Solar News

Federal Government winds back Solar Rebate

27 May 2008
Category: Government

By Brad Stone, ATA Energy Policy Manager

Despite being sold as 'Increased funding for solar rebates in 2008-09', the Rudd Government's first budget has actually seen a winding back of the federal rebate for solar power. Formerly known as the Photovoltaic Rebate Program (PVRP) the rebate offered up to $8000 for the installation of solar electricity systems on roofs, and had been incredibly successful in increasing the uptake of this important technology; perhaps a bit too successful.

In the previous government's final budget just on 12 months ago, PVRP was doubled from a maximum of $4000 to an $8000 cap. As a result there has been a dramatic increase in uptake of solar power, with 35% of all solar installed in eight years of the program occurring in the last six months.

Given this increased rate of demand for solar, firstly the Howard and now the Rudd governments have had to borrow from future years of the program to pay for the present. It is this increased demand that the government is trying to cool with last night's announcement.

The announcement involves both bringing forward more funds from the $150 million over five years allocated last year by former treasurer Peter Costello, as well as applying a means test to the PVRP, limiting access to households with a combined income over $100,000. This will undoubtedly see a decrease in the uptake of solar PV, as the affordability to home-owners is dramatically reduced.

Rather than welcoming the boom in solar power system installations around the country and addressing the increased demand on the federal rebate with an increase in funding, the Rudd Government has instead tried to dampen enthusiasm by applying a means test.

Further, the failure to commit additional funds to this important program and instead borrow from future funding, with no indication as to whether those funds will be replaced, could indicate that the end is nigh for the PVRP.

This is a disappointing response at a time when we should be facilitating the uptake of solar PV and other renewable energy technologies as important strategies for combating climate change.

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