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Legislative Assembly for the ACT: 2003 Week 2 Hansard (6 March) . . Page.. 600 ..

MR STANHOPE (Chief Minister, Attorney-General, Minister for Community Affairs and Minister for the Environment) (10.42): Mr Speaker, this motion raises an important issue in relation to the federal government's commitment to reducing greenhouse gas emissions, and this government is happy to support it.

Photovoltaic systems generate electricity directly from the sun with no greenhouse gas emissions. They can be used as stand-alone systems with battery back-up in remote areas, or as grid-connected systems in urban areas. Photovoltaic systems are a commendable development in the use of alternative energy sources for electricity generation.

However, a number of issues have been recognised at this stage in relation to them-namely, the industry is still in a developmental phase and economies of scale are not in place. Consequently, PVs are expensive, there is a long cost recovery period and installations are generally undertaken on environmental rather than economic grounds. A rebate scheme is biased towards the upper socio-economic group in urban areas because of the cost involved and, in cost-benefit terms, the national Photovoltaic Rebate Program is an expensive greenhouse gas reduction measure.

Having said that, and noting that PVs are expensive-I think Mrs Dunne averred this-there is a relatively long cost recovery period. It costs between $20,000 and $30,000 to install a domestic PV system, and it takes approximately 25 years to pay back the PV system through energy savings.

While the attractions are therefore limited in urban situations in economic terms it can be a sound proposition in remote rural areas where a grid connection can involve a similar cost. PV systems are attractive on environmental grounds, as they generate no greenhouse gas emissions when operating in solar mode.

In the year 2000 the Commonwealth initiated a four-year national Photovoltaic Rebate Program to subsidise the cost of installing PV systems in homes and community-use buildings. The program offers a rebate of up to $7,500 for householders and up to $10,000 for community-use buildings. It is to be noted that the ACT government and the Master Builders Association are signatories to an agreement with the Commonwealth to administer the national Photovoltaic Rebate Program here in the ACT.

Participation in the program has been low in the ACT, with only 21 installations to date, including the Campbell High School. In other states there has been more scope for the installation of off-grid systems in rural areas, and the uptake has been much higher.

As Mrs Dunne indicated, the Commonwealth advised in February 2003 that the budget for the program is under stress and that a monthly cap of $7,500 has been placed on subsidies to the ACT. Of course, a cap at $7,500 would allow for one domestic installation subsidy per month, but that equates to the current demand for the rebate scheme here in the ACT in any event.

Abandonment of the national Photovoltaic Rebate Program by the Commonwealth would, however, be a serious and retrograde step. The Commonwealth has a very important leadership role to advance Australia's fledgling solar energy industry. Our

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