The head of Solar Victoria has defended the state government’s rooftop PV rebate, as industry prepares to rally outside state parliament, in protest of a scheme it says is causing more harm than good to retailers and installers.
The Smart Energy Council, which is organising the Thursday morning rally, says Victoria’s solar industry is being “smashed” by the rebate, and is calling for key changes to its design, to prevent widespread job losses and business closures.
But Stan Krpan, the CEO of the entity set up to oversee the Andrews government’s Solar Homes policy, said on Wednesday that Solar Victoria would not be changing the way it was running the program, which re-opened to applications on July 1.
The hugely popular – with consumers, at least – part of the $1.2 billion Solar Homes scheme provides up to $2,225 towards the installation of solar panels; roughly half the cost of a 4kW PV system.
In an interview on RenewEconomy’s Solar Insiders Podcast, Krpan said a number of key changes had been made to the design and management of the rebate before its July re-launch, including the staggered release of just 3,333 applications per month across the 2019/2020 financial year.
Changes to the application process were also made, with a move to a highly digitalised and automated approvals process, and a switch from a cash back rebate system to a point-of-sale model.
As we have reported, the capped number of applications, combined with pent-up demand due to a controversial three-month pause in the scheme from April to the end of June, saw the July allocation exhausted within just days, effectively putting a pause on rebates, again, until August 01.
This has not gone down well with the solar industry – including the Clean Energy Council – which says the drip-feed of allocations is effectively putting a cap on business, and leaving some installers out in the cold.
“Solar installers are at the end of their tether,” said SEC chief John Grimes, in an email ahead of the Thursday rally.
“Many haven’t been paid since April and they’re incurring substantial losses, laying off staff and each day it just gets worse.
“Our demand is simple. Increase the allocations and get these workers back to work,” Grimes said.
The SEC and others have also called for the eligibility criteria for the rooftop rebates to be tightened, both to focus the assistance on lower-income households, and to free up the rest of the market for business as usual.
But Krpan is not keen on either suggestion, and argues it is mostly a matter of industry getting used to a new system.
“(We know) that the pause (in April) to manage the demand-supply equation … has caused some pain,” Krpan told Solar Insiders.
“But we’re really not prepared to have this runaway train, where we (just) open the tap (on applications) until they run out…”
“Obviously …businesses are going to need to adapt to the new program. We’ve been as transparent as we can.”
As for lowering the income threshold for households to be eligible for the rebate, Krpan says the idea that the offer is being snapped up by wealthy people who would have invested in solar anyway is a “myth.”
“Our data indicates under the first part of the program that two-thirds of households that are accessing the rebate earn less than $100,000 a year, and I don’t think for a combined household income that that is at all an exorbitant salary,” he said.
“So that effectively means that you’ve got to reduce from the current maximum of $180,000 to $100,000, so really substantially, to affect that income test, before you make any difference in terms of the elasticity of the demand.
“Twenty per cent of our customers are actually earning less than $20,000. And what we’re hearing from them, the feedback is really overwhelming from those retailers and installers and from those customers is that they would not be in this market.”
Krpan says the rooftop solar installations contributed by the Solar Homes rebate make up somewhere between 50-60 per cent of the state’s entire market – which last year exceeded 50,000 installations, and are headed in that direction again in 2019.
“Before the rebate (annual installations were at) around 36,000. So there’s a substantial uplift which we say is additional, and that is working its way through the market,” he said.
“But as I say, we’re not the entire market. 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.
“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.”
And for those businesses that are not?
“To maximise opportunity, understand the portal,” says Krpan, who notes that Solar Victoria is holding some webinars to help businesses do exactly that.
“No doubt there were some teething issues in those first few days,” he adds. “We know that with the visual ID [a new online system], only about 60 per cent of people were getting through that, so we’ve added some online guidance.
But businesses who are actively supporting their customers through the applications process are much more likely to have their quote approved.
“I do think it is the case of getting used to a new system.”
And, he adds, “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.”