Upfront solar subsidies could be an incentive of the past, with startling new enquiries lead by Energy Minister Ben Wyatt who has spoken out about supporting the ultimate scrapping of or reduction of upfront solar subsidies for Western Australia.
Energy Minister Ben Wyatt has claimed that ‘the cost of solar PV systems has reduced significantly’ (Source: The Western Australian) since solar was first introduced in Australian homes and has now become an affordable home-improvement feature.
Currently, when purchasing a residential rooftop solar PV system, eligible customers are given an upfront subsidy off the purchase price which is expressed as a discount on the total cost of the system. This is in the form of certificates through the Small-Scale Renewable Energy Program funded by the Australian Government Clean Energy Regulator.
The value of the subsidy provided by the Australian Government has reduced over the years since its initial launch, this is in accordance with the price of solar as well as the uptake. This means that while the initial subsidy offered was quite high making adopting solar very easy for households, nowadays the value of the solar subsidy allows the residential systems to be affordable for households. With not all households having the financial resources available to install rooftop solar, this final upfront subsidy provided by the Australian Government may unfortunately see the price of installing residential solar rise considerably for homeowners with no one else left to bridge the gap in affordability.
Currently, energy retailers Synergy and Western Power are required to pay households with rooftop solar a minimum feed-in credit to the value of 7.1c/kWh of energy fed into the national grid. Claims that a feed-in credit will be enough for homeowners all over Australia to justify removing the entire subsidy and scrapping it by 2021, over nine years before its original finishing date of 2030 will cause more financial burdens for households struggling to keep up with the rising cost of utilities.
Homeowners who adopted solar early were offered a premium feed-in tariff of up to 51c/kWh for energy exported to the grid, this offer has been stopped, and a minimum feed-in tariff was since introduced to cater for the larger residential market.
This support to prematurely remove the subsidy is not isolated, with the ACCC recommending this to be removed by 2021, it is no surprise that Western Australia Energy Minister has showed his support and neglect to the homeowners of WA struggling to keep up with the rising cost of energy. To read more about the ACCC’s recent recommendations click here.
By removing the last remaining upfront solar rebate for homeowners prematurely, this will hurt Australian families struggling to keep up with the rising costs of keeping the lights on and appliances powered throughout the day and night.
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Contact Sunbank Solar for all your residential solar needs on 1300 28 29 30.