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The Hon Peter Garrett AM MP
Minister for the Environment, Heritage and the Arts

Solar credits

Mark Colvin interview, ABC PM
17 December 2008

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MARK COLVIN: The Federal Government has scrapped the solar panel means test it introduced just seven months ago.

Under the test households which earned less than $100,000 a year were eligible for an $8,000 rebate for installing a solar array to generate electricity.

Green groups and the solar industry criticised the means test.

They argued that it would discourage the take-up of solar panels because it excluded the wealthier households.

Now the Government is introducing a new scheme as part of new legislation to get 20 per cent of all electricity from renewable sources.

Households and businesses will be credited with five times the value of the energy they produce from solar panels up to a maximum of $7,500.

The old rebate and the means test that went with it will be gone by July next year.

But the Minister for Environment, Peter Garrett, told David Mark the Government hadn't been forced to dump an unpopular piece of legislation.

PETER GARRETT: We haven't abandoned it at all David, what we've done is provided the transition to a certain future part for the solar industry as the solar industry itself has been calling for and that's come on the back of extensive stakeholder negotiations and consultations that I've been doing right around Australia.

And the fact is that by providing for solar credits under the renewable energy target will provide certainty on a legislative basis for the solar industry. It means that they will have a strong and certain pathway for future growth.

And it also means that the opportunities for taking up renewables will go right through the community. It willinclude not only households but community groups and businesses as well.

DAVID MARK: You say you haven't abandoned the rebate but aren't you phasing that out from July next year? Isn't that because you've faced seven months of intense criticism about thedecision to means test that rebate?

PETER GARRETT: Again, that's absolutely not the case. What we've seen is a record level of applications for solar panels under the existing rebate. The Opposition made much of the fact that the solar industry had gone into freefall when in fact applications were heading to records highs.

And what was very clear was that not only have we delivered more solar panels on more roofs than at any time in the past by any Government but additionally, that the solar industry was keen to have long-term certainty for its future so it could begin to develop an investment and building of industry path which was sustainable into the future.

DAVID MARK: So the rebate and the means test will be phased out after the 1st of July next year in favour of the new system. Is that correct?

PETER GARRETT: That's correct. From July the 1st, we will provide upfront assistance in the form of solar credits for new small-scale solar, wind and hydro renewables.

DAVID MARK: Can you explain briefly how the new system will work.

PETER GARRETT: The new system provides renewable energy certificates at a rate of five times the existing rate and it will operate in that way for a number of years and then slowly the number of renewable energy certificates will be reduced over time until the new small-scale solar renewables operate on the same basis as other renewable energy would under the renewable energy target.

DAVID MARK: You're paying a credit of up to $7,500. Under the old scheme households could earn $8,000 plus an extra $1,500 renewable energy certificate, that $9,500 so why are you reducing the amount available to households by $2,000?

PETER GARRETT: Well I think the fact is that the provision of the support by way of a renewable energy solar credit means that over time, not only will the industry have a degree of certainty which isn't reliant on a rebate or a budget rebate but additionally will enable them to plan for the long-term and for the future.

And the fact of the matter is under this Government, we made a commitment when we were in opposition to double the number of panels, of solar panels on the rooftops of Australian homes to some 60,000 panels from 30,000. We will actually within 18 months have achieved the eight year goal. Our expectation is that in time not only will costs come down but additionally the delivery of these new small-scale solar systems will both be economical and won't be means tested so it will apply to Australians regardless of their income.

DAVID MARK: The Opposition claims that some people in some parts of Australia will earn less than the maximum. For instance, people in Melbourne will earn up to $5,000 less than the maximum. Is that true?

PETER GARRETT: Well, that's definitely not the case. The fact is the previous government put in place the arrangements for the renewable energy certificates. It's based on the amount of solar power that you generate and therefore the environmental benefit that you create and that is how the energy renewable certificates are calculated.

And we believe that this provides significant certainty for the industry and in addition with the other measures that are sitting there including things like feed-in tariffs in other states will make the installation of these small new scale renewable technologies imminently affordable.

MARK COLVIN: The Federal Environment Minister Peter Garrett, with David Mark.


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