The sharp spin of Victoria’s solar axe

The latest cut to Victoria's solar feed-in tariff could see another 'valley of death' event for the industry and no matter how the Victorian government tries to spin it, the decision shows staggering ignorance.

If you have never been to a traditional Australian woodchop, you should. Watching the big men annihilating an eight-inch log in seconds is breathtaking.

Although the reduction of the Victorian solar feed-in tariff was not a surprise, the massive ‘kerrchuuunk’ sound that these big cuts make always sends a shiver down the spine of the industry; and the ignorant smirk on the Victorian Minister for Energy Michael O’Brien’s face made it all the more vindictive.

“When we stepped down the subsidies from 60 cents a kilowatt-hour last year, to 25 cents a kilowatt-hour this year, we actually saw demand increase by 33 per cent,” he claimed. Duh. That’s because everyone could see what was next and rushed in before the axes came out.

He even went as far as claiming, “the feed-in tariffs are not driving the growing popularity of solar energy.” Really? Really???

In this staggeringly ignorant (or deceptive) statement, the minister for energy showed his true colours. Take a look at your own statistics Minister O’Brien – and those of every other state back as far as history goes and look at what happens every time a subsidy is threatened or finishes. Sales plummet.

Yes, solar prices are falling. Yes, it’s getting more affordable. And yes, we’ll survive, but only after we got through the ‘valley of death’ once again. I had previously been quite complimentary of the Victorian government’s ‘measured’ response to adjusting tariffs, but this is weak-willed, ill-conceived and a long, long way from a “fair and reasonable” price for solar.

Trying to claim some bizarre credit for increased solar sales as a result of previous cuts is so loaded with spin that the minister for energy would surely win a wood chop with the famous spin required to reef into the other side of the big eight-inch block.

Ironically, the Australian Bureau of Statistics only last week released new data showing that the majority of Victorians who take up solar are the most in need, often in regional areas who desperately need assistance with rising power bills.

According to a 2008 report from the Sydney University of Technology, the Australian electricity industry got around $1.8 billion in subsidies in 2006. The Victorian government’s failure to provide even 1 cent out of its own pocket is therefore a long way from equitable and puts the still emerging solar industry at a distinct disadvantage.

If each of Victoria’s 2.4 million electricity consumers were charged 50 cents a week to create a community funds pool for those who were prepared to put up their own cash to buy, own and operate a solar system, it would raise $67 million p/a to pay for the scheme. It’s really not that hard and the solar industry is equally deserving of support, if not more so.

Nigel Morris is the Director of Solar Business Services.

This article was originally published by SolarBusinessServices. Republished with permission.

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