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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

solar suburbs « Previous | |Next »
May 19, 2008

Matthew Warren is expecting a backlash against Rudd Labor after the dismal budget performance on renewable energy.

Labor went to the election saying it would means-test the Coalition's solar hot water rebate, limiting it to households earning less than $100,000 as part of a broader economic platform to rein in middle-class welfare.

It seemed logical for the Government to extend that to the solar panel rebate, while increasing the number of rebates available. But perhaps they should have consulted the industry first.

Most households who are paying a mortgage and can spare $5000 for solar panels are earning more than $100,000 a year. In the following three days solar installers reported up to 70 per cent of their orders had been cancelled. The hostile reaction on talkback radio revealed outrage from a community that appeared to take vicarious ownership of the generous scheme, even if only a handful actually signed up.

Note vicarious ownership. Warren goes on to argue that other developing renewable industries now have uncertain futures as well. But on the subject of solar panels...

As Robert Merkel points out, the market for solar panels is pretty small at the moment, so the means test will only hit a small number of people. Hardly a backlash. It's also a bit silly to target households when there are so many other much larger vacant rooftops out there. A private home can't compete with what Westfield can offer.

Warren makes the same point:

Solar hot water systems are a cost-effective energy-saving technology for many Australian homes, but rooftop solar panels that generate electricity are still one of the more expensive solutions to climate change. Because of their tangibility and visibility, they have political cachet far in excess of their real value.

Still, I'd argue that in the greater scheme of things, vicarious ownership, tangibility and visibility are important.


Do you want people to feel they have to rely on the government to solve our energy problems, or do you want to give them some sense of ownership? Is it not a good thing in itself for people to feel they can make an active contribution, even if it is only a small one?

The value of household solar panels may lie in their tangibility and visibility, and they may only be tangible and visible in wealthier suburbs, but wouldn't you want them to be desirable? If solar panels become a signifier of success the aspirationals are inevitably going to want them. Wouldn't it be a good thing if people thought about spending their baby bonus on solar panels instead of giant flat screens?

I think means testing the rebate was a mistake from this point of view. The aspirationals point of view. Their rooftops may be individually small and insignificant, but aggregated they're enormous. So is their economic and political clout.

| Posted by Lyn at 2:42 PM | | Comments (10)
Comments

Comments

I just wish the polls would come out. If they don't move that will put an end to this nonsense.

Lyn,
a strange decision. As Alan Gray says in The Age that the solar industry has struggled along without much government assistance for 30 years, but in the past year there has been a spectacular flourishing, due to the $8000 rebate means test. Gray says:

Many families earning less than $100,000 will still struggle to come up with the $5500 (after the rebate) needed to install solar panels and it is reasonable for families earning more than $100,000 to lead the way by bearing costs that will eventually make solar cheap for all. But I fail to see why a family earning $148,000 per year will need the full $5000 baby bonus while a family earning $102,000 should not qualify for a rebate to install solar panels.

Garrett + Co seem to see the solar panel rebate as s some kind of welfare payment not as a climate change initiative.They talk in terms of making the solar rebate more equitable, directing funding to struggling households to help reduce the cost of electricity on poor people's homes .The rebate is seen as middle-class welfare rather than facilitating the shift to renewable energy.

Why not abolish subsidies to the fossil-fuel sector? This politics undercuts Rudd Labor's climate change credibility. As Gray points out this is part of a disturbing pattern with solar power decisions by Labor governments this month. The previous one was the Brumby Government backflip on feed-in tariffs:they will not pay extra for all solar power generated by households, only for excess solar power after what's consumed "in-house".

Merkel's account is flawed. Solar panels need to go on the roofs of factories, schools, and offices, and on households as all have peak demand for aircoinditioning when it is hot. It is about supplying that peak demand.

Gary,
Last night on the 7.30 Report Rudd lumped the solar panel rebate in with the baby bonus and FTB B as if it was about middle class welfare. The budget allocated as much to clean coal alone as to renewables. You have to conclude that they're not as serious about it as they made out, that they're more worried about establishing themselves as economic conservatives. They needn't bother - it's not as if they've got competition.

Nan,
Agreed. Why does the solar panel rebate stop at $100,000 instead of $150,000? Why not redirect Howard's flagpole and Anzac monument for every school money to solar panels for schools?

The baseload argument would be much reduced if there were less demand for baseload, which would be the case if the buildings you mention had solar panels. You have to figure that, as Charles pointed out, they're concerned with the polls and not the problem. Realistically that's to be expected, but I suspect that the plan to prop up coal and neglect renewables will bite them in the end. We'll have higher fuel costs and higher power costs.

Nan: the amount of solar likely to be installed even if the rebate was expanded is a drop in the bucket. It'll have next to no effect on the grid.

Even if we did have enough solar panels to make a difference, it makes very little difference whether we have a lot of solar panels on one big roof, or a few solar panels on hundreds of small roofs. The effect is pretty much the same, except that the one big roof solution is half the price.

Robert,
Right now, all of that is true. What about 10 years from now? Assume this technology gets cheaper. Assume it becomes a norm much like rainwater tanks.

Big roof, little roof is a consideration right now, yes. But shouldn't the longer term aim include everything from an aircraft hangar to a dog kennel? We need to start somewhere and increasing popularity and desirability seems a pretty good place to me.

Nan,
If you want to encourage solar PV rollout, a better policy instrument for unlocking longer term opportunities is guaranteed feed-in tariffs for electricity generation post installation.

It’s clear that the rebate system has fed a boom. It is also clear that restricting the rebate to $100,000 pa households is causing something of a bust, especially for those businesses relying solely on the rebate program for their income. From memory there are separate and relatively substantial pots of money for solar cities and solar schools initiatives that may allow a softer landing for the existing industry. The real spotlight should be on developing a consistent national feed-in tariff strategy for solar and other low emission sources.

Robert,
I thought that good energy policy would be to make sure that to make sure Australia has a diverse portfolio of clean energy options in 2020.

Robert
the reason why the solar panel rebate scheme has been means tested is that it had been too popular and was over-heating.

It makes no sense to me that I draw power to run my airconditioner during a heat wave in Adelaide from electricity generated by a coal fired power station in NSW or Queeensland when I can do so from the solar panels on the roof.

There was little money in the budget for geothermal power ----it strikes me that the budget did not provide much help for the renewable industry.