If Abbott Succeeds in Slashing the Renewable Energy Target, What Will it Cost Aussie Homeowners and Business Owners Considering Solar?

Prime Minister Tony Abbott is making solar advocates (like me!) both nervous and angry.

His recent “signals” leave little doubt that, after years of progress, the Abbott government may be the first administration to slash Australia’s Renewable Energy Target (RET).

Abbott believes Australia should be an “affordable energy superpower”.

But traditional fossil fuel generators like Origin Energy and AGL are finding it harder and harder to stay “affordable” these days.

You may have noticed that in your recent electricity bill if you’re not a solar power owner.

So Abbott, unwilling to blame big energy, is looking around for someone to blame. And he’s found an easy, if mistaken, scapegoat in renewable energy…

“…We’ve got to accept though that in the changed circumstances of today the renewable energy target is causing pretty significant price pressure in the system and we ought to be an affordable energy superpower “

The truth, as most Australian (and German and Chinese) citizens know, is that the days of affordable fossil fuel energy is over and slashing the RET isn’t going to bring them back.

But energy politics aside, this raises a question for any homeowner or small business owner considering a solar power installation…

If Abbott Follows Through with his Anti-Renewables Crusade and Slashes the Renewable Energy Target How Much Could It Cost Me?

Around $3,000 maybe much more.

Here’s how…

To hit the renewable energy target, big energy producers like Origin and AGL have a couple of choices:

1. produce a certain amount of renewable energy

2. buy “certificates” from those who do.

When an average home owner installs a solar system, the government gives that home owner certificates he or she can sell to these big energy producers.

Of course, normally, the solar power installer will “buy” these certificates from the home owner (in the form of a discount off the price of the system) and then sell them to the big energy producers themselves.

But the bottom line is, that if the renewable energy target goes away, the market for the certificates goes away. If the market goes away completely (worst case) then the price of a 5kW solar system would likely increase by $3,000 or more.

Now the latest line from the government as of November 2014, is that they want to slash the RET by 40%. They have also said “household solar won’t be touched”. Whether you want to believe that ‘promise’ is your call! Based on previous promises, I’m still worried.

So no one knows what is going to happen to the RET or solar system prices, we can only guess based on government rhetoric.

TEST TEST TEST TEST TEST TEST

But if you are considering solar, it may be prudent to get it before any changes are made to the RET.

You can get 3 Quotes for solar with the current financial incentives here >>

For more information on solar power costs, incentives and plans, you might like…

This detailed description of how the RET and the STC incentive works

A Solar Power Cost Calculator that includes all the factors I can think of affecting a solar purchase.

Picture Credit http://www.flickr.com/photos/mystifyme07/ (background modified)