Announced in the 2008 - 09 Budget, the Federal Government’s changes to the solar rebate program elicited an immediate response amongst solar industry stakeholders and representatives who immediately felt its effects.

Solar rebates revised Announcing the end of the PVRP and the introduction of the Solar Homes and Communities Plan (SHCP), the government said it had increased funding for solar rebates in 2008 - 09 by bringing forward $25.6 million in funding. It also said that it would introduce a means test to make the program more equitable.

Due to the rapid rise in demand access to rebates has been restricted to households with an annual taxable income of less than $100,000. The SHCP has also been brought forward and will end after the 2009 - 10 financial year so that double (up to 6,000) household rebates will be paid over the year. Green loans of up to $10,000 will begin in 2009 to encourage people to purchase solar systems.

The industry responds The changes to the scheme, particularly the introduction of a means test, saw a heated response from the solar industry. In a national teleconference following the announcement, solar PV industry representatives, members and accreditees reported that the industry was at a standstill with financial losses and retrenchment across the industry due to order cancellations.

The Minister for Environment, the Hon Peter Garrett, has said that the means tests is a response to an over heated program. A spokesperson for the Department of the Environment, Water, Heritage and the Arts confirmed that applications for the rebate rose from approximately 30 per month, before the rebate doubled to $8,000, to an average 365 per week in the six weeks leading up to, and including, the budget.

The spokesperson told EcoGeneration that the Minister is closely monitoring the impact of the means test on the solar photovoltaic market and that there is continuing strong demand for the rebate.

Long-term solution the way forward Many in the solar industry agree that a long-term solution is the best way to move the industry forward as well as encourage greater use of solar and other sustainable energy technologies.

Brian England from solar retail company Self Sufficiency Supplies told EcoGeneration that the while a means test is a blow to the industry, an issue that has received less publicity is the restriction on applications for the rebate and the scheme’s length. Mr England said that cutting the scheme back from five to three years will have a damaging impact on the industry. What is needed, he argued, is a long-term solution – a gross national feed-in tariff – to provide solar businesses, from importers and manufacturers to retailers and installers with certainty.

“There is a gross national feed-in tariff being negotiated but because of the logistics of getting that in place there will be a hiatus between the rebate finishing and the gross feed-in tariff becoming a reality,” he explained.

The Clean Energy Council is advocating for a nationally consistent gross metering feed-in tariff from 1 July 2009 – with a long-term price that is set high enough to provide certainty for consumers and industry players to encourage growth of the solar industry. The Council has convened a number of solar PV industry meetings to document the immediate and ongoing impacts of the means testing to the industry. The Council has also spoken with a number of key advisors and bureaucrats in Canberra on behalf of the industry.

A national system to provide the right incentives The Council has welcomed the Victorian government’s feed-in tariff scheme, which will pay households 60 cents for every kilowatt hour of excess clean energy fed into the electricity grid. However it will continue lobbying for a national solar energy reward scheme paid on the total solar energy produced – known as a ‘gross metering feed-in tariff’.

Victoria, Queensland and South Australia all now have schemes in place. However the Council has said that the lack of national consistency, and state schemes only paying a premium on net usage, would not lead to the dramatic increase in domestic solar power needed to impact Australia’s emissions from the stationary energy sector.

Clean Energy Council CEO Rosemary Warnock said that homes and businesses across Australia should be rewarded for all the clean energy they produce.

“Rebates have been an effective policy to build the industry to date, however their level and continuation is clearly at the whim of the government at the time and is therefore not a sustainable option,” she said.

“In light of the government’s new rebate means testing scheme, a national gross feed-in tariff policy is vital to reduce financial barriers and maintain the incentive for all Australians to invest in climate change solutions,” she adds.

Feed-in tariffs have proven to be a successful incentive to stimulate rapid uptake of solar energy in Europe, reducing the domestic and commercial demand for high-emission fossil-fuel power. Some countries are now looking at feed-in laws for large-scale clean energy infrastructure as well.

The future of Australia’s solar industry is not yet certain. However the recent changes to the rebate scheme has once again shown the industry’s commitment to achieving long-term solutions and ensuring solar’s place in Australia’s future clean energy mix.