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Rooftop solar changes unsettle industry, raising fears worse to come

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For the solar industry, this should be the best of times: a record year for rooftop installs and the long awaited boom in large-scale solar. But nervousness about the future has been betrayed by its reaction to regulatory changes to the small scale rooftop solar scheme, and rumours of more punitive changes to come.

Australia’s peak solar energy body has called for a written clarification from the federal government, after confusion surrounding proposed amendments to the Renewable Energy Target triggered concerns that the booming commercial solar market was being wound back.

The confusion began on Monday, when the Australian Solar Council released a statement to its members alleging a federal Coalition MP had told an ASC member company that the Turnbull government had decided to abolish STCs for “commercial solar projects,” sized between 10kW and 100kW.

As the ASC noted in its emailed statement, such a decision “would have profound implications for our members and their businesses,” not to mention for the huge number of big, medium and small businesses trying to cut the costs of their energy supply by installing PV panels on their roofs.

(As data from industry analysts SunWiz illustrated last week, commercial solar is the rising star of Australia’s PV market, with installations between 10-100kW now making up 32 percent of total installed capacity.)

But it now seems that the ASC’s source had their wires crossed, and no such change will be made. Rather, as the Clean Energy Regulator confirmed early this afternoon, it is working with the Department of the Environment and Energy on RET regulation amendments, one of which includes a proposed requirement that solar systems between 10-100kW can only participate in the Small-scale Renewable Energy Scheme.

Currently, systems of this size are able to participate in either the Small-scale Renewable Energy Scheme or the Large-scale Renewable Energy Target.

In short, says the CER, the proposed amendment – part of a broader set of RET amendments currently open for consultation and available on the department website – “does not impact on small-scale technology certificate eligibility for systems between 10kW and 100kW.”

The events highlight the state of confusion and anxiety in the solar industry, which despite enjoying its best year ever – in both rooftop and large-scale installations – is besieged by rumours of changes to both the nature of the small-scale scheme, and even of the value of the clearing house certificates.

Much of these rumours might be put down to baiting by conservatives and the incumbent fossil fuel industry, but solar’s sangfroid has been challenged by the incomprehensible nature of the national policy debate, and the unveiling of modelling by the Energy Security Board, in support of its proposed National Energy Guarantee, that appears to assume, if not call for, a rapid slowdown in the deployment of solar.

The mood in the industry is not improved by recent experience from the current Coalition government, which engineered a three-year strike in large-scale renewable energy investment – a policy goal that has helped contribute to the surge in electricity prices in the last few months.

During Tony Abbott’s time at the helm, the party also tried ceaselessly to abolish the Australian Renewable Energy Agency and the Clean Energy Finance Corporation and, on failing to do so, resorted to cutting back their funding.

While many think the Coalition would be foolish to tamper with the small-scale scheme, given its importance to households and small and medium-sized business to reduce their bills, nothing can be ruled out.

And that is why ASC chief John Grimes remains unconvinced by the Regulator’s assurances.

Grimes told RenewEconomy he would be very happy to put the STC rumour to bed – considering the devastating impact it could have – but would only do so with written assurance from the Turnbull government that any changes to the STCs for the commercial solar market were “absolutely ruled out.”

“I’m worried because this rings true to me,” Grimes told RenewEconomy. “What we’ve seen with the announcement of the NEG is a renewed intent to push back renewable energy and to promote incumbent fossil fuels, and particularly coal.

“You can’t blame the industry for being nervous,” Grimes said. “This is not something that is fabricated (by the ASC). This is something a senior government backbencher said.

“Ultimately, (the federal government) need to put out a written statement, and then we will be happy to put this concern behind us.”

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