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Interview with David Bevan and Matthew Abraham, 891 ABC Adelaide Mornings
10 June 2009
DAVID BEVAN: Now, yesterday during the soapbox we were - as just - as news of this decision was coming through, we spoke to Adrian Ferraretto and he's involved in the solar industry, and he said that the system was $9000 for a one kilowatt system. Under the new system, you get $4500 for a one kilowatt system, so it's virtually halved.
Now here's Peter Garrett. Later on in the interview we start to nut down into how much you can get under this new system. He says that the new system is actually more generous than what you heard yesterday, but look, here's Peter Garrett. Have a good listen to this and then give us a call. Let us know what you think - 1300 222 891.
MATTHEW ABRAHAM: Peter Garrett, welcome to the program.
PETER GARRETT: Thank you, guys.
MATTHEW ABRAHAM: Why have you cut off the solar rebate before the end of the month? There was quite big advertising campaign by solar companies saying you had till June 30 to get it in and a release came out yesterday saying it's all over red rover.
PETER GARRETT: Well, we've been monitoring the uptake of rebates closely and two things have become clear to the Government. The first is that the industry's accrued a significant amount of work in the pipeline, some 60,000 installations and about 30,000 in the last month alone, and that's about a year's worth of work still to be done. And also the price of the solar panels has come down as well with about half of the current applications for installations that are effectively free to householders.
So given that we've already not only expended $150 million, which was allocated in the Budget, but an additional, up to $700 million we ended up with a figure in terms of what we've spent on the rebates. And we'd always said we would transition to solar credits, now was the appropriate time for us to conclude that rebate program and get that transition underway.
MATTHEW ABRAHAM: Can we just clarify this though? Was it due to end on June 30?
PETER GARRETT: We'd always said that we wanted to transform the industry by going through to solar credits, and that solar credits would happen as a consequence of the RET legislation and our expectation was that the RET legislation would be introduced into the parliament in mid this year. And in our communications with the industry we've made it clear that we were keen on making sure that that transition happened in a way which was effective, that we'd meet the demand for the rebate but that we would have a transition to solar credits and that we'd advise them when that had happened.
DAVID BEVAN: Where, therefore, did they get the impression that it was going to end on June 30 before they started spending hundreds of thousands of dollars in advertising telling consumers that they had until June 30 to get their application in or they'd miss out?
PETER GARRETT: Well I think that the industry's been ramping up its campaign for the rebates for a period of time previous to this. We saw intense activity around the Budget. They may have thought around budget time that the Government would make a decision about the rebates and so we saw a significant spike in relation to applications for rebates at that time.
And it is the case that the expectation in terms of introduction of the RET was something which was directed by the Government as mid June, and on that basis the industry's gone out with a very aggressive advertising campaign and we've seen record levels of applications for the rebates take place as a consequence of that.
We've had, I think, about 30,000 applications in the last month, but I notice this morning that when the Clean Energy Council and others were asked for comment on this, they did make the point that it wasn't their expectation that the rebate would continue indefinitely, and it also from...
MATTHEW ABRAHAM: No it wasn't. It wasn't indefinitely. It was till June 30.
PETER GARRETT: Well, the Government's always said that we would monitor closely and meet demand and we also said that in doing that we would secure a smooth transition to solar credits...
MATTHEW ABRAHAM: But, Minister...
PETER GARRETT: ...Now, we've got some 60,000 installations in the pipeline and we're committed to funding to cover every one of those eligible applications, we believe that the appropriate time to conclude the rebate program and to transition to solar credits was with the release of the renewable energy target legislation and that's what we've done.
MATTHEW ABRAHAM: But Minister, did you or your department tell the industry that they would have until the end of the month?
PETER GARRETT: Well, the communications with the industry have been to work in the transition to solar credits, and in doing that, in my correspondence and the letters that I've been sending back to people, I haven't been specific about a deadline figure. We do have information out there which says that we want to transition to solar credits in a way which is an even transition. And it is the case that the industry has a view that it was going to go through until the end of this month, but I have to say...
MATTHEW ABRAHAM: Well, where did they get that view from? If - are you saying that nowhere, at no time did you or your department tell the industry that the transition would begin from June 30?
PETER GARRETT: Well, what we have...
MATTHEW ABRAHAM: And - well you don't appear to be answering that question because it's I think the second or third time I've asked it.
So you either did tell them, or you didn't tell them. It's a - and then we can get on to the rest of the discussion, but just to clarify that point for our listeners who occasionally get frustrated with ministers who may not - who they may feel aren't answering the question directly, can we just put it to you? Did you or anyone in your department tell the industry that this scheme would end or transition from June 30?
PETER GARRETT: We didn't say that it would end on June 30 and we did say that we'd work with the industry to transition new arrangements and those new arrangements were contemplated as beginning on 1 July of this year. But the point about those new arrangements is we've simply brought them forward to June 10th, and there's never been a deadline that has been communicated, by the Government, to the industry for this solar rebate program, and I have to say...
MATTHEW ABRAHAM: Or except that the new system would start from 1 July. The thing is you haven't even brought in that legislation.
You're talking about transition. As I understand it, all we're talking about here is that you're bringing legislation in. It hasn't been adopted by parliament yet.
PETER GARRETT: Look there's renewable energy target legislation. It's the expectation to give this legislation high priority. Our expectation is that the legislation will pass through the parliament.
There's been firm indications from the minor parties and the Opposition that there will be support for renewable energy target and at the same time, we will provide the appropriate regulations which enable people to be able to take that transition to solar credits, which we said we would effect, happening from today.
And in doing that, provide people with the opportunity to apply for both solar panels, but also for wind power and to do it in a way which isn't means tested.
Now, the Government has decided that the transition should take place immediately because the industry has about 12 months work in the pipeline and the rebate, whilst fully committed, has now expensed up to $700 million or a little more.
We've got significant commitments to the solar industry happening through solar schools and solar flagships, and now with solar credits, our expectation is that the industry can operate on a sustainable footing into the future.
MATTHEW ABRAHAM: Minister, this is not the first time we've spoken to you about support from the Government for solar power and confusion over subsidies and when they start and when they finish, and ending subsidies, that sort of thing. This isn't the first time we've had this discussion. Have you got your head around this portfolio, or is there - sometimes you're surprised by how successful the scheme is?
PETER GARRETT: Oh look, I've very much got my head around this portfolio and one of the things that's been really interesting to me is to see the pace in which we've had the uptake of the solar panel rebates when, at the time of - I think, what you're referring to in your question to me, there was some criticism for the Government and the decision that we took and that I took to actually have a means test for the solar panel rebate.
Now, at the time people were very critical of the Government, the industry was critical of the Government, the Opposition was critical of the Government. And they all said that the solar industry was about to go through the floor, that applications would actually drop, and that we were providing the death knell for the solar industry.
Now the fact of the matter is that they were completely wrong. The decision that the Government took at the time was the right decision. We will have put more solar panels on roofs in the last year than at any time in Australia's history, and we've provided a significant level of support for solar panels through the rebate.
And the solar credit program, which we are committed to bringing forward, is a program which is non-means tested, which provides families, communities, and businesses with the opportunity to have not only solar panels on their roofs but wind turbines as well.
And we're doing that at a time when the solar industry now has a year's worth of work in the pipeline and where we've seen the price of solar panels and installations come down as a consequence.
So we're very much across what is necessary in terms of supporting this industry. We've provided significant support and opportunities for people.
MATTHEW ABRAHAM: So the message to consumers - because you've talked a lot about the industry but we're talking about consumers, they're the people who have contacted us, you know, voters and householders.
The message to them is, if you thought because the advertising said, that you had until 30 June to get your $8000 solar rebate, bad luck because we've decided it finished yesterday.
PETER GARRETT: Well, the Government has got to make a decision on what time it thinks it's appropriate to go into a transition to solar credits, and we've made that decision and people are perfectly entitled and the solar credit is open for people to make those applications.
And I'm pretty confident that we will see a lot of continuing support and desire to do that. I think the key thing about this decision is that when the Government made the commitment to continue to fund the solar rebate system the commitment in the Budget was $150 million over five years.
Now we said we'd meet that demand, we did that. We then provided up to $700 million consequently on solar rebates and we're monitoring the uptake of those rebates closely.
And in that period of time we've had significant applications but not significant numbers of installations. We now have a year's worth of installations in the system, approximately a thousand a week. And we're providing the opportunity for a transition to solar credits which operates from today which will give people in a non means tested way...
MATTHEW ABRAHAM: So I can apply for the new system today?
PETER GARRETT: You'll be able to apply for solar credits as of today.
MATTHEW ABRAHAM: From today, even though the legislation hasn't passed yet?
PETER GARRETT: Well, that's right because once the legislation is passed and the regulations are tabled it will provide for solar...
MATTHEW ABRAHAM: It will be retrospective?
PETER GARRETT: Correct. It will provide for solar credits to apply for today and our expectation is that the solar credit system which will provide something in the vicinity of $7700 for a 1.5 kilowatt system, will continue to drive sustainable growth of this industry.
MATTHEW ABRAHAM: Seven thousand seven hundred? I thought it was around $4000. So you're saying it's almost the same as the old rebate?
PETER GARRETT: Depending on the climate zone that you operate in, it's around $7700 for a 1.5 kilowatt system, and $5100 in climate zones across Sydney, Brisbane, Canberra, and Adelaide.
MATTHEW ABRAHAM: So $5000 in Adelaide. And the $7700 is for a one and a half kilowatt system. At the moment it's $8000 for a one kilowatt system?
PETER GARRETT: Yeah, you'll get...
MATTHEW ABRAHAM: So, well, you're not comparing apples with apples. What's the rebate for a one kilowatt system in Adelaide?
PETER GARRETT: In Adelaide your rebate for a one kilowatt system is $5150, for a 1.5 kilowatt system, $7750. And that's based on a current price, the $50 RET price, which our expectation on the modelling is will actually increase over time as the renewable energy target starts to kick in.
So I think there's every opportunity for people who are listening to this program to be able to apply for solar credits, to get a one or a 1.5 kilowatt system on their roof for a significant level of government support, and for us to build this industry sustainably over the future.
I mean at the end of the day, having provided now $700 million in support for these rebates, having recognised that there are some 63,000 installations that are not yet even fulfilled, and also recognising that solar credits was the path which we had already communicated in December of last year to the community and to the industry that we wished to take, we've made that decision and it's an appropriate time to do it.
MATTHEW ABRAHAM: Now Minister, just finally - you're listening to Peter Garrett, Environment Minister with the Rudd Government here on 891 Mornings with Matthew and David, as we discuss the solar rebate changes.
Minister, just quickly on a broader issue, the Federal Government, as I understand it, has got, what, a 20 per cent target to have power coming from renewable energy sources by 2020. South Australia expects to reach that target by 2013, and its target by 2020 is 33 per cent. Why don't you shift the benchmark to 33 per cent? If South Australia can do it, one of the smaller states, why can't other states do that?
PETER GARRETT: Look, I commend South Australia for the approach it's taken in terms of renewable energy, but different conditions apply to different states and our desire is to get a 20 per cent target by 2020 happening nationally.
If states are reaching that target earlier on, well then it's a good thing, and my expectation would be...
MATTHEW ABRAHAM: Are you on track to meet the 2020 target?
PETER GARRETT: Well, we believe that a 2020 target is an appropriate way of building significant renewable energy capacity around the country, and my expectation and I think the Government's expectation would be, that in so doing we will see the price of renewable energy come down and the capacity for renewable energy to meet our energy demands to come up.
DAVID BEVAN: And Minister, just before you leave us, yesterday we had a call from Warren of Modbury and he's a little confused about the insulation rebate that you're offering.
He said that he was asked to get a couple of quotes, he got them and rang back to the relevant authority and they said that they didn't know what he was talking about.
Is there a number that people can call if they want advice on insulation rebates?
PETER GARRETT: There is a number and I'm perfectly prepared to get it through to you as we go, but what I would say to him is that the insulation program is up and running. It's a separate program from the one that we've been describing. There is a 1800 number that anybody can call in order to get any information about the rollout.
What we've done now is we've released the guidelines for installers which provides the opportunity for all those small businesses and insulation installers to know clearly what the guidelines are in relation to the program.
We've had a significant amount of public interest in the program and the 1800 number - 1800 808 571 is the number that Warren needs to call.
MATTHEW ABRAHAM: Well done. We caught you on the hop but we do appreciate that, Minister.
PETER GARRETT: No problems.
MATTHEW ABRAHAM: And thank you for being generous with your time, answering our questions and the questions of listeners.
PETER GARRETT: My pleasure.
MATTHEW ABRAHAM: Peter Garrett, Environment Minster here on 891 Mornings. Thank you.