Policy uncertainty paralyzes large-scale Down Under



New data from the renewable energy industry highlights just what impact policy certainty – or the lack of it – is having on small and large-scale markets.

Rooftop solar – largely funded by the balance sheets of Australian households and businesses – continues to surge ahead. That's helped by the fact that federal incentives – paid up front – are locked in by legislation.

The graph below shows the trend in small-scale rooftop solar systems, residential (below 10 kW and in green), and commercial-scale systems (between 10 kW and 100 kW and in blue) over the past year.

After sharp falls caused by the winding back of various state-based FITs, the deployment of solar by homes and businesses has steadied and is now growing solidly.

According to Green Energy Markets, more than 155,000 small-scale solar systems have been added across Australia this year, an average of more than 15,000 per month.

Last month, 16,729 systems were added, for a total of 75 MW (the average size being 4.2 kW), taking the total for the year to 657 MW.

Large-scale solar at a standstill

Meanwhile, construction in the large-scale renewable energy market is at a virtual standstill, thanks to uncertainty about the future of the large-scale market, which has caused bank financing to dry up, and its share of generation is also going backwards.

This is partly due to lower wind speeds, and lower hydro production, as the incentive to generate more hydro is removed because of the dumping of the carbon price and the fall in the value of LGC certificates, due to policy uncertainty.

In October, the share of renewable generation, not including rooftop solar, was 13.1 per cent. That was down from 14.2 per cent in September and 18.3 per cent a year earlier.

In the past month, just four small solar power stations and a small hydro generator were approved.

So far this year, it has been a sorry story for new developments. As this graph shows, less than 200 MW of large-scale renewable plants have been accredited in 2014.

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Of those, two plants – Boco Rock wind farm and the Portland wind farm extension – were committed last year, as was the 20 MW Royalla solar farm which makes up the bulk of the solar total.

The rest of the solar component include rooftop solar projects of more than 100 kW – too big to qualify for the small-scale scheme.

Both Portland and Royalla have been supported by other schemes such as the Clean Energy Finance Corporation and the ACT (Australian Capital Territory) government's solar auction.

Source: RenewEconomy. Reproduced with permission.

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