Victoria’s rooftop solar industry has warned that a pause in applications for the state’s Solar Homes rebate will lead to job losses and failed businesses, as customers wait until July to take advantage of the reintroduction of the 50 per cent discount.
As we reported here earlier this month, the Andrews government’s Solar Homes subsidy has been effectively closed to new applications in the remaining months to July, after the “immense success” of the program saw more than 30,000 households pile in to the scheme before its official launch.
According to a spokesperson from energy minister Lily D’Ambrosio’s office, provisions were made for 24,000 rebates to cover the interim period from when the scheme was announced last August to when it officially opens in July this year, to make sure the industry didn’t come to a complete halt in the meantime.
However, this provisional amount was “easily exceeded” well ahead of July, thus threatening precisely the kind of industry halt the government had been trying to avoid, over the three months from April until July.
And installers and retailers and not happy.
“Because consumers know that the rebate will return on July 1st, they will be holding off on making a purchase; there is no likelihood that sales levels will return to pre-rebate levels in the interim,” says a petition set up on change.org and signed by just under 600 people.
“Many small business now have the prospect of little to no income until next financial year, many of whom put on extra employees to cover the rapid increase in demand that the rebate has generated. For these small businesses to survive 15 weeks without sales is unlikely.”
Other installers have pointed to longer-term consequences of the pause, including lost sales, major supply chain disruption, business closures and a consolidation of market power with big industry players.
“Net result is that phones have stopped ringing, current jobs have to be postponed and some customers are cranky because they have just missed out on the rebate,” said Stephen Ingrouille, principal at decades-old Victorian retailer business, Going Solar, in an email to One Step.
“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,” Ingrouille said.
“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, in an email to One Step.
For many, it is another frustrating example of the double edged sword of government solar subsidisation – when what should be a shot in the arm for an industry has the perverse, short-term effect of “crippling” sales.
Already, under the Solar Victoria scheme, we have seen this play out, when – after the August 2018 announcement of the rebate – customers held off on investment until the detail of the scheme was properly laid out.
“This is classic solar coaster,” industry veteran Nigel Morris told One Step Off The Grid’s Solar Insiders Podcast at the time.
“It was announced on a Sunday, which was kind of funky, and of course, what happens every time there is an announcement about a rebate is every potential solar consumer who thinks they might be able to get a slice of that rebate waits.
“So they stop. They don’t buy, they wait. Because what they’re now waiting for is the free money that’s been promised to them.
“It happens every single time.”
The good news, however, is that the state energy department and Solar Victoria – which say they have been up-front and transparent about how the rebate would be rolled out in the months prior to its official launch in July – appear to be listening to industry concerns, and addressing them in a timely fashion.
A meeting, apparently in response to the change.org petition, was reportedly held on April 18 between D’Ambrosio, top department advisers, Sustainability Victoria, Solar Victoria, DELWP, the Clean Energy Council and industry representatives.
“It is worth noting that the minister came in from her holidays for this meeting so she understands exactly how urgent this is,” a petition update notice says.
An industry representative who attended that meeting described it as “great”, and said the state government was “really keen to find a resolution.”
“We are back there … on Tuesday (April 23) …for more discussions including a way forward in coming years so this does not happen again,” the note says.
This will be all-important, as the state government has flagged that the scheme – which aims to deliver a total of 650,000 new rooftop solar systems on Victorian homes – is most likely going to be capped over the course of its 10-year roll-out.
In the meantime, the petition organisers have called on solar retailers and installers to provide solid data on numbers of rooftop solar clients affected by the rebate pause – “those that have paid deposits, signed contracts or even had their installations done but had not yet applied for the rebate.”
“If you can provided us with any numbers that you’re aware of from your clients, please let us know by email below. Please note that this should not include projected sales opportunities missed; we really need to work with real numbers rather than speculation.”