Big Solar in Box Seat After Carbon Tax Announcement

This week’s big ticket news item for the solar industry and its consumers was the fillip given to the sector by the federal government’s long-awaited carbon tax announcement.

While there is some debate over whether or not the carbon price announced last weekend will go far enough to achieve its primary purpose (i.e. significantly decrease the level of carbon emissions in Australia) there appears to be little doubt that the renewable energy incentives attached to the legislation will go a long way towards rejuvenating the renewables sector, particularly solar energy.

“Solar on steroids” was how John Grimes, chief executive of the AustralianSolarEnergySociety (AuSES) described the Clean Energy Future announcement, adding that the solar industry was the real winner to emerge from the package. He focused on the earmarking of $10 billion, half of which will be made available for the renewable sector from a new investment bank, hailing it as a major step forward.

“The $10 billion Clean Energy Finance Corporation (CEFC) – half of which is quarantined for renewable energy – will provide the financial settings that Big Solar projects need to get off the ground,” said Mr Grimes in a July 10 media release.

“AuSES has consistently argued for the establishment of an independent green investment bank, and we are very pleased that this is coming to fruition,” he added.

Of course the government, sensing the importance of getting any deal on renewable energy absolutely right, was out of the blocks in a hurry to promote the package.

Senator Chris Evans spruiked the future of Australian solar energy under the new carbon regime.

“We’ve got enormous potential in solar and wind and wave which has been largely untapped and the impact of the carbon price will make them more competitive,” he said to reporters.

“Companies will be looking for alternative energy and so we’ll see the investment that hasn’t occurred yet that we need to see to change our energy sources.”

So back slaps all round from the solar energy industry? Well yes, particularly if the planned CEFC does provide the impetus the solar industry needs in areas such as research and development. While details have yet to be ironed out regarding loan guarantees to be made available by the loan investment bank, it appears Australia’s “Big Solar” is delighted with the outcome if the reaction from innovative green technology company Greenearth is anything to go by.

Mark Miller, company managing director, was clearly in an upbeat mood in a ProactiveInvestors report of July 12.

“Sunday’s announcement by the Commonwealth clearly supports our strategic diversification into the broader renewable energy market (Greenearth Solar Energy) and in particular the burgeoning energy efficiency sector”, he said.

Will the carbon price package, and in particular its incentives for renewable energy, provide that certainty so desperately needed for solar investors? Is this the fillip that will turbo charge solar power as a viable alternative? Or another false dawn? I’d love to hear your views.