ACCC urges Nationals to kill rooftop solar rebates as part of “package”

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Sims urges Coalition MPs to abolish rooftop solar subsidies as part of a package including the underwriting of “firm capacity” and price controls.

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Australian Competition and Consumer Commission chairman Rod Sims has taken his campaign to kill rooftop solar rebates to the Coalition government, briefing National Party MPs on Monday that the axing should be taken as part of his “package” of recommendations.

Sims caused uproar last month after his report into energy bills found that consumers were being screwed across the market – by networks, generators and retailers – but saved his most decisive recommendation for the rooftop solar sector, urging the government rebates to be abolished by 2021.

He had entertained the thought of abolishing the subsidies immediately, but chose 2021 as a compromise. An ACCC spokesperson has since confirmed Sims does not have rooftop solar at his home, but intends to install a system soon, presumably before the rebate is abolished.

His recommendation was greeted with horror by the rooftop solar industry and consumer groups, who noted that the rooftop solar rebate was declining each year and would be completely phased out by 2030.

They also point to the major benefits of rooftop solar, and distributed energy, particularly in reducing wholesale prices, and reducing the need for network expansions, and more grid-scale storage and generation, as outlined by the recent Australian Energy Market Operator report.

Sims, however, has only counted the cost of rooftop solar, which he estimates can be as high as 40c a week to some consumers. He says this is grossly unfair.

Sims, who has form on rooftop solar, having recommended retrospective changes to the NSW premium solar tariff when he was head of the state-based regulator IPART, says the idea of abolishing solar rebates needs to be taken as part of a package of measures.

The issue has come to a head because the Coalition is seeking to use another of Sims’ recommendations – that of underwriting new “firm” capacity in a  bid to wind backbench support for the National Energy Guarantee.

Prime minister Malcolm Turnbull hopes to fashion this in a way that makes it easier, or at least appears to make it easier, for new coal-fired generators to be built.

But Sims says it would be best to put the whole package forward as one, rather than cherry-picking some of the 56 different recommendations.

“If you’re going to deal with the affordability of electricity you’ve got to look right across the board,” he told a news conference in Canberra after addressing the Nationals. He is due to address Liberal Party MPs later.

“You can’t just narrow in on one sector or one recommendation.”

Sims’ other recommendations included reducing the cap on retail electricity prices. Analysts said the idea is stupid because retailers will respond by reducing the amount of discounts, and say it won’t reduce bills at all.

John Grimes, the head of the Smart Energy Council, which represents many in the solar industry, said in an email to members that the removal of the rooftop solar rebate – which applies to systems of less than 100kW – “is a very real threat” to Australia’s solar industry.

“It would be devastating for the solar industry and devastating for families and small businesses wanting to slash their power bills,” he said.

“The Turnbull Government seems determined to make it even harder for families and businesses to cope with soaring power bills. The Smart Energy Council will not allow the SRES to be axed now or by 2021.”

Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

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