NEWSFLASH: ACCC Wants Solar Subsidy Axed

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Solar supporters are in shock after an ACCC report published this morning recommended Australia’s small-scale renewable energy scheme should be wound down and abolished by 2021.

The Australian Competition and Consumer Commission released its final report for Australia’s electricity supply and prices inquiry a couple of hours ago.

Calling it a “blueprint to reduce electricity prices”, it makes 56 recommendations detailing ways to fix the National Electricity Market.

“The National Electricity Market is largely broken and needs to be reset,” said ACCC Chair Rod Sims..

The report states residential consumers have been hit with a real increase of 35 per cent in their electricity bills and a price increase of around 56 per cent in real terms over the period from 2007–08 to 2017–18. However, its own figures show green schemes have been a bit player. The following figures show each components’ contribution to the total increase between 2007–08 and 2017–18:

• Network – 35%
• Wholesale electricity – 22%
• Environmental – 20%
• Retail costs – 7%
• Retail margins – 16%

As well as helping to clean up Australia’s energy mix, the SRES has been a major employer in Australia. Additionally, the SRES is already being phased out. Current legislation means that the “solar rebate” started to reduce by one fifteenth every year from January 2017, and it will drop to zero in 2032.

The Smart Energy Council has strongly criticised the recommendation to prematurely axe the SRES.

“The one thing householders can do to slash their power bills is to install solar,” said Chief Executive John Grimes. “The Federal Government needs to immediately rule out abolishing the SRES. Uncertainty around the SRES will cause unnecessary panic and confusion for consumers and the industry.”

Solar Citizens says the report “missed the mark”.

“We need programs to make it easier for more households and business to go solar rather than recommendations like this one which will make it harder,” said Senior Campaigner Shani Tager.

Among its other recommendations relating to solar, the ACCC suggests any costs remaining associated with states’ legacy premium solar tariff schemes should be absorbed through state government budgets rather than recovered through charges to electricity customers. The ACCC notes Queensland has taken this route.

While whether the ACCC’s recommendation to wind down and end the SRES in 2021 is implemented remains to be seen, the Commission may have just triggered the next big rush on small commercial and home solar power systems – as Australians tend to mobilise whenever solar subsidies appear to be seriously threatened.

The report summary of “Restoring electricity affordability and Australia’s competitive advantage” can be downloaded here (PDF).

UPDATE: Read Ronald’s take on the situation.