What the new PM could mean for solar Down Under


The tumultuous ride experienced by Australia’s solar industry looks set to take another new twist, with the country to see a new Prime Minister who is likely to be more supporting of solar and renewables than former Prime Minister Tony Abbott. Abbott himself took the mantle at the country’s Liberal Party back in 2009 largely on the back of opposition within the party of former leader Turnbull’s progressive policies on tackling climate change. Tony Abbott won the 2009 leadership ballot by one vote.

So what to expect from Prime Minister Turnbull and what would it mean for the solar industry? While difficult to say with any certainty, Turnbull’s position on combating climate change has never been ambiguous. Particularly in his time on the backbench following losing the Liberal leadership to Tony Abbott, Turnbull was outspoken in his support for strong action on climate change.

“I will not lead a party that is not as committed to effective action on climate change as I am,” Turnbull told the ABC. In a post-leadership spill blog he went one step further: “While a shadow minister, Tony Abbott, was never afraid of speaking bluntly in a manner that was at odds with Coalition policy. So as I am a humble backbencher I am sure he won’t complain if I tell a few home truths about the farce that the Coalition’s policy, of lack of policy, on climate change has descended into.”

In terms of climate change policy itself, Turnbull has said on a number occasions that reducing greenhouse gas emissions without incurring costs is entirely unrealistic. Turnbull has written in the past: “… any suggestion that you can dramatically cut emissions without any cost is, to use a favorite term of Mr Abbott, ‘bullshit.’ Moreover he knows it.”

Turnbull has also spoke in support of climate scientists and leading Australian scientific organizations, such as the CSIRO, over the position they have taken on climate change. This has often been in an environment hostile to the science behind climate change, in which the government’s top business advisor Maurice Newman has consistently derided the science even going as far as to label attempts to combat climate change as a global socialist conspiracy.

“It is undoubtedly correct that there has been a very effective campaign against the science of climate change by those opposed to taking action to cut emissions, many because it does not suit their own financial interests, and this has played into the carbon tax debate,” Turnbull said in a speech in 2011. “Normally, in our consideration of scientific issues, we rely on expert advice [and] agencies like CSIRO or the Australian Academy of Science, are listened to with respect. Yet on this issue there appears to be a licence to reject our best scientists both here and abroad and rely instead on much less reliable views.”

Outlook for solar

While all of this looks positive for action on climate change from Australia, which is has been somewhat of an international laggard on the issue, it in unclear what particular policy route a government under Prime Minister Turnbull would take.

However, in saying that, it is likely that the government’s Direct Action scheme, which provides grants to big polluters to reduce emissions is reinforced with more ambitious baselines making it more effective. This may very well take the shape of some kind of carbon trading regime, which would assist solar in its march towards competitiveness with conventional generation assets and in particular aging coal fleet.

The efforts by the Abbott government to dismantle or undermine bodies such as the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) are also likely to be wound back, as both agencies have proven effective in seeing renewable deployment at little cost to the taxpayer. Last week both agencies launched programs to support large scale solar projects. An recent instruction to the CEFC not to fund rooftop solar programs may also be reversed.

Australia’s support for residential solar is also likely to be maintained by a Turnbull government. Despite recommendations from its hand-picked review board of Australia’s Renewable Energy Target that the small scale solar rebate scheme (SREC) should be scrapped, it is very popular with the public and represents a major subsidy of rooftop PV in the country. Prime Minister Turnbull, despite his largely conservative economic mindset, is unlikely to wind up the scheme due to its popularity and effectiveness in supporting solar deployment. Australia installs around 700 MW of rooftop PV each year.

In his public statement announcing his moves to challenge the Tony Abbott’s leadership, Turnbull pointed to changing global economic paradigms, themselves underpinning renewable deployment. This stands in contrast to Abbott who has repeatedly been strident in his support for historic economic sectors such as the coal industry, coal generators and new coal mines, saying that coal is “good for humanity.”

“He [Prime Minister Abbott] has not been capable of providing the economic confidence that business needs. Now we are living as Australians in the most exciting time. The big economic changes that we're living through here and around the world offer enormous challenges and enormous opportunities,” said Turnbull.

Tony Abbott has sought to aggressively wound back renewable deployment in Australia. One of his proudest achievements is scrapping the country’s price on carbon. He wound back support for renewables and was happy to cut the Renewable Energy Target, essentially freezing large scale renewable deployment for three years due to investment uncertainty, after which time the renewable sector was willing to accept a cut to the RET. While it is unclear what direction a Prime Minister Turnbull will take, it is likely the antagonism towards solar and wind power will lift.

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