FIT battle puts PV at the center of politics

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Plans announced by the government of the state of Western Australia (WA) to cut the solar FIT rate for households that have already installed a photovoltaic array from AUD 0.40/kWh to AUD 0.20/kWh have been met with stiff opposition from voters and also from within the government’s own ranks. Only four days after announcing the decision the government has decided to backtrack and keep the FIT at its previous level.

The government decision, which was handed down in the state of Western Australia’s budget, would have seen households which have installed a solar array as far back as 2009, see their FIT rate halved. Under the original program the FIT was to be paid for 10 years.

However, in the face of criticism from opposition parties, from the renewable energy community and from within the government itself, the West Australian state government has decided to reverse the decision and the FIT will be maintained. The halving of the FIT was hoped to have saved the government around AUD50 million over four years.

The renewable energy sector has responded positively to the news of the government reversing its decision, saying that it indicates the high level of support there is for renewable energy in the community. "Our hope is that this will further reinforce to governments, in WA, across Australia, and globally, the high level of public support for renewable energy," said the Sustainable Energy Association’s Kirsten Rose.

The decision to reverse the FIT rate cut was taken at the government’s cabinet meeting, earlier today. In announcing the decision, state Premier Colin Barnett said that the government had listened to the community. "Quite simply, we got this decision wrong and we have to fix it," said Barnett.

Celebrating the decision, Australian solar industry consultancy Solar Business Services said that the power of solar voters had been demonstrated. "For those of you in the solar industry who were unaware, you have a solar crack squad working for you and this squad mobilised within minutes of the decision to axe the scheme being made," Solar Business Services wrote in a press release. It claims that government members of Parliament (MPs) were inundated with complaints after the decision was announced.

There had been opposition to the move from within the government. Over the weekend, the decision was announced late last week, two members of the government-forming Liberal party had spoken out against the move saying the government had acted with a lack of integrity on changing FIT commitments for households which had already installed solar.

"I think it’s a legal issue, but it’s also a moral issue," said government MP Rob Johnson. "For the sake of just $10 million a year, to renege on this and basically dud so many West Australians is a disgrace." Johnson had threatened to "cross the floor" and vote with the opposition on the issue for the first time in his 20 year political career.

Johnson was not alone in his party’s ranks in criticizing the FIT move. Peter Abetz described the decision as unethical and unnecessary and vowed to take the issue up with the party leadership. Abetz and others presumably had made their voices heard given the government’s quick reversal of FIT policy.

Interestingly both Johnson and Abetz are sitting members in the "mortgage belt" areas of the WA capital of Perth. While FITs have been criticized as going to higher income families, in Australia, solar installations have been observed as being installed in middle to lower class areas. These households make up the "mortgage belt" and there are both Johnson’s and Abetz’s constituents. There is also an Australian federal election to be held early next month and potentially upsetting these voters at this time would have been politically sensitive.

Australia has around 1 million households with photovoltaics installed and previously the point had been made that solar households were becoming politically significant. The machinations in the state of WA over the past four days appears to have confirmed this.

In a post on the Australian renewable energy website RenewEconomy, Warwick Johnston from SunWiz, sought to highlight how some electorates in the forthcoming federal election could be influenced by a change in FIT policy, at the state level, in WA.

"One in five households own a PV system in the federal seat of Hasluck, which was held by Ken Wyatt of the Liberal Party by a margin of 0.6%. 500 votes could decide whether Liberal candidate Ken Wyatt is thrown out. I presume 8704 solar voters won’t be excited by the WA Liberal Party halving their promised solar income, (plus another 8000 solar voters now scared their entitlements may be slashed at a whim). Eight federal seats (six of them currently held by the Liberal Party) could be decided by solar voters irate at the Liberal Party, plus another five seats (three of them held by the Liberal Party) threatened by the Liberal Party’s treatment of solar power."

Ken Wyatt tweeted today that he welcomed the state government’s policy reversal. "Pleased to hear state gov decision reversed re solar tariff. Hasluck families don’t need any more cost of living pressure," he wrote. The WA Greens welcomed the move tweeting that it is a: "Fantastic day for renewable energy & solar power!"

There had been some doubt as to whether the move to halve the FIT rate would stand up in court, after the government had committed to the FIT rate for 10 years before the households had installed PV. One prominent local lawyer had even suggested that local solar installers could have been liable if the FIT rate changed as first announced.

FIT cuts have been common in photovoltaic news around the world, and rightly so with the falling cost of solar components and installation, however cuts to rates once an installation is already in place are invariably controversial.