Australian microrenewable subsidies could stall roll-out of large scale renewables

The Australian trade body, the Alternative Technology Association (ATA), has warned this week that the Australian Opposition’s plans to offer an additional AUS$1,000 rebate for domestic photovoltaic and solar thermal systems could have the unintended effect of stalling the development of large-scale renewables in Australia.

Capital to fund large-scale renewables projects is raised under Australia's Renewable Energy Target regulations from the sale of Renewable Energy Certificates (RECs) earnt from energy generated from any renewables project. The ATA argues that the current incentives are leading to a surplus of RECs, driving down the price and therefore funding for the large projects.

“An oversupply of RECs, generated by a large increase in household solar hot water and PV installations, has caused a dramatic drop in the price of RECs, and put a halt to a number of commercial renewable energy projects”, says Damien Moyse, Energy Policy Manager for the ATA.

Coalition climate policy threat

The Opposition’s climate change policy, released last week, offers households an additional AUS$1,000 rebate to install PV solar and solar hot water systems. While the ATA welcomes additional support for household solar installations, Moyse explains that “slapping on an extra rebate will mean that small-scale solar technologies will continue to dominate the renewable energy market, at the exclusion of the large-scale wind and solar developments.”

“The Opposition has completely failed to account for the effect their rebate will have on the Renewable Energy Target market. It could easily stunt any further growth in Australia’s large-scale renewable energy industry,” he warns.

Gross feed-in tariff the answer

ATA has been calling instead for a national gross feed-in tariff for small-scale solar technology, which Moyse believes “is the most effective way to support communities to install renewable energy technology, while ensuring the REC price is high enough to support large-scale renewable energy projects”.

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