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Dumb, dumber, and conflicted: Behind WA’s solar shocker

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The Western Australian state government acted with remarkable speed when it saw the pushback from the public, its own parliamentarians and – quite critically – the federal Coalition over its plans to tear up contracts and halve the agreed value of feed-in tariffs for rooftop solar exports.

Premier Barnett took just four days to achieve his “double renege”, and dump his plans to save $50 million to help bail out the $300 million wasted in its failed attempts to revive the Muja coal-fired power station. But he should never have gone ahead with it in the first place.

It took NSW Premier Barry O’Farrell four weeks to buckle under community pressure when he tried the same thing two years ago. The latest farce tells us two things: the power of the solar lobby has increased dramatically, and it now matters to the electorate – so much so that it reportedly took less than 24 hours for federal Liberal Party director Brian Loughnane to phone Barnett’s office and find out WTF they thought they were doing.

As The West Australian reported this morning, Barnett insists he wasn’t “prevailed upon” to reverse the decision, but admitted “it’s never a good thing to have controversy during an election.” No. As Warwick Johnston pointed out in his piece on Monday, several Liberal electorates could be swayed by malcontent solar households, Liberal or otherwise. One of those, Hasluck Liberal MP Ken Wyatt, was very keen to express his relief on Twitter on Monday.

The real test for the solar industry, households, and governments lies ahead. It was reckless and stupid of the WA government to think it could renege on an agreement, or should for such a small sum. The real issue for the solar industry and aspiring solar consumers is how they are treated into the future. A fair tariff and access to the network, and combating the actions of those generators who now realise that solar is changing the energy game beyond their imagination – as EnergyAustralia admitted overnight in releasing its results – are now the priorities.

It’s hard to know to what extent the lessons from this have been absorbed. The WA government went ahead – despite warnings that its actions would cause a backlash from consumers, just as it had in NSW, and despite advice from the state solicitor that a legal challenge could have merit.

Documents published on the West Australian show that the decision to use the solar move to shore up the state’s depleting finances was approved on July 18 – and then announced four days into campaigning for an electoral poll which is still on a knife-edge.

The documents also reveal that the former energy minister didn’t act for two months in 2011, despite being warned that the scheme’s 150MW cap had already been exceeded. That was partially the reason for the scheme going over budget. Which shows that Coalition governments are as incompetent as Labor ones when it comes to managing such schemes.

The documents also suggest that the average solar customer in WA would have been around $1,500 out of pocket from the move, and the halving of the tariff would have changed the financials to the extent that some would have been unable to gain a positive return from their investment even after 10 years.

The energy market and its policy ranks are full of people who are simply out of touch with new technologies, or are conflicted over their responsibility to the consumer, or the government-owned assets.

The WA government knew its actions were unethical, if not illegal. But they haven’t been the first to ignore such issues when dealing with solar. The Queensland Competition Authority, for instance, earlier this year proposed special tariffs for solar households, even though it agreed that the proposal would be ineffective, more expensive, inequitable, and contrary to the rules of the National Electricity Market.

But it said the tariff should go ahead because it would protect the revenue base of the state-owned networks. The recommendations were rejected by Premier Campbell Newman, who sensed how it would be received in the community.

There’s an inherent conflict of interest that lies over electricity markets in this and other states. The government sets itself up as the infrastructure owner, regulator and price-setter. And though they speak of the need to help the consumer reduce its bills, they are now coming to the realisation that it is their own over-investment in poles and wires and excess generation that is making this impossible. They want to sell these assets, but can’t figure out how to do it and not screw the consumer at the same time. As Chris Dunstan recently wrote, we are headed for an electricity war unless some sense is brought into policy making.

The conservative state governments have railed against the carbon price and the renewables target, even though this contributes a minor amount to rising electricity costs, and recent studies suggest that repealing them will only push retail rates even higher.

The only solution for consumers to reduce their power bills is to go solar, and maybe eventually to battery storage. That is certainly the mood of many households, farmers and commercial businesses. It is just dawning on conservative politicians now that solar is an individual right that is a powerful motivation for action. And actually speaks to their conservative philosophy.

The energy ministers in both NSW and WA have expressed surprise at the take-up of rooftop solar since the generous feed-in-tariff schemes were brought to a halt. NSW Energy Minister Chris Hartcher noted that 70,000 households had signed up for subsidy-free solar in NSW. ”Australians are very excited by solar,” he said. “That is without any encouragement, without  any subsidy … Australians like the idea of solar energy being one of the renewable energies of the future.”

In WA, Mike Nahan, previously the head of the Institute of Public Affairs, a climate-doubting, anti-renewable think tank that has mocked the contribution of solar, said it was clear that solar was “here to stay” because of the ability for households to reduce their bills. ”Here in WA, the rapid growth of PVs on rooftops is having a profound influence on electricity consumption and generation,” Dr Nahan told The West Australian last month.

But it’s not just in Australia that arch-Conservatives are being presented with a new solar reality. In Georgia, the Tea Party teamed up with NGOs and solar interests to force the local utility to accept up to 520MW of solar PV into its network.

The Tea Party – which has railed against climate and renewable policies – pitched it as a matter of citizens’ rights versus the utilities. Extraordinarily, the networks responded by describing it as a matter of “property rights” over infrastructure they had presumed they had exclusive rights to.

That contest is now being replayed in Arizona, which is facing a similar push-back from an unlikely coalition of conservative lobby groups, NGOs, solar companies and the average “Joe six-pack” over moves to dump its “net metering”, which allowed households to feed electricity back into the grid at the full retail rate, and replace it with an Australian-style net tariff of the wholesale price (plus a bit) for exports.

Last month I was in California and talked to many regulators and policy makers in the state. Right now, they also have a 1:1 tariff, but some regulators (and utilities) want that changed. But they simply don’t dare take on the solar lobby, which has the support of Governor Jerry Brown. “They are too powerful,” one said. Then again, there is no coal industry in California to lobby against it.

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  • Warwick

    Giles you’re really living in the past! “It took NSW Premier Barry Unsworth four weeks to buckle under community pressure when he tried the same thing two years ago. ” …He was ALP premier in 1988! :-)

  • juxx0r

    Australia does love it’s chequebook electioneering.

  • Miles Harding

    This says a lot about the opinions held by Nahan, Barnett and others in the WA liberal party.
    I suspect that they despise the fact that solar power has gained such a foothold and thought that the voting public held the same opinion as themselves and that nobody would notice. Very contemptuous!

    The message for these dinosaurs is that they ignore this reality and public opinion at their peril. PV owners, of which there are more each week, are not going to tolerate a government that sets out to disadvantage them after they have gone to considerable expense to do something that our backward facing government has so completely failed to do.

  • BroSheffieldBrotherton

    When I lined up on a very hot summer’ day almost 5 years ago for a good deal (though much more expensive than now) for my first kW of PVs I was struck that at the age of 60 I was probably below the median age of those forming the long line in the sun. Around me were Seniors mainly concerned about protecting themselves from gold-plated escalations in the electricity bills, even if most knew not the major causes. I was there for more do-goody reasons…..
    Living as I do in the eminently solarised, not-so-sunny electorate of Lalor it has been extraordinary to witness the explosion in local roof top systems over the last 3-4 years. The Old Fossils protecting their polluting rivers of gold will fight like stink to protect them and are used to getting pollies to do their bidding.
    But in the end they can only buy influence – they certainly don’t have lots of votes and particularly not in marginal seats.
    The last few days have been very instructive and augur well for Solar Citizens. Here is a great chance for citizens to band together and refuse to be bullied by powerful vested interests. The times have a-changed, if too late in many respects

  • Westerly

    It was instructive to hear Mr Barnett’s mea culpa of sorts on ABC Radio yesterday afternoon. There was a definite acknowledgement that they got the politics spectacularly wrong and those affected had a reasonable expectation their 10-year contract would be honoured. But it was a somewhat grudging apology, tempered by the references to the costs placed on the system by those receiving the subsidy. As you mentioned, it was the energy minister who failed to keep a lid on the scheme and the over-run costs are, as I understand it, pretty much equivalent to the savings that would be made with the halving of the subsidy. In other words, solar users are being implicitly blamed for government incompetence. The points made about the nexus between conservatism and renewable energy are apposite. Eventually many will realise that those with an environmental bent are actually essentially economically rationalists who know the writing is on the wall unless we start accepting the real costs of our lifestyles. Generating our own energy will soon be seen as a fundamental of western democracy rather than a communist-greenie plot to put a red under every bed.

  • Ken Fabian

    The more solar owners the more solar affects networks that failed to read the signs and failed to make them more renewables ready. But the more solar owners the less effective it is to blame rising electricity costs on (as every NSW power bill does) “The Carbon Tax and Green energy schemes”.

    Still no effective challenge to the NSW government using household electricity bills as a vehicle for partisan political messaging BTW. Isn’t Qld doing the same? WA next? Any ideas how effective that form of messaging has been for them? Do solar advocacy groups have anything in the pipeline to address that?