Australia’s competition regulator has once again called for an end to the Small-Scale Renewable Energy Scheme (SRES) that’s responsible for the national solar power installation rebate.
Australian Competition and Consumer Commission (ACCC) chair Rod Sims was speaking at the Australian Financial Review Energy Summit this week. He said environmental schemes like the SRES contribute to high electricity bills.
In the past, the ACCC has also blamed high prices on “excessive spending” by distribution networks and “confusing” retail price structures.
Solar rebates: an unnecessary cost?
This week, Sims told the summit the SRES incentive to install solar was an “unnecessary” cost to consumers, RenewEconomy reports.
His argument is that under the SRES, electricity retailers are required to purchase Small-Scale Technology Certificates (STCs). These have a dollar value set by a government-regulated market. They are awarded to rooftop solar installations and redeemed, usually by the installer. The amount is then discounted off the cost of the install.
The cost of the STCs is passed on to electricity customers by retailers. Those without rooftop solar panels are therefore suffering higher prices for power.
Sims believes state governments, not electricity retailers, should be funding the rebate cost:
“[All] governments should consider replicating the Queensland Government’s decision to take the cost of these schemes onto their budget, rather than continue to force households that don’t have solar to cross-subsidise those that do,” he said.
There was no comment on the fact that Australia subsidises energy to a total of $29 billion per year, as reported in RenewEconomy.
“The IMF estimates that annual energy subsidies in Australia total $29 billion, representing 2.3 per cent of Australian GDP. On a per capita basis, Australian fossil fuel subsidies amount to $1,198 per person.”
Many of us in the solar industry feel more of this money could be allocated to renewable energy and power bill relief.
STC rebate decreasing each year
Despite this renewed call by the ACCC for scrapping the rebate, in October last year, Federal Energy Minister Angus Taylor said the SRES — a federal scheme — will remain in place.
The popular scheme is already gradually phasing out. Every year, the number of STCs each solar installation receives drops and will reach zero by 2030.
Meanwhile, reports say network infrastructure and advertising contribute far more to power bills than the rebate.
In fact, in its 2018 Retail Electricity Pricing Inquiry report, the ACCC cited overspending on distribution networks as a major cause of increased power bills.
Act sooner than later on solar installs
Because the STC rebate is reducing each year, it makes sense to take advantage of it sooner rather than later.
The current government incentive makes a big difference to the cost of installation.
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