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

Transition from Solar Homes and Communities Plan to Solar Credits

Interview with Michael Smith, Drive Show, 4BC Brisbance
9 June 2009

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MICHAEL SMITH The Minister for the Environment, Peter Garrett, is on the phone. Minister, g'day.

GARRETT: G'day, Mike.

MICHAEL SMITH You're copping a bit of flack on this. Did you expect that?

GARRETT: I thought there would be a little bit, Mike, because we copped a little bit, you may recall, when we introduced the means test for the rebate.


GARRETT: And people said that the solar industry was going to go to the wall and Greg Hunt said that it was the end of the solar industry as we know it.

Of course, the very opposite happened and I've got to say that we've been very clear, both with the industry and generally, that we would move to a transition and given that we've now got a year's worth of installations in the pipeline and having monitored the way in which the rebates have continued to be applied at record levels, it's entirely the right time for the Government to make this decision because we're providing the transition to solar credits, which won't be means tested, and will apply to families or communities, businesses as well, to enable them to get into solar panels in the future.

MICHAEL SMITH: Why have you not honoured your promise to have it available until the end of the month?

GARRETT: We didn't promise that we would have it available until the end of the month. In the release that was done with Minister Wong and the Treasurer and I, we said that we would continue to meet demand in order to ensure a smooth transition, and we said that we wanted to have the legislation in place mid-2009. But there was no deadline in that release and there's been no deadline in the correspondence that I've had with everybody who's written to me about this.

And I think - you know, look, I've spoken to some members of the industry this morning, Mike, and they have said to me that it's clearly been the case that the Government was monitoring the uptake of the rebates. They were well aware of the fact that at some point the Government would make a decision to transition. Some people thought it would happen around the Budget. In fact, we saw a big spike in applications for the rebate around Budget time. But given that we've now spent $700 million over this period of time when we budgeted for $150 million over five years, and given that we've got about 63,000 installations that still haven't been effected in the system, this is exactly the right time for us to make this announcement and provide the transition that the industry, I think, you know…

MICHAEL SMITH: Yeah, but you guys also say that this climate change issue is the single most important pressing issue. Surely to God this is a way to fix that up too.

GARRETT: Well, look on that, I'm a big supporter of solar, but when we look at the kind of impact that a one kilowatt system has on reducing greenhouse gas emissions, it does its bit, but I think we're getting a great deal more value for money in terms of the taxpayers' investment for things like the ceiling insulation and the home energy efficiency program that we've got.

But the important point about this one is really straightforward, mate, and that's this: we've provided a high level of support for the rebate, and what we've seen happen effectively, which is why we've got a lot of players in the market now, is that as some costs have come down on the one kilowatt system, people have effectively been able to apply for free solar panels.

Now it was not the intention of the rebate under the previous government, where it was running at about 30 a week, nor of this government, that that be the right growth path for this industry.

The right growth path for this industry is to provide some opportunity through the rebates, which we've done significantly. More rebates have gone out, more solar panels on roofs, than ever before; 63,000 of them sitting there. They do about a thousand a week, so they've got about a year's worth of work now, but as well as that, from tomorrow, people have the opportunity for solar credits, which are not means tested, and which will provide opportunities especially with the one and a half kilowatt system…

MICHAEL SMITH: It's a lesser rebate, though.

Okay, so practical questions, Minister. If somebody at home has got an appointment booked for it in the next few weeks, the next three weeks, up to 30 June, with a solar company, but no application form in, will they still be eligible for the existing rebate?

GARRETT: No, they won't. The applications will close as of midnight tonight, but as of tomorrow they will be, if they wish to make an application through an installer, available to take up the five times multiplier for the solar credits. So the solar credits will be made available immediately the solar rebate concludes, but the solar rebate concludes midnight tonight.

MICHAEL SMITH: Why have you given no notice on this?

GARRETT: We've always said that we would provide the opportunity for transition and in providing opportunity for transition, given that rebate applications were running at such high levels, it was clear that the rebate had done the job that it was required to. I mean I think if people go back a couple of steps…

MICHAEL SMITH: So but - but why no notice? Why not give people even a week's notice?

GARRETT: Well, our view is that the rebate has done its job. The expenditure of some 700…

MICHAEL SMITH: You don't want to help anyone else out; that's what you're saying?

GARRETT: Well, no, it's not that. We're providing the opportunity for people to be helped out. In fact, more than that, Mike, because under the solar credits there'll be no means testing. Under solar credits, they'll have&8230;

MICHAEL SMTIH: Yeah, but it's for a lesser amount. Yeah, all right, let me ask you about, the Opposition says you'll get $4000 less than what people currently get; is that true?

GARRETT: Well, it depends on the climate zone. I think we're speaking in Queensland. In the climate zone for a one kilowatt system, you'll get approximately $5100. For a 1.5k system you'll get approximately $7700, but as well as that, that's based on the price of the renewable energy certificate. That renewable energy certificate's price at the moment is around about a $50 price.

The modelling says that once we get the renewable energy target in place, which is four times bigger than what it was before, we're likely to see increases in the price of the renewable energy certificate and we have the possibility of seeing a significantly increased amount of money that's available for people under the rest.

MICHAEL SMITH: Is that because normal coal-powered electricity will become heaps more expensive?

GARRETT: That's because the renewable energy certificate itself has a variable price, and over time where you're producing a lot of renewable energy the price of the certificate can go up.

MICHAEL SMITH: How much will coal-powered normal electricity go up; what do you expect?

GARRETT: Well, I don't provide conjecture on where the prices are going to go on that one way or another. What I can say is what solar credits does is provides people with the opportunity to take between a $5000 and a $7500 support from the Government for renewable energy, for wind energy and - and even if they've got that opportunity, maybe in north Queensland for hydro, and it does it over a number of years and then it starts to scale down as the renewable technologies become more cost efficient.

What we had here was a rebate which we fully supported and then we four times increased the amount that we committed to over five years. We've done that in 18 months. We've done eight months worth - we've done eight years worth of rebates effectively in 18 months…

MICHAEL SMITH: So the bottom line is if you haven't got your application in by this arvo, stiff, you're not going to get it.

GARRETT: Well, that's correct. If you haven't got your application in by this afternoon, but you will be capable of - of applying for solar credits, and I invite people to do that because I think they'll find that that level of assistance is tremendous for them and they can do it for both solar and for wind.

MICHAEL SMITH: Minister Peter Garrett, thanks for speaking with me.

GARRETT: Thanks Mike.


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