New data has confirmed Victoria’s residential rooftop solar market is already “languishing,” since the state government hit pause on its rebate scheme early last month.
The Solar Homes subsidy, which cuts the cost of installing rooftop PV in half for eligible households, was capped in early April after a deluge of more than 30,000 applications.
The pause, ahead of the $1.3 billion scheme’s official launch in July, was intended by government to pace the rush to solar by Victorian households.
But much to the solar industry’s dismay – and in line with its predictions – installations appear to have flat-lined, while customers wait for the applications to reopen in July.
As you can see in the chart above (click to enlarge), from solar consultancy SunWiz, installations dipped in Victoria in April in line with other states, in response to the annual lull in activity over the Easter and Anzac Day break.
But where the other states bounce back, Victoria does not, giving illustration to the experience of installers, that phones have stopped ringing.
“Other states also dipped through that (Easter) period, but they’ve dipped later, and recovered strongly, whereas Victoria is really languishing there,” explained SunWiz managing director Warwick Johnston in a vodcast last week.
“There are companies out there that are really hurting in Victoria; they really scaled up their operations to take advantage of the rebate, and as a result, may not have a lot of money in the bank to withstand the downturn.”
Certainly, this has been the experience of a number of installers One Step has spoken to, like Stephen Ingrouille, principal at Victorian retailer business, Going Solar.
“Basically it will kill cash flow and businesses can’t survive two to three months without cash flow. Installers and designers will leave the industry and we will be in a mess when they try to resume in July.
“This is bureacracy at its finest, but it has big impacts for small businesses who rely on month by month income, and for community solar bulk buy programs who also survive on small amounts of commission,” said another installer who wished to remain anonymous.
For many, it is another frustrating example of the “solar coaster” of government solar subsidisation – illustrated neatly in the second SunWiz chart, below (click on chart to enlarge).
But Wilf Johnston, who has recently joined inverter and energy storage specialist Enphase after years in solar retail with Energy Matters, says there are other options to retailers through to July.
“Obviously, some companies are lucky enough to have six or eight weeks worth of pipeline in there, which will be of some use to them, to get them through the winter, as it were,” he said, during the SunWiz vodcast.
“But then the other thing, of course, is to look and see, well who never qualified for the rebate in the first place?
“There are households with a higher net income (over $180,000) that are still in the market with or without the rebate, they could never get it,” he said.
“And then you’ve also got the upgrades. … There’s still a significant number of systems out there that are significantly under-powered, especially when it comes to taking advantage of battery storage. And they’re all up-sell possibilities, both for batteries and additional solar.”
“They’re obviously a lower priority when you’ve got low-hanging fruit …(via the rebate). But with that gone, there’s no reason why not to launch some of those upgrade programs… and go back to old marketing data,” Wilf Johnston said.
Warwick Johnston also noted that, from his conversations with Solar Victoria – the state government body tasked with overseeing the subsidy program – there were plenty of applications that were in the system but remained incomplete.
“So it’s a good time to got back to those customers and get them to complete their applications, because they have already met that cut-off date,” he said.