Page 327 - Week 01 - Thursday, 17 February 2011
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mindful of the fact that, because of the RECs impact, for example, we could end up with no systems 100 kilowatts being installed or 299-kilowatt systems being installed to essentially “game” the system. We need to be mindful of the overarching impact of the various federal policies that come into play.
Having spoken about a number of aspects of the bill, I would like to come to our amendment. I think it warrants discussion at the in-principle stage, and I will not need to then repeat my arguments later. Our concern is with the government capping micro systems at 15 megawatts. The Greens do not necessarily oppose the government’s policy objective in seeking to contain the micro system. We understand it is more efficient to do the larger scale systems, that we have instigated a significant amount of installation in the ACT, and that it has had a positive impact in establishing a good, strong solar installation industry in Canberra.
That said, we need to ensure that the small solar businesses in Canberra are not adversely affected by changes to the scheme that create unnecessary upheaval. We are concerned that the mechanism the government is using is one of a cap. The cap on the micro generation schemes at 15 megawatts we believe will have too sudden an impact on the industry. We believe there is a better way to do it. The amendment I am putting forward seeks to look for that better public policy outcome.
Certainly business has expressed some concern to us about the cap on the micro scheme. We have spoken to a number of long-term operators in the ACT and they have unanimously expressed a preference for a gradual winding back of the tariff rate rather than a cap. That is what we are arguing for with this amendment. Our view is that once word gets around that a cap is in place people will start to rush the system. They will know that there is a finite limit and they will want to get in early. We have already seen it. The first ad appeared in Saturday’s Canberra Times saying, “Get in now before the scheme runs out.” We have not even passed the legislation yet. So there will be a rush.
The solar installers, all of these small businesses, will be rushed off their feet. They will be installing as fast as they humanly can. More operators might come into the ACT to meet the short-term demand. Then we will hit the 15-megawatt cap. Bang! That will be the end of it. People will then suddenly stop investing. The orders will dry up and those small businesses that have taken on extra staff, expanded their businesses and been running at capacity to try and keep up with the demand will hit the wall. It is the classic boom-bust thing that has been such a travesty in the way renewable energy policy has been conducted in Australia for as long as I can remember.
We believe the existing legislation already gives the minister the tools to turn down the demand and to contain the system without creating that wall. The way the minister can do this is by the adjustment of the premium tariff. As we know, it can be adjusted annually. It was done last year, and we believe it will probably need to be adjusted again this year. The strength of the Australian dollar and the changing nature of the market suggest the current tariff is too high. The ICRC will examine this in detail. I am not seeking to pre-empt the findings, but anybody who has taken a look at this has the sense the tariff needs to be wound back to match the situation.
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