Page 3020 - Week 07 - Thursday, 30 June 2011
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MR CORBELL (Molonglo—Attorney-General, Minister for the Environment and Sustainable Development, Minister for Territory and Municipal Services and Minister for Police and Emergency Services) (3.36): The government will not be supporting this bill, proposed by Mr Rattenbury, today in relation to the ACT electricity feed-in tariff legislation. I acknowledge that the approach is well intended but it can only be described as a simplistic solution to a complex problem in which there will more long-term losers than short-term winners and at the end no increased certainty for local industry.
Let me explain and provide some further background.
MADAM ASSISTANT SPEAKER (Mrs Dunne): Before you do, Mr Corbell, I am sorry I cannot hear you because Mr Hargreaves and the Chief Minister are having a chat. So if they could keep it down. Thank you. Mr Corbell.
MR CORBELL: Thank you, Madam Assistant Speaker. The closure of the micro category of the feed-in tariff scheme arose from the unfortunate coincidence of two market situations. The first was the decision by the commonwealth government to fast-track its previously announced reductions in the subsidy paid under the solar credit scheme. Last December the commonwealth announced that the multiplier applied to its renewable energy credits would reduce from five to four from 1 July 2011, with further reductions amounting to $1,200 from 1 July each year until 2014. However, on 5 May this year the commonwealth revised this schedule to provide for the 2011 reduction to be by a further $1,200, with the overall effect of closing the entire program a year earlier, in 2013.
The effect of this announcement was an additional increase in upfront costs for a PV system of around $2,400 per household and businesses installing renewable generators. For an average-sized system of around 2.5 kilowatts, this was about a 70 per cent increase in the cash payment to install a PV system. Consumer concern over this development was fuelled by heavy and aggressive industry marketing along the lines of “don’t miss out” and “get in now before the price rise”.
Further consumer uncertainty was created by the failure of some interstate base providers to clearly explain to customers the differences between the commonwealth deadline and the ACT electricity feed-in scheme. Perceptions were created that equated maximum benefit with lodging applications for both programs before 1 July this year. Members no doubt recall the heavy advertising campaigns that pushed the deadline aspect. In one local paper alone my directorate counted seven separate advertisements, and this was matched by TV and radio campaigns as well as direct marketing at shopping centres and drops to home mailboxes.
The second contributing factor which drove a massive increase in take-up was the closure of the New South Wales feed-in tariff and the fear and general and widespread uncertainty created by the announced retrospective tariff cuts, which have since been withdrawn, by the New South Wales Liberal government. This also meant significant supplies of solar generation equipment found itself excluded from its intended market and sellers needing to find a new market. As a result, heavily discounted systems were offered in the remaining market, the ACT. While some consumers did very well out of this arrangement, the overall result was to overheat an already expanding market.
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