Bungled management of home solar panel scheme

Private Members Business, Renewable Energy

Monday May 28, 2012


I rise to support the motion by the member for Parkes. His issue is with the government’s mismanagement.

There are many failings of this Labor government that could be debated here today—we are pretty spoilt for choice—however, it is the handling of the Small-scale Renewable Energy Scheme that provides us with the latest example of the government’s incompetence.

The scheme targeted the household level consumer and was designed in effect to get more solar panels on roofs.

It subsidises the installation of small-scale renewable energy systems, including solar power photovoltaic, or PV, systems, wind power systems and hydro power systems. It also subsidises the installation of solar hot water systems or heat pump hot water systems.

It has been managed by the creation of small-scale technology certificates under the SRES for each Australian state and territory.

One STC is equivalent to one megawatt hour of renewable electricity generated and has been valued in a range from $25 to $30 over the past year. However, few people have used the system to claim annual credits.

Most have ceded those credits to the installer in exchange for a cheaper purchase price. The scheme incorporated a solar credits multiplier, which increased the value of the credits in its early years, with a peak multiplied price in 2010 of around $43. However, by 2013, in the middle of the year, the multiplier falls to one and has no effect, so prices will stabilise.

Naturally, this market distortion has contributed to the usual government mismanagement. Dodgy operators were attracted to the subsidised scheme, undermining real installers and the industry as a whole.

It has caused a great deal of hurt out there. Just as the Labor Party did with its pink batts program, it completely failed to ensure that the process was open, accountable and honest.

Instead, it again bogged down with Labor values, with the result that, once again, it failed the competency test. Once again, the result is hurting genuine Australian businesses and families.

Like most of the government’s clean energy deception, the outcomes reflect the Labor government’s repeated failure to deliver programs. The Office of the Renewable Energy Regulator set up a clearing house to help facilitate the trade of these STCs.

If the market is in surplus the STCs are worth less than $40; if in deficit, they are worth more. The crux of the problem for the government is that they have established a system which last year had a total of 5,411,596 STCs in surplus. It is worth noting that these STCs can be traded at market value, which at, for example, $25 per STC is a total of is $135 million worth of credits in surplus. Credits in excess of $200 million owned by individuals, families and small businesses are sitting waiting to be traded in a system established by the government.

However, since August last year, there has been an increase of 824,447 STCs for a new total of 6,236,043 available for purchase by emitters. This is a new total of $156 million worth.

The government has created a system where there are renewable energy certificates, but they are in surplus, which can only push the price down.

The end result, unfortunately, will be a bit like Europe printing more money to pay its debts and represents another failure by the government.

I support the member for Parkes in this motion because of the businesses, particularly the small businesses, affected by this—those in my electorate and, as we have heard today, those in electorates all around Australia.

There have been people going out of business, people this has cost thousands of dollars. The amount of worry and the amount of additional pressure this has put on individual small business owners has been extraordinary.

I think that is the crux of this issue.

All the time what we have seen for small business operators around Australia is additional pressure, additional red tape and additional challenges, and the mismanagement of this scheme simply proves that this is another instance of that.

I am really pleased to support the motion by the member for Parkes. He referred to:

(1) failure of the Government to screen disreputable operators …

a major failing—

(2) failure to warn the Australian public regarding the risks associated with solar installation companies operating with questionable practices, despite indication that this was necessary; and

(3) fundamental design flaws—

I have explained them here—

of the SRES program which have caused a glut of Renewable Energy Certificates in the clearing of houses, leading to deep financial stress …

(Time expired)