Victoria defends success of Solar Homes program, after scathing auditor report

The Victorian Auditor General’s Office has delivered a scathing assessment of the Victorian government’s Solar Homes program, saying the Victorian state government had undertaken inadequate planning for the scheme that could have avoided many of the problems that plagued its early stages.

The Victorian Auditor General’s Office has published its report into the $1.3 billion Victorian Solar Homes Program, which continues to provide financial support for Victorians to install rooftop solar, battery storage and solar hot water systems. The rebate was recently also extended to electric vehicles.

The program first launched in April 2019, and was overwhelmed by demand in its early stages, leading to a suspension of the program and an urgent redesign.

The report highlighted the difficulties that the Solar Homes program encountered soon after its launch, which saw the program massively oversubscribed and households struggling to secure rebates when monthly allocations were insufficient to meet demand.

Monthly allocations of rebates under the program were often exhausted within a matter of hours in the early months of the scheme, leaving both installers and potential customers frustrated by their inability to secure the financial support on offer.

The Victorian Auditor General’s Office attributed some of the blame for the teething problems to a lack of adequate planning on the part of the Victorian government, saying that the troubles may have been avoided had the government fully appreciated the risks to the program and undertaken adequate planning.

“This meant that government lacked sound and comprehensive information to consider the merits of the program,” the auditor’s report says. ” Program planning was deficient in as much as it failed to fully appreciate and effectively mitigate obvious risks of excess demand, market reliance and grid capacity.”

The auditor’s report also suggested that the design of the Solar Homes program had not considered the potential impact on the wider grid of increasing the penetration of rooftop solar, particularly in areas of already congested networks.

The auditor’s report suggested that the cost of necessary network upgrades, as much as $320 million, may diminish the financial benefits achieved by the program, and the Solar Homes program had not adequately mitigated against this risk.

In delivering its assessment, the Victorian Auditor General also criticised the program’s administrators, Solar Victoria, for its lack of evaluation processes that would have assessed the effectiveness of the Solar Homes program.

“Solar Vic is not yet able to report to what extent it has reduced consumers’ power bills and carbon emissions through this $1.3 billion investment,” the auditor general report says.

Solar Victoria has undertaken a pilot study of a small number of scheme participants to estimate the financial benefits of having solar installed under the program, that estimated that the average household was saving $1,073 annually through reduced electricity bills.

But the Victorian Auditor General said that the estimate – which had been based on approximations of reduced electricity purchases – was not an accurate measure and suggested the assessment should have used actual electricity bills.

Speaking to media following the release of the report, Victorian energy minister Lily D’Ambrosio defended the Solar Homes program, saying it had been an overall success and the state government was confident that it had delivered substantial benefits to Victorian households.

“The rollout has been absolutely successful right now. And we have 140,000 Victorians who are enjoying the benefits of having a solar panels on their roof, saving significant dollars. So in fact, they’re actually saving more than what we expected,” D’Ambrosio said.

“Victoria’s uptake of solar PV has actually been faster than any other state and that’s because of our program making it so much easier for Victoria to save on their power bills, reduce their carbon emissions and be able to free up dollars that they can spend for other important family needs.”

D’Ambrosio added that the Victorian government had been responsive to the early teething problems with the scheme, and had already implemented changes to the Solar Homes program to address the roll out challenges.

“We dealt with that very, very quickly in the first stages of the rollout and in a way, this marks how successful the program was,” D’Ambrosio said.

“Once we understood that the demand for the program was really overwhelming, we ensured that we provided extra funds and more rebates to meet demand. The program is working so well now we’ve also got fantastic ongoing engagement with the industry and consumers.

“We can see that we’re actually improving a lot of the standards for the rest of the country in terms of the safety and the standards for solar panels on people’s roofs,” D’Ambrosio added.