Mr Warren did concede that this adjustment would help create certainty within the solar industry.
The Alternative Technology Association (ATA) responded with surprise at the decision by Mr Combet to accelerate federal cuts to subsidies for rooftop solar panels.
Damien Moyse, the ATA’s Energy Projects and Policy Manager, said the cuts were deeper than expected.
“If the Government’s objective is to stop electricity price rises, they need to have a close look at how much of electricity consumers’ money is being spent on poles and wires,” Mr Moyse said.
In December 2010, other amendments were made to the scheme. At the time, Combet announced that the Scheme would be winding down earlier than originally planned. Specifically he announced that the scheme would reduce from five to four in July 2011, from four to three in July 2012, from three to two in July 2013, and from two to one in July 2014.
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