The Solar Credits scheme was scheduled to commence on 1 July 2009, but has been unexpectedly brought forward to start on 10 June 2009. The news was announced at the same time that the cut-off date for the previous $8,000 SHCP rebate scheme was also revised to 9 June 2009. It is expected that the SHCP rebate scheme, which has been a victim of its own success, will be scrapped in favour of the market-driven system of solar credits at the end of June.
"This Government has overseen more installations of solar systems in 18 months than we saw over the previous eight years, transforming the sector from a cottage industry to part of a productive and growing green-collar workforce,” said Environment Minister, Peter Garrett, adding that the Government had committed over $700 million to the SHCP - more than four times the Government's original commitment - and would ensure all existing eligible applications would be funded to ensure a smooth transition to Solar Credits. “There are currently more than 63,000 solar installations still in the pipeline, including rebates either pre-approved or applications received. This means that not even accounting for Solar Credits, there is about 12 months work based on the industry's current rate of installing around 1,000 solar PV systems a week, still in the system as a result of the Solar Homes and Communities Plan,” he explained.
Under the new system, suppliers can offer discounts to people or businesses installing solar systems depending on the market price of a solar credit, instead of offering households a flat rebate. Peter Garrett says the changes are vital for ensuring the long-term sustainability of the solar industry, however the Opposition's environment spokesman, Greg Hunt, says the early end of the rebate has thrown the industry into chaos: “Their expectation of a smooth transition has been dashed and that means consumers who have been planning on solar panels will again be messed up by Mr Garrett's mismanagement”.
Victim of its own success
The current $8,000 solar rebate has come under heavy fire in recent months from many sectors after the Rudd government earlier this year implemented a means test that blocked households with an income of over $100,000 from receiving the rebate. Although Adrian Ferraretto, managing director of The Solar Shop –
According to the draft legislation which has been released, the solar credits system will work by allowing owners of solar panels to earn five times the current level of Renewable Energy Certificates (RECs) for each mega-watt hour of electricity produced by their solar panels. As RECs can be assigned to solar equipment suppliers, the value of the certificates can be offered as a point of sale discount of up to $7,500 for purchasers of solar PV systems. Although the Solar Credits scheme will be available to many more Australians, it will be less generous than the SHCP rebate in many circumstances.
Peter Garrett stated the solar credits multiplier will be provided for new micro-generation systems up to 1.5 kilowatts during the next financial year and would phase down from then to 2015-16, while the Government expects that the legislation backing the new system will be passed by Parliament next week.
