Victorian opposition leader Michael O’Brien has pledged to call for a parliamentary inquiry into the Andrews government’s rooftop solar rebate, as industry gathered in protest against the 2.6GW scheme on the steps of state parliament on Thursday.
Speaking to the rally of more than 300 solar installers and retailers, O’Brien, who is also shadow minister for small business, said that the government had got the design of the rooftop panel subsidy wrong, and needed to fix it – or scrap it – to prevent job losses and company failures.
“Who would have thought that a policy intended to expand solar in Victoria is actually on the path to killing solar in Victoria,” O’Brien told the crowd.
“It is unbelievable the way this policy, which started off with good intentions … has damaged businesses.
“When parliament resumes, (we will) push for a parliamentary inquiry into (this) complete debacle.
…The government has got it wrong and needs to fix this now.”
The rally, organised by the Smart Energy Council, also heard from solar business owners who claim that installations have come to a stand-still since the launch of the policy, which offers a cash-back rebate of up to $2,225 on solar panels; roughly half the cost of a 4kW PV system.
SEC’s chief executive John Grimes told One Step that he knew of three solar businesses that had gone into liquidation in the last couple of weeks, because the industry had been strangled by the design of the scheme.
“These are the good guys,” Grimes said. “One company under threat of liquidation bussed its entire staff of 40 people to the event. I’ve seen people in tears. It’s bad, really bad.”
Grimes said the scheme was poorly designed and overly complex, making it all but impossible for many installers and customers to negotiate. Rather than boosting the industry, it had effectively put an arbitrary cap – and at a size nearly half that of the pre-rebate market.
“We’re hurting, we’re struggling,” said one installer, who claimed that her business was doing 30 or 40 installations a month before the government dangled its “solar carrot.”
“Our factory has never been so clean, to try and keep our workers occupied.
“Would it be so bad if they cut the rebate?… If (it) didn’t exist, the market would just return to natural. …This government is restricting our trade.”
Finn Peacock, a solar veteran of 10 years who runs a business called Solar Quotes, said the current situation was “the worst thing I’ve ever seen” in the industry.
“I would never have believed that government could do this to an industry …I think they have to scrap the entire rebate, or they have to halve it.
“Almost everyone (I have spoken to) has told me that if August 01 is like July 01 they won’t have a business.”
July 01 refers to the date the state government body Solar Victory reopened the rooftop solar rebate to applications, while also launching rebates for batteries, and offers of no-interest solar loans.
As we have reported, Solar Victoria has opted to limit the number of rebates open for application each month to 3,333, to avoid the sort of damaging stop-start effect that such policy mechanisms can have on industry.
But this did not work so well in the first month, with a 3,333 applications filling in just days – thanks to pent-up demand from a three-month pause in the scheme – effectively putting applications on hold again until the first day of August.
Solar Victoria has said it expects the system to start balancing itself out in coming months, as industry acclimatises to a new system.
“It’s going to take some time for us to get to the point where we’re actually not only releasing 3,333 applications, we’re also approving them, but they’re also in market getting installed,” Solar Victoria CEO Stan Krpan told One Step’s Solar Insiders Podcast this week.
Krpan also argues there is enough work in the market outside of the realm of the rebate for businesses willing to seek it.
“We’re incentivising a portion. Clearly there are people who exceed that income threshold, there are people who are interested in solar whether or not they get a rebate, and there are also commercial customers,” he said.
“At no stage did we want to effectively want to subsidise 100 per cent of the market… There are still businesses that are doing very well without a reliance on the rebate.”
Needless to say, this is not the view of solar business owners and employees who attended Thursday’s rally. Nor is it the view of the SEC.
“Government don’t believe us,“ SEC chief John Grimes told the crowd. “They say there is no problem … they say that it’s your fault because you can’t run a business properly.”
Calls to “halve” the scheme refer to the income threshold for households to access the rebate – currently set a $180,000 a year, combined.
The SEC and its members have argued that halving this amount, or reducing to at least $100,000, would focus the rebate on lower income households in greater need, and leave a greater chunk of the Victorian market to return to business as usual.
Again, Solar Victoria does not agree. According to Krpan, the majority households accessing the rebate earn less than $100,000 a year, and 20 per cent earn less that $20,000.