Australian solar industry could decline by 40% to 50%

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While it has long been known that Australia’s federal government is no great fan of solar or wind, the level of its animosity towards both has been revealed in a report today by the Australian Financial Review.

The report, based on information from unnamed sources within government, said that Prime Minister Tony Abbott’s office had instructed the RET review panel to investigate doing away with the RET completely. This was after the RET reviewers briefed the Prime Minister’s office that it was likely to recommend a reducing to the mechanism.

The RET review is expected to be handed down this week, and the Australian Financial Review has reported that in July the RET review panel briefed the office of the Prime Minister that it would likely recommend reducing the RET, rather than abolishing it. On receiving this news, the government requested the review panel, which it had handpicked and some argued stacked with supporters of fossil fuels, to investigate removing the RET altogether.

The Australian Solar Council has reacted furiously to the news, saying that while reducing the RET would have “gutted the solar industry” in the country, removing the RET altogether would be disastrous.

“Under instructions from the Prime Minister, the Warburton [RET] Review did a hasty back track and is now recommending the axing of the RET,” said John Grimes, the Australian Solar Council’s CEO. “So far the Prime Minister is refusing to release the Warburton Review Report. ??“This is a line in the sand moment for the solar industry. If the Government goes ahead with its plans to axe the RET, demand for solar will fall 40-50% straight away,” said Grimes. “Thousands of Australians will lose their jobs. Hundreds, if not thousands, of small businesses will shut up shop.”

Inside the RET

The RET was conceived under an earlier conservative government, lead by Prime Minister John Howard and had previously enjoyed bipartisan support. An analysis of the affects of abolishing the RET has concluded that it was cost AUD$11 billion (US$10.25 billion) in investment into clean energy through to 2020.

The RET is the mechanism that mandates 20% of Australia’s electricity come from renewable sources by 2020. This figure was set at 41,000GWh. However Australia’s electricity demand has been falling in recent years, due to a range of developments such as the closure of manufacturing facilities and aluminum smelters, along with energy efficiency and the proliferation of rooftop solar PV. This has been used by some groups to criticize the RET and argue for its abolishment.

Groups such as the Australian Chamber of Commerce and Industry says that the RET is driving up electricity prices, although independent modeling suggests otherwise. Research published today by the Australian Financial Review concludes that the RET is responsible for just 3% of the electricity price around the country.

The measure thought to be favored by the RET review panel is to reduce the RET to a figure around 27,00GWh. This would result in the target representing a “real 20%” of Australia’s reduced electricity demand.

This “real 20%” option is favored by environment minister Greg Hunt, who has reportedly been sidelined from the RET review process and is said to be “unhappy” with the process.

The Australian Solar Council has launched its “Save Solar” campaign, to put pressure on marginal electorates in an attempt to sure up support for solar within the government. It is holding a forum this Thursday in the marginal seat of Petrie.