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Australia Federal Government criticized for $600M solar energy scheme

Government initiatives in support of solar energy in Australia are being met with some criticism. Will the Australia small-scale solar scheme prove...

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|Nov 4|magazine4 min read


Government initiatives in support of solar energy in Australia are being met with some criticism. Will the Australia small-scale solar scheme prove to be too costly? Only time will actually tell.

Due to begin on January 1, 2011, the small-scale renewable energy scheme, implemented by Australia’s federal government, promises to distribute $40 in small-scale technology certificates for residents who choose to install photovoltaic cells or solar hot water systems. This may seem like a great idea at first, particularly for Australians who intend to utilize solar energy in the near future. However, while the solar energy initiative will save money for residents and businesses, it could be quite costly for local electric utilities—some feel even as much as $600 million.

It is mandatory under the scheme that electric retailers purchase back any certificate that is issued. According to reports, EnergyAustralia warms that the initiative could cost $600 million in power bills due to the aggressive uptake of solar energy. Original estimates indicated that 11 million certificates would be issued next year, however, EnergyAustralia along with other industry businesses, think 30 million are more likely to be expected.

Recently, the New South Wales Government revised the solar bonus scheme. For new customers who join in, the tariff rate was reduced from 60 cents to 20 cents. Additionally, the scheme will be capped at 200 megawatts due to the significant drop in PV system purchase costs over the last year, and also accounts for the support supplied through the Commonwealth Renewable Energy Target scheme.

The renewable energy scheme came as a result of the ramped-up Renewable Energy Target by the federal government, which targets having 20 percent of power generated via renewable resources by the year 2020.