Kick out solar installers, says industry

Archived News, Posted on 18 Jan 2010

Some of Australia's biggest green energy players have joined forces to urge the Federal Government to remove solar water heaters from a scheme designed to entice investment in renewable power.

After last month's failure at Copenhagen to secure a binding global agreement on cutting carbon, the companies have taken aim at the other plank of Australia's green energy policy, the renewable energy target.

The target requires 20 per cent of Australia's power to be from renewable sources by 2020. But the scheme has come under heavy fire since a $1600 subsidy flooded the market with renewable energy certificates from domestic solar water heaters, causing the certificates' value to almost halve.

In a submission to a Council of Australian Governments inquiry into certificate prices, companies including AGL, Pacific Hydro and the global wind turbine makers Vestas and Suzlon are calling for all water heaters to be removed from the renewable-energy target.

At stake is a huge wave of green energy investment that is needed to meet the target. The companies say they will postpone that investment until the certificate prices rise.

For instance, last month AGL said it could abandon the southern hemisphere's biggest wind farm, worth $800 million, if the plunge in certificate prices was not addressed.

The industry estimates the total investment hinging on the renewable energy target at up to $30 billion.

The document also outlines a ''road map'' for changes it sees as necessary to make big cuts to greenhouse gas emissions this decade. The group called for various state energy efficiency schemes, which provide extra revenue to companies, to be amalgamated into a single national scheme.

The Clean Energy Council, an industry group that also includes large gas companies, said in its submission that financing big renewable projects was impossible while certificate prices remained low. "The principle objective of developing a competitive, world-class clean energy industry in Australia will not proceed until this [certificate] price recovers," it said.

The calls come amid claims that solar hot-water installers are extracting windfall profits from the scheme.

But the solar hot-water industry has denied it is to blame for the fall in certificate prices, pointing out that prices in the previous scheme, the Mandatory Renewable Energy Target, also fluctuated.

The largest maker of solar water heaters, Rheem, said exclusion from the scheme would threaten hundreds of jobs in the sector.

Source: The Sydney Morning Herald