Bloomberg News

Australia Phases Out Solar Credits Early to Curb Power Bills

November 16, 2012

The Australian government said it will phase out a solar incentive program in January, six months earlier than scheduled, to cut electricity bills for homes and businesses next year by as much as A$100 million ($103 million).

The decision “will strike the appropriate balance between easing upward pressure on electricity prices and supporting households and suppliers who install solar” systems, Climate Change Minister Greg Combet said today in a statement.

The government program provided additional support for small-scale solar power by multiplying the number of certificates the systems would create under the government’s Renewable Energy Target, according to the statement.

The early removal of the incentives is a “decisive and positive step by the government toward minimizing the cost burden of the renewable energy target on Australian families and businesses,” Origin Energy Ltd. (ORG), Australia’s largest electricity retailer, said in an e-mailed statement.

The Sustainable Energy Association of Australia said the decision was “untimely and unnecessary.” Electricity regulatory reform would dwarf savings from the government’s announcement today, according to the industry group, which represents companies from Rio Tinto Group to Wesfarmers Ltd. (WES)

The government is still supporting small solar systems and solar hot water heaters with its renewable energy policy, which sets a goal of getting 20 percent of the nation’s electricity from renewable energy by 2020, Combet said.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net


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