Australian federal budget "disappointing" for solar10. May 2011 | Top News, Markets & Trends | By: Nicholas Stone
The Australian Federal Budget was handed down in the capital Canberra today providing mixed news for the photovoltaic industry as the government aims to implement over AUD$20 billion (€15 billion) in cuts to return to a surplus.
Treasurer Wayne Swan made major reductions in funding that could see as much as AUD$650 million (€489 million) withdrawn from the photovoltaics industry in the coming years, prompting strong reactions from politicians and business alike.
The building of large scale photovoltaics and solar thermal power stations as part of the Solar Flagships Program, which was originally an AUD$1.5 billion (€1.13 billion) investment, could now see as little as AUD$850 million (€639 million) in investment from the government.
Funds remaining in Solar Flagships are as follows:
- 2011/12 $163.3 million
- 2012/13 $163.1 million
- 2013/14 $241 million
- 2014/15 $283 million
The government is also winding up the national solar schools program in mid-2013, which is two years earlier than they had planned. It is another attempt to save money and leaves only three more opportunities for schools to secure funds through the program that was designed help them install solar and other renewable energy systems, solar hot water systems and rainwater tanks.
Despite a redirection of AUD$100 million (€75 million), the savings are to go to other renewable energy projects and solar is set to be the big loser, with emerging geothermal and wave technology set to benefit from the change.
This has prompted John Grimes, CE of the Australian Solar Energy Society (AuSES), to issue a statement shortly after the events at parliament house criticizing the cuts to solar spending and the up-down nature of funding for photovoltaics, which has left the industry unsure of how much money it will actually have moving forward.
"This is a disappointing Federal Budget for the solar industry," he said. "Another unnecessary solar policy roller coaster."
He added: "The National Solar Schools Program will close on 30 June 2013. This has been a very successful program, and there will be many disappointed teachers and parents tonight."
Bob Brown, the Australian Greens Leader, also spoke out against the big cuts in solar assistance and funding, and said his Party would take issue with the half-billion dollar withdrawal of funds from the industry.
"We note the Labor government's goal of reaching a surplus in 2012/13, but there are better ways of getting there in this era of a mining boom," Brown told the media. "We will not block supply but we will seek to responsibly improve the budget via the parliament. That is our job."
The other big impact for photovoltaics comes through a withdrawal of funds from the Connecting Renewables Program, which will now only be an AUD$1.4 million (€1.05 million) commitment over the next three years to support the design phase.
This aspect of grid infrastructure investment was seen as a critical component of providing ease of connection for solar energy and upgrading Australia to a ‘smart-grid’, something that EU countries are already pouring a lot of money into.
"There should have been AUD$100 million (€75 million) over four years, and AUD$1 billion (€750 million) over 10 years," said Grimes. "Grid infrastructure investment is a critical component of a clean energy future and this program should have been fast-tracked, not delayed."
Despite the heavy cuts, there is still sustained funding flowing into the photovoltaics industry and it could see overall funding return to peak levels as the budget returns to surplus. There were also programs and areas of the industry that managed to secure gains.
An additional AUD$13.7 million (€10.3 million) over two years has been provided for the Solar Cities Program, which is designed to trial new sustainable models for electricity supply and use, and is being implemented in seven separate electricity grid-connected areas around Australia, including the state capitals Adelaide and Perth.
There will also be AUD$53.2 million (€40 million) over four years for the Office of the Renewable Energy Regulator to provide them with resources for additional statutory responsibilities. These measures aim to provide strong regulation, safety and quality in the industry, through the creation of an inspection regime for photovoltaic panels.
This funding will also include $6.6 million for new information technology for the Regulator and it will increase the registration fee for transactions involving small scale energy certificates from eight to 47 cents, raising $14 million over four years.
Funding for the Emerging Renewables program increased from $40 million to $100 million and pushed out to 2023-24, although the time-frame of the investment has been called into question by Grimes of the AuSES.
The Budget was hard overall and it was the first time since 2002/3 that the government did not offer a single tax cut, suggesting that it was not just renewables that felt the strain. Prominent Australian economic commentator Ross Gittins described the budget as "tough".
Towards the end of his speech to parliament, Treasurer Swan indicated that he hoped the budget would encourage a push to renewable energy. "Our industries must transition to the clean-energy technologies of the future, encouraged by a price on carbon," he said.
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