Dear Prime Minister, State Premiers and Energy Ministers,
Recently, the Australian Energy Market Commission recommended increasing penalties and tariffs to solar owners – in effect, taxing the sun.
This sun tax is outrageous – over 1 million families in Australia have made the move to solar to take control of their energy production and reduce their energy bills. It’s unfair that families who have done the right thing would be penalised in any way.
Solar is not what is driving up electricity costs. Investment in poles, wires and dying technologies are. Instead of a sun tax, you should look at the best way to deal with those network costs, which are, in truth, the real costs increases that are hurting all Australians.
Solar energy is the energy production of the future, growing internationally and rising rapidly here in Australia. We should be increasing investment in solar – not penalising families and letting big power companies dictate our energy future.
Premier John Brumby and the Victorian Labor government has just approved a new coal fired power station to be build by a Chinese company in the Latrobe Valley.
More carbon emissions will obviously result - despite claims that it is somehow "clean".
Update 17 September 2010
Marius Kloppers, the CEO of BHP, today called for Australia to bring in a carbon tax to put a price on carbon and to plan for a transition off coal [link]
In California, the world's largest solar power station has just been given approval to proceed. It will cost US$6b and provide 1000 MW of power. [link]
I have just received a media release from Energy Minister Peter Batchelor stating that the Brumby Labor Government’s feed-in tariff legislation passed by the Victorian Parliament on 25 June 2009.
The final structure of the Victorian feed-in tariff includes:
60 cents credit per kilowatt hour for energy fed back into the grid within that year. This is about four times the current cost of electricity in Victoria.
The tariff is paid to residences, community organisations and small businesses with energy consumption less than 100 MWh a year
An array size limit of 5kW applies
This outcome is a significant improvement on the feed-in tariff initially proposed by the government. Amendments introduced in the Upper House which improved the scheme include:
extending participation to community organisations and small businesses with energy consumption less than 100 MWh a year
increasing the array size limit from 2kW to 5kW
Two electricity retailers have also provided letters which state they will provide cash or rollover credits for energy produced, rather than these credits "expiring" as was initially proposed.
The additional amendment put by the Greens for the tariff to be paid on the gross output (rather than the net output) was not accepted.
The tariff does not apply to large scale solar or wind either, so there is potential to further improve this legislation in the future.
On balance, this is a significant improvement over the legislation initially proposed. The government states that the amendments were made "in response to input from responsible environment groups" which demonstrates that the efforts made to contact politicians and build community support for a good feed-in tariff were successful.
Well done ATA, Environment Victoria, Climate Action Groups and everybody who spent time and considerable effort on this campaign.
I find it very disappointing that the Energy Minister Peter Batchelor is refusing to represent the best interests of the Victorian public by threatening to kill the solar feed-in tariff in parliament.
Peter Batchelor has proposed a crippled feed-in tariff that favours the big end of town. Some energy companies have even been promoting his proposed net feed in tariff several months before it has even been legislated.
The net tariff proposed by Peter Batchelor will not encourage the uptake of solar power by households and community groups.
The Greens have put amendments to provide a gross tariff that has been proven to be effective in other countries and is in line with those in the ACT and Western Australia.
Peter Batchelor cannot even get his sums right. After claiming a real feed-in tariff would cost $100 per household per year, he now claims it will cost $40. He apparently has not bothered to read his own consultant's report that found it would cost about $8 per year. In addition, low-income households can easily be protected from increased prices by granting them a concession.
A simple gross feed-in tariff should have been a easy and effective way for the Labor Government to provide real incentives for households and community groups to increase renewable energy generation and transition off coal-fired power.
Unfortunately, the Labor party is playing politics and looking after vested industry interests rather than listening to the community and taking real action to address climate change.
If the Labor party kills the solar feed-in tariff, you will kill the only real action on climate change you have on the table. I implore you to see sense and support an effective gross feed-in tariff.
To: Richard Dalla-Riva, MLC Eastern Metropolitan Region.
Dear Richard
I am writing you as a resident with Eastern Metropolitan Region to express my concerns about the proposed Feed-in Tariff legislation under consideration in the Victorian Parliament.
The proposed Feed-in Tariff (FIT) structure does not provide sufficient incentives for people, schools and business to install solar power (due to net metering and the 3.2kW array size cap)
This will compromise creating a vibrant jobs-rich solar sector - as they have in Germany where they have a good FIT.
Consumers who export electricity will only be paid "credits", not cash. This effectively removes incentives for energy efficiency appliances. It will also encourage people to "use their credit" by consuming more electricity, since it will not be redeemable as cash.
The Tariff should be amended to a gross tariff with a 10kW cap, as they have legislated for in WA and ACT.
A gross feed-in tariff (as the same for a ‘net’ feed-in tariff) will result in a small increase in household electricity bills – approximately $6-12 per year. Concession card holders should be exempted from this extra cost.
There is wide community support for an effective Feed-in Tariff.
Can you please represent my views on this to the Parliament and within your party?
This post was published as a letter to the editor in The Age on 13 March 2009.
Peter Batchelor's recent announcement that the Victorian government will be seeking proposals for a solar power station sounds promising, but this potential project is not fully funded yet.
At the same time, Peter Batchelor announced that Victoria's proposed Feed-in Tariff legislation has a net tariff structure with a 3.2kW array size cap.
The stated intention for the Feed-in Tariff is to provide incentives for the installation of domestic solar systems. However, the proposed tariff structure greatly reduces the financial incentives to households, which conflicts with its primary purpose. Why cap something you are trying to encourage?
The government has not provided a valid explanation for their proposed tariff structure. It is at odds with the proven effective gross metered tariffs that Western Australia and the ACT have just implemented, similar to Germany's which has created hundreds of thousands of jobs in their solar sector.
The Brumby government should stop playing politics and get serious about solar and creating jobs for a clean green energy future.
Just when I thought things could not get much worse for solar power in Australia after Peter Batchelor succeeded in gutting the Victorian Feed in Tariff (which is yet to go through Parliament, word it is could be introduced around June 9), Peter Garrett and Kevin Rudd announced that the Federal solar rebate scheme would be means tested on $100,000 on household income. This is less than two minimum wages.
This will be the nail in the coffin of the solar panel industry and domestic installation in Australia.
The reasons they gave are simply not valid; the rebate scheme is simply not middle income welfare. While the rebate should not go on indefinitely, it is an important mechanism for shifting us towards emission reductions and a carbon constrained economy.
A means test of 250,000 would be more appropriate, and would encourage many to install panels.
For more information on this, and a link to an email form you can use to contact the Peter Garrett (the Enviroment Minister) go to Acfonline.org.au.
I rang Peter Batchelor's office to discuss details and reasons for the structure of the Feed in Tariff being introduced in Victoria. I spoke at length to one his ministerial advisors. The concerns raised by the advisor and my reponse to them are listed below.
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Thanks for taking the time to speak with me last Friday about the feed in tariff legislation.
In answer to the following concerns you raised regarding gross metering, and your reasons for justifying the 2kW limit: 1. The government doesn't want to pay people for the energy they use
The government should pay a premium for every watt of renewable energy, both when used domestically and when exported to the grid. This is because the energy is zero emissions and directly replaces energy from coal-fired power stations. The energy is also very valuable as it is generated at peak times on hot days when the grid is nearing capacity to supply.
2. A gross metered feed in tariff without the 2kW cap will drive up electricity bills for low income households
Premier Brumby claimed on Stateline (Friday May 9, 2008) that the FIT "would have imposed a significant burden on low income households, with some estimates that this would add up to 10% to the cost of power bills". I understand from you that the economic model used to support this claim is now a Cabinet in Confidence document that cannot be released to the public.
Given that other economic analysis has estimated no more that 1% increase in power bills, I question the veracity of the report (or model) that the government claims has informed their decisions on structuring the FIT.
I also think is is quite inappropriate for such an important and non-sensitive piece of economic information to be subject to Cabinet secrecy. This is not transparent or accountable process or decision making.
In addition, specific measures, such as Government funded installation of a solar system, could be provided for low income households if they are genuinely disadvantaged by the feed in tariff. Other subsidies or grants to them are also possible. 3. The FIT doesn't encourage energy efficiency.
The feed in tariff is not a policy instrument for directly encouraging energy efficiency, and should not be regarded or measured as such. However, households with solar panels generally become more aware of their electricity consumption and production and are therefore more likely to investigate and adopt measures to improve the efficiency of their electricity usage.
A more appropriate way of encouraging energy efficiency - which is complementary to a gross-metered non-capped FIT is to mandate that homes produce an amount (say 15% or 20%) of the energy they consume. This would drive efficiency measures so that the energy production percentage can be achieved (e.g. by solar panels) with the minimum and most cost effective energy generating system.
The Government should also mandate energy efficiency labelling for all appliances immediately. 4. The VRET is a more important factor in encouraging renewable energy
While the Victorian Renewable Energy Target is good to have, I would argue that it should be higher (e.g. 20%). Also, it yields little benefit to household producers with solar panels, it mainly benefits energy companies and large scale producers. I addition, a FIT complements and supports the VRET. Treating them as alternatives is a false dichotomy - we can have both.
5. The 30 minute timeboxing for net metering reduces the impact of the 2kW cap
While this may result in some additional payments to producers I think this will be insignificant compared to what gross metering would yield. This is very complicated too - the vast majority of people simply don't understand this measure.
A 2kW system will supply about 60% of an average household's elecricity consumption, so there will be very little net exports to the grid from such systems. I can see no good reasons for the 2kW cap. In summary
It seems to me that the Victorian government has lost sight of the overall goal of reducing carbon emissions. Many more solar panels on Victorian and Australian roofs would directly reducing carbon emissions, and successful Feed in Tariff models in other countries have proven that this works. In Germany, this has resulted in power now produced from solar panels that is equivalent to two coal fired power stations - Germany now has 4,000 times more energy output from solar panels than Australia.
The Victorian Government's claim on the proposed Feed in Tariff will pay off solar panel systems in 10 years is inaccurate. More accurate financial modelling indicates that it will have negligible effect on reducing the payback period for panels.
Increased clean energy production for solar panels, along with investment in other forms of renewable energy such as wind power and large scale solar, will reduce and hopefully eliminate the need to build any more coal fired power stations which the entire community would have to pay for - and which would also impose significant financial burden on low income households.
I strongly urge the government to modify the tariff to a proven effective and equitable model , which is:
60 cents per kWh
paid for at least 15 years
paid on the entire output of a system via gross production metering
no caps on array size and/or outputs.
This tariff would encourage many more people to install panels, dramatically increase output of clean zero emissions energy, and contribute to a thriving and growing local solar installation industry in Victoria.
It would benefit all Victorians, and be a key local measure in tacking climate change.
What on earth is going on in the Victorian Cabinet?
After visiting the Bali convention on climate change and using their generous travel allowances to see how a good feed in tariff can promote emission reductions and jobs from solar power in countries like Germany, our Victorian Government has delivered a feed in tariff that is crippled and worthless.
It really is cynical greenwash, and follows the trend of them taking no real action to address climate change.
Who in the big end of town has guided them to such a poor outcome? They can't really be that stupid can they? Once again, politics delivers a very poor and non-transparent policy and legislation for the people, who expect so much more.
Read the letter below I sent to Cabinet for more details. And watch this video.
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Dear Mr Batchelor,
Thanks for your late advice about the introduction of the new Feed in Tariff in Victoria further to my correspondence with your office on this matter on 19/3/08.
Unfortunately, I believe that the Government has made serious mistakes in the structure of this tariff, which almost completely negate the positive effects a well structured tariff would have.
My concerns are:
1. The Feed in Tariff is only paid on net metering.
The total electricity generated by panels should be subject to the tariff, as all the clean electricity generated has zero emissions which directly substitutes for coal-fired power and therefore reduces emissions accordingly. In Germany and other locations where they pay the tariff on gross metering, there has been a dramatic rise in installation of solar power. Germany now has 400 times the solar output of Australia despite having about half our sunshine.
You have missed the opportunity to provide similar encouragement to a new economy and local industry (and jobs) based on increased installation of panels on available roof space.
2. The Feed in Tariff has a maximum ceiling of 2kW
This is nonsense. The more solar zero emissions power we generate as a nation the better. This is a critical measure for reducing our emissions to combat climate change. The 2kW array size limit for getting the Feed in Tariff is simply crippling the financial motivation for people to install solar panels, and crippling their payback if they choose to install a bigger array.
We currently have a 1.5kW array that has been running for 6 years and intend to expand it to 3kW. Your Feed In Tariff will provide us with no benefits.
Most five star standard households currently consume about 20 to 25kwH of electricity per day. A 1kW array produces about 5kwH per day, while a 2kW array produces about 10 kwH per day. Such systems will therefore export negligible net energy to the grid, particularly if a 2kW air conditioner is run on hot sunny days.
There is no rational reason to apply such a tariff ceiling; it should be removed. 3. No certainty for investment is provided
The complexities and restrictions of your feed in tariff resulting from net metering combined with the 2kW ceiling provide no certainty or guarantee for investment in a solar array, unlike gross metering with no ceiling which does. This is evident in countries like Germany where there has been significant investment in solar power - now the equivalent of two coal fired power stations, but with zero emissions.
The resultant lack of certainty for investment will greatly impede the uptake of solar power in Victoria. 4. Your Feed in Tariff is discriminatory.
The very few who may be lucky enough to benefit from your tariff will be those who can afford a 6 star house, relatively expensive efficient appliances and a 2kW array. By contrast, lower income less efficient households with a 1kW array and less efficient appliances will get no benefit. This is discriminatory.
In summary
Your assertion that the FIT "could pay off the cost of installation in less than 10 years" is incorrect. The combination of the 2kW ceiling and paying on net metering means very few, if any, will get any financial benefits from the tariff so it will be impossible for it to pay off the residual cost of solar panel installation after the rebate.
This scheme effectively does not deliver on Labor's 2006 election promise to introduce a workable feed in tariff due to its crippled nature.
Your tariff will not provide any incentive for leadership in Victoria in uptake of solar power or renewable energy initiatives.
Your tariff is not strategic and does not improve affordability of sustainable solar power. It will not empower Victorian households to take action on climate change.
I attended the rally at parliament today with 400 others to protest about the problems with your feed in tariff. I spoke to some of the many ETU members present who had expectations that the Brumby government would provide a feed in tariff that would stimulate local employment in clean energy energy industries. They feel you have let them down. I agree with them on this.
Your tariff has also not met the expectations of many local community groups who are very keen to see real government action on climate change. As such, it is a great disappointment.
I strongly urge you to adjust the tariff to remove the 2kW ceiling and use gross metering, so that Victoria can mirror the proven success of such tariffs where they have been implemented elsewhere and I understand will be implemented in the ACT.
As a reference, http://www.greenlivingpedia.org has many examples and much information about successful and implemented renewable energy policies, initiatives, and sustainable housing.
I would like to meet with you to discuss my concerns about this further. Yours faithfully,
