Solar the Biggest Loser in New RET Agreement
Negotiations on the new Renewable Energy Target (RET) have stalled again. Revised from 41,000 GWh down to 33,000 GWh, a deal was anticipated to be struck by May 8th to bring an end to the stalemate between Labor and the Liberals that has lasted over a year. This new figure is in response to reducing demand over several years in the National Electricity Market. The latest proposal was accompanied by an agreement that the RET would be reviewed every two years, with the first review due in 7 months’ time. This too has become the latest in a number of stumbling blocks for bipartisan agreement.
It is likely that the remainder of the proposed RET capacity will be filled by wind farm projects – which have been sitting on the shelf for months ready to go – as their relative costs for electricity still outpace large solar.
So what does this mean for businesses looking to put solar on their roofs? John Grimes, CEO of the Australian Solar Council, on the eve of the Solar 2015 Exhibition & Conference has issued a call to arms for members to oppose the newly struck deal. Grimes says “that [the new agreement] will devastate every solar business and every solar worker in Australia [and that] household solar, commercial solar and big solar completely uncertain once again”. But some have questioned the validity of this statement as the federal government has confirmed that the Small Technology Certificates (STC’s) are here to stay. STC’s – which cover installations up to 99kW provide an upfront incentive to business for purchasing renewable energy generating facilities – for the meantime will still play a major role in businesses looking at solar.
What this deal may bring as a downside to household and commercial solar is the ability of large solar businesses to purchase equipment (panels and inverters) in bulk at reduced prices. In spite of this setback, it is anticipated that solar technologies in the next few years (2017/18) will overtake wind farm generated electricity as the cheapest renewable source.
Irrespective of the outcome of this deal, commercial solar will continue to grow as costs decrease and companies look to reduce their network and consumption charges.