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Grattan Institute calls for Solar Subsidy Overhaul


Monday’s release, Sunrise, Sundown – How Australia can finally get solar power right, by the Grattan Institute has called for changes in the way rooftop solar programs are subsidised. Tony Wood, Energy Program Director at the Grattan Institute, says “households and businesses that have not installed solar PV will have spent more than $14 billion subsidising households that have” by the time the subsidy program finishes.

Research conducted by the Grattan Institute found that the current subsidy program had costs outweighing benefits by almost $10 billion.

Apart from calling for reform of the subsidy program, the report highlights how effective solar rooftop programs have been in Australia. This effectiveness is highest in Queensland and South Australia where electricity prices are most volatile.

In fact Australia is now the global leader in solar rooftop penetration, with both South Australia and Queensland boasting greater than 40% owner-occupied houses with rooftop solar.

The explosion in solar rooftop in Australia is due to a couple of reasons. First, on a federal level the Small-scale Renewable Energy Scheme (SRES) has been a stable source of rebate for many years to prospective buyers. Second, the state based feed-in legislations have meant that solar rooftop owners now have more certainty on the value of the solar they feed back into the grid.

And with recent developments the governments recently released budget, small businesses look likely to be able to claim small sized solar PV systems (under $20,000 in value) as a tax write-off.

Certainly for the interim it seems that the solar industry will have its foot firmly to the floor. But, if findings, like those in the Grattan Institute’s report, get traction then we might not see the good times last forever.