Kevin Rudd Hacks the Head off the Home Solar Industry

May 21st, 2008 · No Comments · Blog

As a post election party hit its straps last year I watched as a solar installer I know took a campaign poster of then-Prime Minister Howard and burnt it with glee.The incoming Rudd Government was making the kinds of comforting noises that could have put anyone worried about climate change to sleep. Labor instantly ratified the Kyoto Protocol, they talked the talk and they walked the walk.

And then last week the slumber ended. Solar installers rubbed their eyes on Wednesday morning and choked on their muesli at news of a waking-nightmare budget announcement. The Federal Government announced the $8,000 rebate for installing solar power systems was to be means tested with a cut-off at $100,000.

In one fell swoop a fragile but hard-won industry had been dealt a blunt blow. It was a mysterious policy about-face.

But make no mistake about it: last week Kevin Rudd, Wayne Swan and Peter Garrett took the head off the home solar industry as brutally as an Al Queda terrorist.

If you look hard at it, from a financial perspective, it is impossible for anyone to justify going stand-alone solar if they live in an urban environment.

Installing a grid-feed system which uses panels to pump energy into the electricity network is the only vaguely economical option for a city-dweller and that is exactly what solar installers say has been hardest hit by the budget decision.

No choice is only about money but there is a limit to how economically stupid a consumer can be.

A stand alone system, which allows a house to be off the grid, typically costs around $20,000 before a rebate. A grid feeding system is only marginally less.

For too long the subsidies, the support and the propaganda have gone coal’s way and our entire society is geared towards burning fossil fuels in order to pour waterfalls of power into our homes.

When we installed our solar system down here on the NSW south coast we earned a rebate of $4,000. The reason solar, softened by a rebate, was an acceptable burden for us is that we live on a rural property. Even though a powerline runs within metres of our backdoor it was going to cost about $15,000 to hook up to the grid.

Our rebate brought the price down to $14,000 for a superb little set up that has now fuelled our entire family for three years and will provide guilt-free power for decades to come.

Last year John Howard increased that rebate to $8,000 and suddenly, dramatically, the goalposts shifted in solar’s favour.

In January 2000 the number of watts installed nationally was close to zero. Until the middle of 2007 it hovered between 100,000 and 200,000 watts installed nationally each month – an average household installation produces a kilowatt of power.

Then in July the figure spiked at over 400,000 watts and continued to climb reaching 776,000 watts in December 2007.

Solar installers estimate that 90 per cent of their grid business will now be cancelled.

They are baffled and angry. Their e-mail networks are choked with despairing exchanges on the blindsiding their industry has just copped.

Solar power, installers fear, will not be available, fullstop, to anyone except the most ideological of sustainable energy enthusiasts.

And that is a very sad outcome because there is a lot more to living in a solar-powered house than economics. It is also about instilling in children that there is a more sustainable way of living and generating power. It is about taking some responsibility for a family’s own resources.

But if you are in a house where the combined income is $100,001, it is unlikely that solar will now be a realistic choice pitted against mortgages, fuel and groceries.

A means test is not a bad thing. It would be wrong for the community to cover the cost of millionaires going solar. But the $100,000 mark is where the rump of the solar market exists and where the incentive is most effective.

The solar dream of the average householder is now a thing of the Howard era – heading west into an historical, political sunset.

Who would have thought such a result was possible the night my installer friend took a match to Howard’s picture?

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