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Right wing push to slash incentives for rooftop solar

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AAP Image/Tracy Nearmy

Federal government incentives for rooftop solar are under threat again, this time from a sustained effort from right-wing politicians and media that is being compared to the “$100 lamb roast” and “Whyalla will be a ghost town” campaigns against the then carbon price.

The latest campaign against rooftop solar includes grossly inflated estimates of the cost of the federal rooftop solar subsidies, and no mention of the considerable benefits .

Typically, it is being led by the Murdoch media, which trumpeted a front page “exclusive” (subscription required) on Monday that suggested that the cost of rooftop solar subsidies would reach $100 for each and every household in 2018 because of the big increase in rooftop solar installations.

It quoted the ubiquitous Craig Kelly, the chair of the Coalition’s back-bench environment and energy committee, as describing the rooftop solar subsidies as a “reverse Robin Hood scheme” where “we are increasing the electricity prices on the poor to reduce electricity prices for the rich”.

But the solar industry says the criticisms and the costings included in The Australian article fundamentally misunderstand how the system works.

Ric Brazzale, director of Green Energy Trading, a company that trades certificates and also provides market data, said the article is “another beat up on the solar industry and is using some very spurious analysis.

“It brings back memories of the $100 lamb roast scare campaign,” he said, in reference to Barnaby Joyce’s infamously absurd and misplaced warnings about the impact of the carbon price.

Brazzale provides this table above, which sets out his estimates of the cost pass-through impact to customers for the certificates issued to new rooftop solar systems.

Instead of $100 a household, “the expected cost of $40 per household in 2018 is higher than it would otherwise be as the 2017 Target was exceeded and the surplus is added to the 2018 Target,” he says.

“The average for the two years is $29 per household – approximately equivalent to the average cost of the scheme according to the AEMC (Australian Energy Market Commission).”

The scale of the federal government support is also winding back – from 15 years of electricity generation in 2016, to 14 years in 2017 and 13 years in 2018. It will phase out completely in 2030.

Still, rooftop solar is more popular than it has ever been – including when some state governments offered overly-generous feed-in tariffs in 2010, 2011 and 2012.

In 2017, rooftop solar installations totalled a record 1.057MW, and already the uptake of the first two months of 2018 (118MW in February alone) suggest that record will be broken again in 2018. Queensland  now has more than 2GW of rooftop solar, although NSW was the biggest installer last month.

Right-wing attacks on carbon pricing, renewables, and more recently battery storage and demand management, and even vehicle emission standards, have become common place. The only beneficiary has been the fossil fuel industry.

Former prime minister Tony Abbott famously predicted that the carbon price would turn Whyalla into a ghost town. Now its future depends on the ability of new Whyall Steelworks owner Sanjeev Gupta to deliver on his plans to build up to 1GW of solar and storage to reduce energy bills to manageable levels.

The criticism of the residential solar support scheme has also been led by Liberal Democratic Party Senator David Leyonhjelm, who used the same numbers later reprinted by The Australian when taking up the issue in February.

“Subsidies are to blame,” he told the Senate on February 14, and called on the Coalition to cut the market cap to the prime of the small-scale technology certificates from $40/MWh to $30/MWh. The Coalition replied that the scheme was being phased out, as mentioned above.

This was followed up last week by comments from the Grattan Institute, a conservative think tank on energy issues, which said it was time for renewable energy subsidies to be phased out.

Criticism of the small-scale solar scheme invariably ignore the considerable benefits of having such a large amount of rooftop solar in the grid.

Network owners and operators in all states have highlighted how rooftop solar has reduced and deferred the events of peak demand, thereby reducing the cost of wholesale electricity because there is less need for peaking plant and less opportunity to trade on scarcity.

The NSW government has noted rooftop solar’s key role in the heatwaves of February 2017, and February this year, and the Australian Energy Market Operator has highlighted the important role distributed PV played when soaring heat pushed grid demand to “remarkable” record levels in Queensland last month.

“The renewable energy scheme is one of the most successful greenhouse reduction policies that Australia has in place and has been pivotal in the transition of our energy supply away from fossil fuels,” Brazzale says.

“Residential solar PV has delivered benefits to more than just the households that have installed it.

“Numerous studies have found that it provides a dampening effect on wholesale power prices that benefit all customers (merit order effect). In addition, without the contribution of solar PV, peak electricity demand would be much higher and our electricity system would have been put at risk.”

The “take-up” by rich households has been overplayed, as numerous studies have shown. However, what has been surprising has been the lack of effort from state and federal governments in making rooftop solar available to low-income households, renters and apartment dwellers.

That is now being addressed by some governments, such as in South Australia, where Labor has proposed two different schemes that would remove the up-front cost of both rooftop solar and battery storage to low-income households.

For now at least, it appears the Coalition is resisting calls from outside and within. A spokesman for federal energy minister Josh Frydenberg said:

“According to the Australian Energy Market Commission (AEMC) the average cost to households over the last five years of the SRES (small-scale renewable energy scheme) has been around $29 a year. With the price peaking in 2012 at $44 for the year.”

“The price of small-scale certificates is set by the market, with a maximum of $40 per certificate.”

(Because of the over-supply last year, the market price of the certificates fell to $30/MWh, leaving some installers who had not prepared for such a fall in some difficulty).

Frydenberg’s spokesperson continued: “The AEMC forecasts that residential electricity prices will fall over the next two years as renewable energy, including small-scale solar, supported by the Renewable Energy Target enters the system.”

A similar dead bat was played by Frydenberg’s representative in the Senate, Simon Birmingham, when asked by Leyonhjelm in February.  

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  • MaxG

    Subsidies for the people is never a good thing; the government should only subsidise business. (sarcasm) It is right down the neoliberal and right wing agenda.

    A recent discussion went like this: ‘all these government handouts for these lazy people, and these solar system subsidies, with my tax dollars.’ … me: ‘and you do not support that?’, ‘no way!’, me: ‘so why should my tax dollars pay for your private health insurance or subsidise your private school fees?’ … silence… and then “f* off; this is entirely different”.
    With twisted logic like this, no wonder this mindset exists.

    • Joe

      Yep, when it comes to anything connected with RE you just battle to have a logical debate with some people. They have this set mindset that RE is evil and it must be destroyed.

    • Rod

      “Never argue with an idiot. They will only bring you down to their level and beat you with experience.”


      George Carlin

      • plainview2

        Carlin was a master of language and insight of social conditions.
        The alt right has masterfully organized with the intent of destroying democracy.If the human species is to survive we must become as organized, as forceful in our quest for the high road for all of us.
        We are all in the same boat.

    • phred01

      Didn’t the PM put solar on his house with subsidies

      • Joe

        He did. Plus the home battery as well but that as far as I know isn’t subsidised. The PM shouldn’t get the credit though because it was the idea of his son Alex.

    • Joe

      The Kelly and The Leyonhjelm, I know that they are MP’s but me thinks people pay too much attention to the nonsense that they spit out.

      • Hettie

        Is it attention, Joe, or bemused astonishment?

        • Joe

          I’m astonished that these two ever got elected as MP’s. They clearly do not represent the majority of punters.

          • Chris Ford

            Not sure about that Joe. I have a nasty suspicion that their stupidity might sadly be representative.

          • Joe

            Indeed, you really do have to wonder.

          • plainview2

            Thus the demise of great public education..Will the majority get it.

          • JWW

            I guess that stupidity is seemingly widespread has all to do with the media in this country. If you only ever watch cooking shows and Australian Spartan and read the Telegraph, how should you form a well-informed opinion on any complex topic?

    • Hettie

      And what if your interlocutor decided to put pv on his own roof? How fast would his opinion of stcs change then, do you suppose? Mach, or C.
      As in M C squared?

      • Ren Stimpy

        Isn’t that Mass in M C squared? As much as I like Mach as well.

        • Hettie

          E=MCsq
          Energy = Mass × speed of light sqared
          Mach = speed of sound.
          And yes, I’m just showing off, but I thought this audience might appreciate the jest.

      • Henry

        What I’d love to know is just how many of these CoalFacers actually have roof PV themselves, but are depending on no-one actually trying to find out.

        • Hettie

          Who knows? Such hypocrites, the lot of them.
          The sooner we get to vote them out, the better.
          Earliest reasonable date, because of the Senate terms, is August 4, latest, May next year.
          Please, dog, bring it on!

    • neroden

      I usually stick it to them after that, with “So you want to sponge off my tax dollars, but you don’t want me to get anything from your tax dollars? I think we know what sort of a person *you* are.”

      • Calamity_Jean

        Sounds a lot like my ex-husband’s philosophy of life: “What’s yours is mine, and what’s mine is mine too.” Which is a large part of why he’s my EX-husband.

        Fortunately my current husband isn’t at all like that.

  • Chris Jones

    While renewable energy installations are subsidised in various ways, it’s hard to compare it to other subsidies that exist for every other form of generation. And when is a subsidy not a subsidy, rather an ‘investment by a government’. For example, would the construction of a coal fired power plant on the Darling Downs by SC energy constitute as a subsidy given it was funded entirely by the Queensland Government? Until all public money flowing towards energy projects is clear and visible, I really don’t know who to believe.

    • Hettie

      Really? Do you at least know *not* to believe anything Murdoch or his rags say?

      • Chris Jones

        Well that much is a given 🙂
        We know the government uses our money to subsidise all manner of service, and for the most part that’s fine. But to single out renewable energy projects as being disproportionate recipients is daft. Besides, at some point the need for subsidies will disappear completely based on the projects merits alone; which could only be described as a success.

  • Joe

    I love it when the political Hard Right knuckle draggers with their cheer squad of Rupert and the radio shock jocks bang on about renewable energy subsidies. It just exposes them for who they are…in the pockets of the Big Fossil Fuellers. It is just so evil that RE gets any subsidies but it seemingly is 100% okay that FF gets subsidies…it must be okay because the Hard Righters never mention scrapping FF subsidies or better still imposing the true price of using FF to include the cost of climate change actions, health costs that ALL taxpayers pick up and the damage to our land and water resources. Out of yearly bills of hundreds of dollars I’d say an average amount of $29.00 per year is a rather modest and affordable INVESTMENT by all Australians in trying to maintain a habitable planet.

    • phred01

      Fear that monies will dry up from the coal lobby

  • Hendo

    Groan. Once again the nay-saying right is pushing against solar and pushing for coal.
    I would like to see these “right” people actually named, especially as either elected officers or as party hacks. At least then we can decide to vote for them or toss them out.
    But please, no more mystery about where/who this right wing influence is. Name them and vote them out.

    • Joe

      Surely The Abbott is one the ‘righters’. But he is like the proverbial cockroach, just can’t get rid of him, he gets re elected time and time again.

      • Hendo

        Joe that’s one for sure. Mungo McCallum referred to John Howard as “the un-flushable turd”

        But Abbott has his supporters – who are they?

        • Joe

          His Federal seat is Warringah on The Northern Beaches of Sydney. It is heartland Liberal territory…they’d vote for a snail if ‘Mr Snail’ was put up as Liberal candidate.

  • Andrew_Nichols

    I have solar and the ridiculously high Qland FIT (youd have been a mug not to have taken it up) but I am under no illusion that the latter is unsustainable. Solar is good but there is no way it should be fed into the grid as its sine wave is poor and it pokes energy into the grid when it’s usually not needed. It should only be generated for the household to offset daytime use and charge a battery for the night if you have one.

    • Ren Stimpy

      Ramping of distributed generation (acceleration along the cost curve) was always just phase 1 – mission accomplished. Yes those initial incentives can be and have been largely withdrawn. Now to phase 2 – ramping of distributed storage.

    • Ian

      Solar should feed into the grid anytime it can displace coal generation.
      If the sine wave is as bad as you suggest, I would have thought AEMO etc, would have done something to stop solar pv

    • Barri Mundee

      Surely you jest!! Please provide some evidence for that.

    • nakedChimp

      Hehe.. I dare you to get an oscilloscope and check the ‘sine wave’ that the grid provides and compare it to what a inverter provides.
      The grid sine is being deformed by all those PFC devices, while your inverter does work against that and reinstates it plus a couple of other things.

    • solarguy

      Sine wave from an inverter is superior to the grid in quality.

  • Durham 52

    These mean spirited and greedy morons know that the horse has bolted and they can’t stop the uptake of solar, they are just hoping that driving the “politics of envy” might lead to governments cutting subsidies and feedback tariffs to slow down the uptake. Their only aim is to stretch out the years of profiting from the old dirty power sources for as long as possible.

    • Ian

      Wow, your comment is succinct and accurate.

  • Ken Dyer

    Do people actually listen to these drop kicks?
    Somebody needs to tell Mr Kelly and his dopy mates to remove their collective heads from his fundamental orifice.
    The latest figures from the USA unequivocally prove that pollution from EV’s is dropping and will continue to do so.
    https://www.greencarreports.com/news/1115679_electric-cars-got-even-cleaner-in-a-year-new-grid-data-shows.
    As for electricity bills going up – I say BS!
    My electricity bill has been in credit for months.
    In Queensland, you can get interest free loans for solar
    https://www.solarquotes.com.au/blog/queensland-solar-initiatives-mb0264/
    The good news is that Australia only has to put up with these clowns until November 2019 – It can’t come soon enough!

    • Joe

      I think your timing is a being a little too generous to The COALition. Next Fed Election is due in the first half of 2019….we get rid of them just a little bit earlier!

    • Hettie

      Mine too. No outlay since Nov 14th, power purchased to end of June, account $103 in credit.
      FIT of $78 credited today, the lowest so far, but yesterday the 5 kW system produced a handsome 34.4 kWh, and today at 18:06 hrs still spitting out 1354W, it is up to 33.8 kWh.
      I think best ever was 35.5 but not sure. The inverter has only been talking to the smartphone for a week.

      • Joe

        May the Sun continue to shine upon all of us

  • John Saint-Smith

    Subsidies to the rich. That’s rich coming from the unrepentant subsidisers of negative gearing. According to both Hockey and Morrison, the recipients of tax deductions for negative gearing are ‘overwhelmingly’ ‘mum and dad investors’ trying to ‘get ahead’ by saving for their retirement. Curious that almost none of these ‘battlers’ earn pre-tax salaries less than $100,000. Meanwhile the vast majority of solar panel installers are real middle income earners who have bought very cheap low subsidy panels with almost no feed in tariff in an attempt to reduce their skyrocketing electricity bills.

    In another life, John Howard would have called these people aspirational battlers.

  • bedlam bay

    We should remind Abbott, Kelly and their fellow flat earthers that farmers and miners including BHP. and RIO receive diesel rebates worth billions.

    • My_Oath

      So do all the farmers, fishers, foresters and any other off-road industry. It was a user-pays system for the roads. Its a repayment of excise that shouldn’t have been collected in the first place.

      The problem is we don’t have a user pays system for emissions (aka carbon price).

      Banging on about the excise rebate doesn’t get anyone anywhere because it isn’t a subsidy. Arguing that the Coalers are wrong about subsidies, by being wrong about subsidies yourself doesn’t get us anywhere either.

  • Turnbull should be insisting on fair and balanced reporting of the facts in place of the ideological deception on rooftop solar PV installations.
    Electricity consumers are SAVING money by not being forced to pay for EXTRA distribution capacity that is not needed because the solar systems are generating power near where it is consumed.
    The image below is from an article cited in a report commissioned by the Minerals Council of Australia. https://uploads.disquscdn.com/images/6c3ac2b479700423c6f2a6c487a74baac8b844e03c6b13784a8325bbbd2b3d5d.png

    • Hettie

      You have got to be joking! Turnbull needs the Murdoch lies to keep the support of the idiots.

  • Chris Fraser

    The STC “subsidy” – if it’s even possible to ignore the system benefits – costs less than 3 days per month of the daily Service Access Charge. Well hello pot kettle black … arguably the retailers never earned that much for reading meters only once every three months.

  • Ian

    How can one turn around such tiresome objections to solar subsidies that have been rebutted carefully time and time again? 1. Go through the process of explaining the benefits of distributed renewables carefully and patiently again? 2. Get really, really angry that this political button has been pushed. 3. Ignore this jibe as baseless hot air. 4. Use this to rally voter support from the millions of homeowners who have already installed solar by showing that the FF lobby are threatening their efforts to install solar or at least benefit from the solar they have already installed, and counter lobby for better FiT’s for solar households, or for an extension of the STC’s, or for EV and home battery subsidies which are so sorely needed.

  • Pete

    “…the costings included in The Australian article fundamentally misunderstand how the system works.”

    Knowing The Australian, they don’t “fundamentally misunderstand”, they deliberately misrepresent.

  • Cooma Doug

    Tony Abbott is seeking tenders to put a coal plant on his roof.

  • plainview2

    Reading this article from the US and the reference to the Rupert Murdoch syndication empire; reinforces what is going on in democratic societies throughout the world.
    Anything that will benefit the working classes to allow the people to be informed and
    take financial advantage of technology is under attack.
    If this is the new world order governed by corporate interest; the ideals of progression, equal opportunity, freedom of information, kiss individual rights goodbye.
    The net metering issue has been a mini education in fascism’s continued efforts to institute a new dark age.

    • nakedChimp

      it’s private control of monopolies that you see at work here. Strengthening their grip on everything and distorting markets (not just in the common sense) which lead to inefficient and highly unsustainable outcomes.
      And the mother of all is the zero lower bound interest problem of modern day currencies.

  • Electric Boogaloo

    But don’t you crow about how renewables are cheaper than fossil fuels?

    If this is the case, why are you so up in arms about the removal of subsidies?

    Something doesn’t add up.

  • DevMac

    As is often the case, they’re just treating the symptom rather than the disease.

    If these anti-renewables crusaders actually cared about people paying too much for power, they’d have piped up A LONG TIME AGO when the networks were gold plating their infrastructure.

    This diagram shows the price increases of power supply and consumption against CPI over the period between 2007 and 2015:

    http://electricity.atcf.com.au/cost-component-percentage-increase-9-years/

    Anything that increases in cost over and above CPI will hit lower income households harder, especially when it’s a utility / necessity, such as electricity. A luxury good it ain’t.

    Why aren’t these commentators supporting regulations on the generators that are gaming the system to cause the high prices in the first place? The subsidies encourage lower income earners the opportunity to escape from high electricity prices. Removing the subsidies would only further entrench the divide.

    Means-test the subsidy on a sliding scale if necessary, but removing it would make the problem worse.

  • DevMac

    As is often the case, they’re just treating the symptom rather than the disease.

    If these anti-renewables crusaders actually cared about people paying too much for power, they’d have piped up A LONG TIME AGO when the networks were gold plating their infrastructure.

    This diagram shows the price increases of power supply and consumption against CPI over the period between 2007 and 2015:

    http://electricity.atcf.com.au/cost-component-percentage-increase-9-years/

    Anything that increases in cost over and above CPI will hit lower income households harder, especially when it’s a utility / necessity, such as electricity. A luxury good it ain’t.

    Why aren’t these commentators supporting regulations on the generators that are gaming the system to cause the high prices in the first place? The subsidies encourage lower income earners the opportunity to escape from high electricity prices. Removing the subsidies would only further entrench the divide.

    Means-test the subsidy on a sliding scale if necessary, but removing it would make the problem worse.

  • DevMac

    As is often the case, they’re just treating the symptom rather than the disease.

    If these anti-renewables crusaders actually cared about people paying too much for power, they’d have piped up A LONG TIME AGO when the networks were gold plating their infrastructure.

    This diagram shows the price increases of power supply and consumption against CPI over the period between 2007 and 2015:

    http://electricity.atcf.com.au/cost-component-percentage-increase-9-years/

    Anything that increases in cost over and above CPI will hit lower income households harder, especially when it’s a utility / necessity, such as electricity. A luxury good it ain’t.

    Why aren’t these commentators supporting regulations on the generators that are gaming the system to cause the high prices in the first place? The subsidies encourage lower income earners the opportunity to escape from high electricity prices. Removing the subsidies would only further entrench the divide.

    Means-test the subsidy on a sliding scale if necessary, but removing it would make the problem worse. (the anti-renewables crusaders would probably argue to make the means-test based on ‘tax paid’ so they could claim the full subsidy themselves).

    • Calamity_Jean

      You can delete the extras. Put your cursor on the top line, the one with your name in it, and look to the right. Among other things, a little downward-pointing triangle will have appeared. Click on the triangle, and a box with two choices will appear: “delete” and “flag as inappropriate”. Click “delete”.

      • DevMac

        Thanks! done.

        • Calamity_Jean

          You’re welcome. Knowledge is one of the few things a person can give away and still keep.

  • DevMac

    API failure caused duplication

  • trackdaze

    Does of course ignore the fact that solar reduced and delayed the peak and generally has reduced wholesale costs.

    Also ignores the fact that It is majority funded by the consumer. Without it we would have needed to build 3 hazelwoods.

  • neroden

    The COALition will bend over backwards to attempt to protect coal. It still won’t work.

  • RobS

    good, then it can continue to be the cheapest option but we can finally end the “it only gets installed because of subsidies debate”