Solar industry warns of “bloodbath” if Victoria rebate not changed

The solar industry has intensified calls for the Victorian government to review the design of its “absolute monster” of a rooftop solar rebate, amid reports of failing businesses and frustrated consumers.

Industry peak body the Smart Energy Council says a “massive gap” exists between the Labor Andrews government’s perception of the success of its Solar Homes scheme, and what has been happening on the ground.

“The phones have stopped ringing, the debts are mounting… That’s what the whole industry is facing,” said SEC CEO John Grimes in a webinar on Wednesday.

“Government continues to believe that the program is working very well, and is very well designed… (but) industry has been on pause since April. …Companies are closing today.”

Grimes, who met with state energy minister Lily D’Ambrosio on Tuesday, says the SEC has been inundated with calls from rooftop solar retailers and installers whose businesses have suffered under the policy scheme.

He says many previously busy installers have had no work since the first pause in applications for the rooftop rebate in April, and more than a few are facing the prospect of shutting their businesses down.

“I’ve got (more than) 30 stories like that I can tell,” Grimes told the webinar, “and in every case I have had to play the role of counsellor… (because) these people are absolutely devastated and gutted.”

The SEC argues there are two key problems with the design of the rooftop solar rebate: the application process is a “nightmare” to navigate – both for households and solar retailers; and that there is too much demand and not enough supply.

The latter issue has been thrown into stark relief this month, after July’s allotment of 3,333 rebate applications was exhausted within just days, putting the whole process on hold again until August 1, when another 3,333 will become available.

Solar Victoria, the government-based outfit that oversees the Solar Homes scheme, put this down to pent-up demand – itself the result of a pause in the scheme for the three months to July, after it attracted more than 32,000 applications in its first six months.

But the SEC says the current design of the scheme, where a small number of rebates are opened to applications each month (a total of 40,000 for the 2019/2020 year) is having the effect of putting the industry perpetually on hold.

“It’s working as an effective cap on our industry, not as an extension,” Grimes said.

Indeed, it is to the point where some installers are questioning whether this is a deliberate effect of the policy, as Victoria’s electricity network operators scramble to keep up with the massive uptake of rooftop solar, and its future role in a rapidly changing grid.

“I mean, we’ve got the best rooftop solar rebate in the country, but business has come to a grinding halt,” said one installer in comments to the webinar.

Meanwhile, the situation is not much better for consumers, thanks to what Grimes describes as an “absolute monster” of an application process that people are saying is more difficult to navigate than a home loan.

“A whole lot of people are abandoning the process,” he said. “For those who do want to do the right thing, they’re being told you’ve got 3.5 seconds to (submit the application).”

To remedy the supply-demand problem, the SEC and fellow industry peak body the Clean Energy Council – which is also calling for an urgent review of the Solar Homes scheme – have both recommended lowering the income threshold to qualify for the rebate, currently set at a maximum of $180,000 per household.

But Grimes says much more needs to be done – and fast – if industry-wide job losses and financial suffering are to be avoided.

“If I were energy minister, I would abolish that Solar Victoria approvals process outright,” he said.

“(They) should also put more money into this program, or adjust it – make the rebate half the amount, for twice the number of people…

“There’s a window of opportunity between now and August 1 where really radical change needs to be made,” Grimes added.

“But if that’s not made, there are massive consequences. All those people hanging on … it will be an absolute bloodbath in the industry.”

So far, government has ruled out making any changes to the application process or the eligibility criteria of the scheme. But Grimes says the energy minister is open having a conversation with industry about any “transition difficulties.”