Australian government to cut back on solar panel subsidies

The Australian government would cut back subsidies for solar electricity panels earlier than expected due to high take-up pushing up power prices. According to climate change minister Greg Combet, this could reduce power bills by up to $100 million next year.

He said demand still remained high for solar photovoltaic (PV) systems, the federal government would therefore phase out its Solar Credits mechanism six months early on 1 January 2013.

This would lower the impact of the high uptake of solar PV on electricity costs for homes and business, he said in a statement. It would strike a balance between easing the pressure on prices and supporting the households and suppliers who installed solar, he added.

He said the overall reduction in electricity bills is estimated to be in the order of $80 million to $100 million in 2013.

According to Combet, the installation of small-scale systems and solar water heaters continued to be supported under the Renewable Energy Target scheme, with solar PV systems benefiting from generous arrangements that provided support for 15 years worth of generation upfront.

According the Energy Networks Association, the government had realised the average electricity consumer was paying a high price to fund subsidies for domestic solar systems.