Victoria solar rebate feels the heat, as August quota filled within two hours

Concerns that the Victorian government’s rooftop solar rebate is effectively strangling the market in the state have been reinforced, with the monthly allocation for discounted PV exhausted within hours on Thursday morning.

After opening at 9am, the August allotment of 3,767 solar panel rebates was completely filled within just two hours, showing zero available by 11am.

This makes the August rate of uptake even faster than it was in July – the first month of the new-look scheme, which saw a total of 3,333 rebates snapped up within three days.

And while this underscores the popularity of the policy with consumers, it also confirms industry concerns that the design of the scheme is causing a stop-start effect that will have a disastrous impact on jobs and businesses.

As we reported here yesterday, the launch of the August allotment had been dubbed “D-Day” for the PV industry in Victoria, when the “scale and size of the solar rebate disaster” would be confirmed.

The Smart Energy Council, which last week led a public protest outside state parliament, said businesses were being forced to lay off staff, and some had closed down – with other set to follow if urgent changes to the scheme were not made.

“We (have) heard incredibly distressing stories of people who don’t know how they’re going to survive. Business owners were in tears as they recounted their attempts to navigate the system,” said SEC chief John Grimes.

“Solar businesses should not be forced to suffer this much pain, wear incredible costs, and push workers out into the cold, just because the government can’t manage a basic scheme.

“Victorians wants lower power costs. They support this scheme, but we all just want it to work. And right now, we’re a long way from that.”

The SEC and its members have repeatedly called for urgent changes to be made to the design of the scheme, including a tightening of the eligibility criteria, to free up more of the market to continue functioning under business as usual.

Namely, they have argued that the combined income threshold for households – currently capped at $180,000 a year – should be halved, to focus the scheme’s benefits more closely on low-income families.

In comments on Thursday, Grimes said the quick sell-out was bad news for most consumers too, who would now be forced to wait another month to see if they were able to access a rebate.

“You are more likely to encounter a unicorn in Victoria today, than meet someone who was successful in securing a rebate”, Grimes said in an emailed statement.

“Because there are so few rebates, and such high demand, we estimate that around 90 per cent of customers who had accepted a quote, and are eligible, missed out.

“And that does not count the thousands of Victorian households who want to access the scheme to slash their power bills.”

But the state government is holding fast on the design of the $2,225 cash-back rebate which, for the first financial year, will year release a strict quota of a few thousand rebates for application each month.

In an interview with Giles Parkinson on Wednesday, Victorian energy minister Lily D’Ambrosio stressed there would be no changes made to the current design of the rebate, which she said was “absolutely getting the results” intended.

“More people have been able to make a decision to buy solar panels to save money – people that otherwise would not have invested, because they didn’t have the upfront cost to actually enter the market,” D’Ambrosio said on the sidelines of the conference.

“So the market is being expanded as a result of our rebate program.”

“We shouldn’t be confusing the number of rebates that are released monthly by the government with the opportunities in the market for the industry,” she added.

“There is a significant market outside of the rebate program, including people who earn more than $180,000 a year (combined income) and the commercial-industrial sector, which is growing every day.

“There are significant opportunities for the market that are outside of that rebate program. So the notion that, somehow, there is a cap is incorrect,” D’Ambrosio told One Step.

“At the same time, we will continue to work with industry, have the conversations about how we can make it easier for them to make the adjustments, and to also look at helping them to diversify opportunities… to gain share of the market that sits outside of the rebate program.”

Meanwhile, the data tells its own story. According to the below chart put together by market analysts SunWiz, Victoria’s residential installs have indeed hit a wall.*

And pressure is mounting for the government to take some sort of action, including from the Clean Energy Council.

“People are holding off installing solar altogether until they can claim the rebates. It means the state’s solar industry is being turned on and off like a tap – and for the whole of August the tap was only on for a couple of hours,” said the CEC’s director of distributed energy, Darren Galdman, in a statement on Thursday.

“Government programs should not be like trying to buy concert tickets, where access depends on whether you can get through in the few hours that it is open.

“The intention of the program was welcome, but the way it is being rolled out is turning into a worst-case scenario for the state’s solar industry. This is obviously the opposite of what was intended,” he said.

“The industry has put forward a range of options to improve Solar Homes, but the first step to fixing it is a recognition that there is a problem. We are calling on Victorian Premier Daniel Andrews to urgently intervene and lead a review to revisit the criteria for the program.”

*The SunWiz chart has been updated. Earlier version had included only the first 24 days of July in its data, and therefore showed an accentuated slowdown.