On Tuesday, the Prime Minister confirmed the implementation of the ACCC recommendation to scrap the Small Scale Renewable Energy Scheme (SRES) and “has not ruled out immediately scrapping the scheme”, according to a press release issued by John Grimes from the Smart Energy Council.
The SRES acts as an incentive for organisations to install solar systems of 100kW and under, through the issuance of small-scale technology certificates to system owners. Liable entities are obligated to purchase these certificates and present them to the Clean Energy Regulator.
The scrapping of the SRES could lead to an increase of around 30% in the cost of commercial solar PV. With many commercial energy users turning to solar in order to curb rising electricity prices, the change is likely to have an impact on its short-term viability.
Motivations behind the changes
The ACCC has stated the aims of its recommendations are to boost generation and competition, lower network costs, and enhance consumer and business outcomes. However with sources including ARENA citing renewable energy as affecting only one sixth of the electricity price increase, and other sources claiming the SRES only adds around 1% to household bills, the motives behind its abandonment are not entirely clear.
The budget announcement earlier this year specified no money would be allocated for new coal-fired power stations. This combined with no clear commitment to emission reduction regulation and removal of incentives for the solar industry will potentially create a deficit in the supply of energy under the National Energy Guarantee. If demand continues to outstrip supply, electricity consumers could see price increases carry on into the future.
Furthermore, the Clean Energy Council has condemned the premature ending of the SRES on the basis that the ACCC may have overlooked its value in regard to regulating industry standards. Chief Executive Kane Thornton explains that “the solar industry is regulated through an accreditation scheme that is linked to SRES through legislation”, making the scheme “instrumental at maintaining high safety and quality standards during a decade of massive growth”.
Commercial solar continues to thrive
Despite policy uncertainty delivered under recent governance, the solar industry continues to flourish. Last year saw a record number of commercial solar PV capacity installed, and over 4 GW of commercial PV is predicted for 2018, tripling that of 2017.
Image source: Green Energy Trading
Todae Solar has experienced an unprecedented volume of orders over the past few months alone, including Australian Vintage, who recently committed to their sixth project – a 100 kW system in Pokolbin NSW, and many SME’ s including Pathways Aged Care, Hillside Meat and a 100 kW system in far North Queensland. This is a clear indication that organisations are positive about the ability to recoup solar investment costs despite policy uncertainty post 2020.
John Grimes’ announcement should not be taken lightly given the axing of legislation at short notice in the past, so if you are considering projects of 100kW and under, enquire today to ensure you make the most of the remaining years in which the SRES can be guaranteed.