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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 Kathy Bedford, ABC Statewide Drive, Victoria
9 June 2009

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KATHY BEDFORD: We're talking about - but look, you couldn't have helped but notice the large number of ads, even billboards I've seen around town, encouraging households to take up the solar panel rebate before it's too late. According to the ads, you have until the end of this month, so three weeks to get your application in.

Well, not so. Today totally out of the blue the Federal Government has announced that applications for the solar rebate close at midnight tonight.

Peter Garrett is the Minister for the Environment.

Good afternoon, Minister.


KATHY BEDFORD: Why have you announced this so suddenly?

PETER GARRETT: It's not out of the blue, Kathy. When Penny Wong and I announced the solar credit proposal in December last year, we said that we wanted a transition to solar credits and we pointed out that that is something that would happen.

And it's something that the industry's been aware of as well, and I've spoken to representatives from the industry this morning and it's very clear that they were well aware of the fact that the Government would consider what period of time the rebate should run to and what transition would go to solar credits. And the fact is that we've significantly expanded the support for the rebates.

We had $150 million committed in the Budget. We've spent around $700 million on these rebates. The objectives of the rebate have been met.

We want to make sure that we now have a solid footing for solar and for wind, non-means tested for families, for communities and for businesses, and that's the intention of the solar credits. It will be applicable and available from tomorrow, and as a consequence of that we've made this decision today.

KATHY BEDFORD: Mr Garrett, the December 2000 and press release when you announced these changes, details changes saying from next financial year. Now, that's 1 July unless the Federal Government's changed the financial calendar.

PETER GARRETT: Well, what we've said today is that...

KATHY BEDFORD: In December you said from the next financial year.


KATHY BEDFORD: Why change it - announce it from midnight tonight?

PETER GARRETT: What - what we're saying today is that the proposal for solar credits and the capacity to apply for solar credits will take place immediately upon the decision that the Government has taken in relation to the solar power rebate. And we've also said that it was the Government's intention to fulfil its election commitment, Kathy, and we've done that...

KATHY BEDFORD: But the commitment...

PETER GARRETT: ...but not only have we done that, but we've done it in a way which has seen us increase the number of solar panels on people's roofs to an all time high, spent $700 million to fulfil the demand that was there for the solar panel rebates and provide clear certainty for the solar industry in the future through solar credits. And I have to say that we have some 63,000 unfulfilled installations of solar powers currently under way.

So the ads that you were referring to and the strong demand for solar panel rebates has come about as a consequence firstly of the lower cost of these rebates, which means that in some instances about half of the applications there's the capacity for people to effectively have free solar panels.

And the second thing is that it was with a sure knowledge that the Government had always said that there would be a transition to solar credits, that it would make clear what that transition would be, that that announcement would be subsequently made from December, and again the industry believed that when we came through to the recent budget period that there'd be an announcement made then.

So people in the industry have had a very high level of awareness that the Government was monitoring closely the level of applications. We had some 30,000 applications over the last month. This program met its objectives. It's the Government's clear decision that we want to provide solar credits for people to enable them to get solar panels on the roof, and that's what we've decided to do.

KATHY BEDFORD: The merit of the new system is not the issue today. That's already been debated. What we're talking about here is the fact that you announced the system would changeover at the, in the new financial year, 9 July - 9 June is not the new financial year. Why have you brought this forward 20 days?

PETER GARRETT: Well, we've - we're providing for a, a changeover that takes place because the acquittal of the solar panel rebate has completely delivered in terms of the objectives that were set for it, and with an expenditure that's some four times greater than the budget appropriation ...

KATHY BEDFORD: So you've...

PETER GARRETT: So the $150 million that we set aside to support this program is now at $700 million.

KATHY BEDFORD: So you've run out of money; is that the simple answer?

PETER GARRETT: Well, no, and - well...


PETER GARRETT: The fact of the matter is that we've provided significant additional support for it, but Kathy, the reason is that we now have 63,000 uninstalled solar panel successful applications in the system, and it is now time for those solar panel installations, some 60,000 or so, it's a year's worth of effective installations, that are there for the industry. But at the same time as that years worth of installations been there, there's now the opportunity for families, for communities and for businesses to take advantage of the renewable energy target for solar credits.

And in that sense I think it's really important for people to know that it's not a means tested opportunity for application, it applies to households, it applies to community organisations and it applies to businesses and it's not confined to solar either; it also applies to wind as well.

So that way, the strong period of activity that we've seen over the last year, at a time when you may recall when we introduced the means test for the solar power rebate, everybody said that the industry was, you know, Mr Hunt, the Opposition member, saying, you know, the industry was going to die and, you know, applications would go to the floor.

Applications have been at a record high for a considerable period of time. They have fulfilled the objective. It's now time for those 63,000 installations out there, a year's worth of installations to be done, whilst at the same time solar credits is brought on.

KATHY BEDFORD: Peter Garrett, are you prepared to just acknowledge, though, that you have pulled the rug from under the renewable energy industry, or for another analogy you've shifted the goalposts midway?

PETER GARRETT: Absolutely not.

KATHY BEDFORD: Your own press release said this rebate would end with the new financial year. We're not there yet.

PETER GARRETT: Kathy, I'm - I'm absolutely not prepared to accept that at all, and I'll tell you why: because we made it perfectly clear, and we've made it clear subsequently, that there would be a transition for solar credits. We've also made it perfectly clear that the demand for solar panels would be met until such time as we...

KATHY BEDFORD: I'm sorry, Minister, but your own press release talks about the changes happening from the next financial year. That's your own - on your own letterhead.

PETER GARRETT: Well, what I would say to you is this, and that is that by making the call today and making the decision today, which we have made, we provide for that transition to happen at this specific point in time.

KATHY BEDFORD: From midnight tonight. Let's be clear, you're telling people if applications aren't in for midnight tonight, they can't be addressed under the old system of rebates?

PETER GARRETT: The old system of rebates will close as of midnight tonight, and from tomorrow onward solar credits will be available for people who wish to have solar panels or wind turbines generating energy on their roofs, whether they're families, whether they're communities or whether they're businesses, and it won't be means tested. And that's because we now have a significant amount of uninstalled solar panel rebate applications in the system.

And I think everybody would recognise that it's not only economically appropriate for those particular installations now to take place over the next year, we think that the installations run at about 1000 installations a week with some 63,000 out there unfulfilled. That's over a year's worth of insulation, whilst at the same time immediately we provide the opportunity for solar credits to come in to enable that industry to transition.

So not only does it have a year's worth of work to fulfil over this period of time, not only has it had four times the level of the commitment in the Budget for solar panel rebates, but it's also been given a very clear path for solar credits to enable the industry to continue on its growth path in the future.

KATHY BEDFORD: Peter Garrett, you've cost our community solar support group significantly. They're the ones to a large part who funded the big ad campaigns, and those ads clearly - we've just checked back in today's papers - promote the end of June, 30 June as the cutoff date. Did they have any advice that you were introducing this from midnight tonight?

PETER GARRETT: We have always said that we would move to a transition to solar credits, and the industry itself...

KATHY BEDFORD: From the next financial year.

PETER GARRETT: ...and the industry has been very well aware of the fact that the Government could determine, as it has determined, that it wanted to move to a transition to solar credits and it would make an announcement on that basis. Now that's been well understood by the industry. I've spoken to the industry this morning. This doesn't come out of the blue. It's not a surprise.

But more than that, this is a recognition of the success of - a very successful program, there's no question about it. But the purpose of the Government providing the opportunity for the solar industry to continue to grow isn't so that it merely provides the opportunity by installing cheaper solar powered systems and therefore effectively enabling people to install these solar panels for free. The purpose of the rebate is to assist and provide support for people to get solar panels on their roof and to provide a sure footing for the industry.

Now the industry's sure footing under this solar panel rebate is very clear. Not only have we had record numbers of applications, not only is the industry barrelling along, but they've got a year's worth of installations to do and they also have solar credits from tomorrow in place so that they can continue that growth and do it in a way with the community that isn't means tested right around Australia.

KATHY BEDFORD: Well, for the many who are now panicking, they want to know, we're getting many calls in, does it have to be post-marked before midnight tonight? Do these applications have to get there by midnight tonight?

PETER GARRETT: If the application is post-marked by midnight tonight, my understanding is it's a valid application.

KATHY BEDFORD: And you haven't even passed the relevant legislation yet. Wouldn't that suggest a bit of prematurity on this change?

PETER GARRETT: Oh look, I don't think so, Kathy. I mean, let - let's have a reasonable discussion about this to the extent that this is an industry which has gone from under the life of the previous government an installation of panels running at about 30 solar panels a week under this rebate, to 30,000 in the last month under this government, and we've increased the support for it four times.

And we're also providing solar credits, which will give the opportunities to people around Australia, depending on which zone they're in, for a 1.5 kilowatt system to have a capacity of over $7000 to $7500, that's on the current REC price to install a system. And we've said that the applications will be capable of being applied from tomorrow.

We want the renewable energy target legislation to pass through the House as soon as is practicable. It's high priority legislation for us, and as a matter of consequence the regulations will enable the backdating for people's applications so that they can be taken up from the point in time when they applied.

Now I think that provides significant consistency in terms of what we've delivered up to now. Substantial resources of taxpayers' money have gone to keeping this industry and getting it belting along. But we want to do it in a way which provides the long-term growth paths of the industry, and that clearly in the future is not going to be with a rebate of this kind, means tested as it was, which was effectively providing in some instances free solar panels for people, was subject to very, very high levels of applications when the initial commitment by this government was $150 million and we've already spent $700 million.

KATHY BEDFORD: Peter Garrett, I didn't really want to get into the merits of the new system right here and now because the real issue is the changing of the date, but just quickly, since it's - the new system comes in after midnight tonight, is the market actually established for consumers to sell these credits?

PETER GARRETT: I don't think there's any doubt that it is, Kathy. It works the same way as it does when people buy a solar hot water system, and there's a - there's a REC that attaches to every solar hot water system. That's been a system which has been under way for a number of years. It's a system which is proven and tried, and we think this is going to provide a continual firm foundation for renewable industries right around Australia.

And because it's not means tested and because it also applies to the generation of wind and it even allows for hydro generation, although that will probably be in a minority, perhaps in north Queensland, it means that we'll see ongoing consistent support for renewable industries but particularly solar, but in a way which is not tied or linked to the rebate as it has been in the past.

The rebate has done its job, it's provided significant commercial activity for the solar industry. They've got a year's worth of installations waiting, and a solar credit that people can apply for tomorrow.

KATHY BEDFORD: Okay, thank you for joining us today.


KATHY BEDFORD: Peter Garrett is the Minister for the Environment.


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