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The Hon Peter Garrett AM MP
Minister for the Environment, Heritage and the Arts

Transition from Solar Homes and Communities Plan to Solar Credits

Interview with Leon Byner, 5AA Adelaide
9 June 2009

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LEON BYNER: Now, I want to go back to a story we talked about a few moments ago, with regards to this solar panel scheme. And the fact is that we need to use energy that is not going to put CO2 into the atmosphere and, of course, solar panels fit that bill absolutely beautifully.

Now, the Federal Government have started a new scheme. But what I think has angered people in the solar industry is that they understood that as of the end of this month that the current rebate was going to finish, but in a very unceremonial way, they say this rebate has been taken from them virtually right now.

Let's find out why. Let's talk to the Climate Change Minister, Peter Garrett.

Peter, thanks for joining us today. What is the rationale of making this move three weeks before you said it was going to finish?

GARRETT: Leon, Environment Minister, and the rationale is very straightforward. We said in December that we would transition to Solar Credits. We now have a situation where we've provided four times as much support for our original $150 million commitment for solar panels. We've expended some $700 million and we now have a situation where there's a year's worth of solar panel installations out there, waiting to be undertaken.

So, it's the appropriate time for us to transition to solar credits.

LEON BYNER: Why - but, Peter, you've changed the date. You were going to do that at the end of the month. Why three weeks early?

GARRETT: Well, no, Leon, we were very clear. When Minister Wong and I made the announcement in December we said specifically that we would transition to solar credits. And we now have a situation where we have some 63,000 installations waiting to be undertaken. So, the solar panel rebate has fulfilled its objective. It's been provided with significant support from us. We've done in 18 months what was going to take eight years.

And what we've seen is an industry which has been going extremely strongly, but the cost of the solar panels themselves has been coming down. As a consequence of that, we now have about half of those applications for the rebates which are effectively getting free solar panels, that was never the intention of this rebate, either under the previous government or this government.

And what is our intention is to have a non means tested support that's available to everybody, whether it's families, farmers, communities, both for solar panels and for wind under solar credits, to provide the transition and support that the industry needs. Now, I've got to say, having spoken with the industry this morning, they have been well aware that this change was underway. They knew that we were getting applications at a record rate.

We've fulfilled that demand and the commitment has been considerable. There are more solar panels on roofs than there's ever been before. And that will continue, but it continues through the Solar Credits.

LEON BYNER: Okay. Can I ask you a question? One of the things that came up today - cause we spoke to one of the solar providers here in South Australia who does a lot of the business. He made the point - and I asked him specifically about the new process where you'll be able to get around $4000 in round terms back, but he said it's going to take two months. Now, surely you could expedite that a little bit more quickly.

GARRETT: Well, look, Leon, people will get at least $5000 for a one kilowatt system, $7750 for a 1.5 kilowatt system. And remember, that is on the basis of the current price of the renewable energy certificate. It's at about $50. If the price of the certificates go up, people will actually receive more under Solar Credits.

And I've got to say that I am really pleased with what we're doing here, because we're taking the rebate program, which has delivered a huge amount of rebates in terms of panels to people who were on the $100,000 level, we've completely fulfilled our commitment and gone way past it. Four times past it we've gone, in terms of the commitment. And yet now, it won't be means tested, it will be open to families, communities, businesses, farmers and others, and it will apply not only to solar but it will apply to wind as well.

Now, it is the case that because Solar Credits will be made available now, the legislation, the passage of the legislation, the regulations will need to take place before that amount can be remitted back to those who actually applied for and install the solar panels. But remember, the industry now has 12 months of work up its sleeve here.

We reckon there's about 1000 installations happening in Australia on a weekly basis. We've got 63,000 out there waiting to go. So, not only is the industry in a position of actually being able to fulfil those existing installations, but it's also got Solar Credits coming online as well.

LEON BYNER: Are you saying that the wait of a couple of months is only going to be until you get the legislation and the gazetting bedded down? Then it'll be much quicker?

GARRETT: It will be quicker once the gazetting has taken place. We aim to fulfil, as we do with the solar panel rebates, in fact with all the other programs that we run through the department, we aim to fulfil the payments, or the rebates that are required as quickly as we're able. And we've sped up that process significantly.

Listen - listen, to what I reckon is really interesting here. When we came into Government, we had this solar panel rebate running at about 30 applications a week, under the previous government, the Liberal/National Party Coalition. Last month we had 30,000 applications. The spike and the strong demand that has taken place for these solar panels is absolutely phenomenal, but we've met the demand.

In doing that, we're now fully reached the objectives of the program and the Solar Credits is aimed to provide a solid foundation for solar panel industry - we've also got solar schools, we've got the solar flagships investment out there.

LEON BYNER: Peter, there's an interesting question here - if the demand has gone up exponentially, then what is that going to mean for the funding? Cause you may not have predicted this when you funded it. So, is it likely that you better get in quick because the money may run out?

GARRETT: What we've done, and this is the important thing here, Leon, is we have provided the additional funding necessary for those applications under the solar panel rebate to be met, and they will. But from today onwards, people's capacity to put solar panels on their roofs, or wind power on their roofs, is unimpeded by a means test. And it happens through the renewable energy target.

Now, we have committed to bring renewable energy target legislation through the Parliament. You'll see a four-fold increase in renewable energy that will be provided under that legislation and these Solar Credits will be a part of that renewable energy target. So, the support will be there, it's guaranteed to be there and it's guaranteed to be there for the medium and long term.

LEON BYNER: So, irrespective of the demand, the funding will be there to get that four, five, $6000, depending on the size and capacity of the unit you're choosing?

GARRETT: That's right. Because the way in which the renewable energy target works, and the way in which the renewable energy certificates work, is that the amount of renewable power that you generate from a solar panel, whether it's a one kilowatt system or 1.5 kilowatt system, provides you with a renewable energy certificate, which is redeemed at a cost, the same way the solar hot water certificate works.

So, everybody that's putting solar on their roofs, right around Australia, generally speaking the installer, they sign over the renewable energy certificate to the installer, installer deducts the value of that renewable energy certainly from the price of the installation and people get the solar hot water system on their roof at that price.

The same thing will apply with solar panels and with wind turbines as well under solar credits. It will be a very solid, a well supported system. And because it operates through the renewable energy target, it's not reliant on additional appropriations from the Budget.

LEON BYNER: All right. Peter Garrett, thank you very much indeed.

Environment Minister on 1395, Adelaide's 5AA, just explaining the Federal Government's view as to why, according to some in the industry, they announced summarily that this scheme three weeks early would shut. The Government says, well, hang on a minute, you knew it was going to finish, we decided to end it now and we've had exponential demand on the system.

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