Rebates are dumb, there’s no two ways about it. As the Grattan Institute report Learning the Hard Way illustrated, they’ve been used as a political quick-fix that often hurts as much as helps further a particular emissions abatement technology.
The problem is that they don’t provide long-term, predictable growth for industry investment and, at the same time, they lack any clear link to social or environmental objectives, as well.
The Million Solar Roofs rebate was no doubt dreamed-up by a bunch of 'hollowmen' who’d done some polling that found people really like solar, but don’t like the word 'tax'.
'Great,' they no doubt thought, 'we can axe the carbon tax and still fool people we care about climate change because we’ll give them a rebate on a solar panel.'
Of course, then the solar industry said: 'Ahh, but we’ve already got something that helps encourage the uptake of solar – it’s called the Renewable Energy Target. Do you think you could just promise to leave that alone and we’ll deliver you a million solar roofs faster than your rebate policy?'
But that’s already government policy, the hollowmen thought, saying to themselves:
'Hmmm, that won’t help us get elected saying we’ll just do what the other guys' are doing. And what are these STC thingys? That’s way too complicated to be distilled into a three-word slogan. Million Solar Roofs has a way better ring to it.'
The hollowmen then went to check with the leadership:
'The solar industry say we’re going to hit a million solar roofs anyway, with this thing called the Renewable Energy Target. They’d just like a promise that we just leave it as is, and we’ll get our million solar roofs faster than planned and it won’t cost the budget anything. What do you think?'
'No can do,' say the leadership. 'We promised some power generators that came and saw us last week, as well as a few senior wealthy Liberal Party members with hobby farms, that we’d review the Renewable Energy Target.'
'Just tell them we’re committed to "20 per cent", but don’t mention any gigawatt-hours ok?'
The hollowmen scratch their heads then, puzzled, ask each other simultaneously: 'What’s a gigawatt-hour?'
It then gets close to the election. 'Geez, the Labor Party won’t let up with nagging us to reveal how we’ll solve this debt and deficit thing we keep banging on about. Don’t they know it was just meant to be a slogan?' say the hollowmen.
'We need something to cut from the budget to keep the media off our back. Hey, didn’t those solar guys say we’d reach a million roofs anyway? Why don’t we halve the solar rebate to $500?'