Combet to phase out solar credit multiplier
Minister for Climate Change, Greg Combet stated last week in a media release that the Solar Credit multiplier used to increase the number of Small-scale Technology Certificates (STCs) available to roof top solar systems will be cut on 1 January 2013.
The reason for this decision is to combat increasing energy commodity prices, specifically the component that represents Renewable Energy Certificate (REC) pass-throughs. In terms of STCs, payments are made to households to incentive the installation of solar PV systems. These cash incentives are financed by payments made by large emitters who are liable to purchase an amount of RECs to offset their emissions for that period. This cost to emitters is then passed on to consumers. In the case of energy generators, this cost is passed through the energy supply chain and ends up being paid by the consumer in the form of STCs and Large Renewable Energy Certificates (LRECs). According to Combet, scrapping the scheme from a multiplying agent of STCs to a one-for-one arrangement would save consumers between $80 and $100 million in 2013.
The multiplier did have a termination date and was only envisaged as a temporary sweetener for installing roof top solar, the phase out on 1 January 2013 is an acceleration of that termination.