The Victoria government is coming under immense pressure to modify the design of its $1.3 billion solar rebate scheme after the August quota was filled – concert-ticket style – in just 90 minutes on Tuesday morning, effectively putting an artificial cap on the market.
After opening at 9am, the August allotment of 3,767 solar panel rebates was completely filled within 90 minutes by some estimates, and by 11am the counter on the Solar Victoria website was showing zero rebates available.
The industry is apoplectic. It welcomes the rebate, and particularly its focus on lower income housing, but it says the design of scheme is effectively strangling the market, and this is beginning to show in data on solar installations and small scheme certificates.
The current situation can’t go on,” said Pawel Podolski, the head of the National Electrical and Communications Association
“We are seeing a race to the bottom, with many of the best and most experienced electrical contractors abandoning the solar industry. As well as being a travesty for these hardworking small businesses, the loss of talent and experience means standards will fall and the public’s safety could well be at risk. ”
Reports came through on Thursday that more small businesses were shutting up shop, after years in the business, due to the frustration. New data showed overall demand in Victoria collapsing, as the market grew in other states.
Concerns were sparked when the scheme was suspended in April, and then – when it resumed in July – the new-look mechanism saw a total of 3,333 rebates snapped up within three days.
And while this underscores the popularity of the policy with consumers, it also confirms industry concerns that the design of the scheme is causing a stop-start effect, effectively strangling the market and having a disastrous impact on jobs and businesses.
State energy minister Lily D’Ambrosio has insisted that the government will make no changes to the design of the scheme – apparently the work of the office of Premier Daniel Andrews – because it was an election promise, and as such could not be touched.
As we reported here yesterday, the launch of the August allotment had been dubbed “D-Day” for the PV industry in Victoria, when the “scale and size of the solar rebate disaster” would be confirmed. Both peak bodies, the Smart Energy Council and the Clean Energy Council, are calling for change.
The Smart Energy Council, which last week led a public protest outside state parliament, said businesses were being forced to lay off staff, and some had closed down – with other set to follow if urgent changes to the scheme were not made.
“We (have) heard incredibly distressing stories of people who don’t know how they’re going to survive. Business owners were in tears as they recounted their attempts to navigate the system,” said SEC chief John Grimes.
“Solar businesses should not be forced to suffer this much pain, wear incredible costs, and push workers out into the cold, just because the government can’t manage a basic scheme.
“Victorians wants lower power costs. They support this scheme, but we all just want it to work. And right now, we’re a long way from that.”
The SEC and its members have repeatedly called for urgent changes to be made to the design of the scheme, including a tightening of the eligibility criteria, to free up more of the market to continue functioning under business as usual.
Namely, they have argued that the combined income threshold for households – currently capped at $180,000 a year – should be halved, to focus the scheme’s benefits more closely on low-income families.
GONE IN 90MIN. Solar rebates exhausted within 90min. Now, solar installers will face tough choices like whether to lay off staff, or shut their doors for good. What a disaster. @LilyDAmbrosioMP you have to fix it.
— SmartEnergyCouncil (@SmartEnergyCncl) August 1, 2019
In comments on Thursday, Grimes said the quick sell-out was bad news for most consumers too, who would now be forced to wait another month to see if they were able to access a rebate.
“You are more likely to encounter a unicorn in Victoria today, than meet someone who was successful in securing a rebate”, Grimes said in an emailed statement.
“Because there are so few rebates, and such high demand, we estimate that around 90 per cent of customers who had accepted a quote, and are eligible, missed out.
“And that does not count the thousands of Victorian households who want to access the scheme to slash their power bills.”
But the state government is holding fast on the design of the $2,225 cash-back rebate which, for the first financial, will year release a strict quota of a few thousand rebates for application each month.
In an interview with Giles Parkinson on Wednesday, D’Ambrosio stressed there would be no changes made to the current design of the rebate, which she said was “absolutely getting the results” intended.
“More people have been able to make a decision to buy solar panels to save money – people that otherwise would not have invested, because they didn’t have the upfront cost to actually enter the market,” D’Ambrosio said on the sidelines of the conference.
“So the market is being expanded as a result of our rebate program.”
“We shouldn’t be confusing the number of rebates that are released monthly by the government with the opportunities in the market for the industry,” she added.
“There are significant opportunities for the market that are outside of that rebate program. So the notion that, somehow, there is a cap is incorrect,” D’Ambrosio told One Step.
That is being proved wrong from new data emerging this week which shows small scale rebate market effectively capped. New data from SunWiz showed installations in June plunging, with residential levels at lowest point since 2017.
Victoria had been the strongest state in the country, leading NSW and Queensland with more than 40MW of small scale installations. But that has fallen by nearly half in June, the Sunwiz data shows.
The Clean Energy Council said people are holding off installing solar altogether until they can claim the rebates.
“It means the state’s solar industry is being turned on and off like a tap – and for the whole of August the tap was only on for a couple of hours,” said the CEC’s director of distributed energy, Darren Gladman, in a statement on Thursday.
“Government programs should not be like trying to buy concert tickets, where access depends on whether you can get through in the few hours that it is open.
“The intention of the program was welcome, but the way it is being rolled out is turning into a worst-case scenario for the state’s solar industry. This is obviously the opposite of what was intended,” he said.
“The industry has put forward a range of options to improve Solar Homes, but the first step to fixing it is a recognition that there is a problem. We are calling on Victorian Premier Daniel Andrews to urgently intervene and lead a review to revisit the criteria for the program.”