Solar Power On It’s Way!

We received an email last night from Earth Utility confirming our order for a 1 kW solar power system. They also phoned today to make sure we were kept informed. I’m really happy with their service so far.

**WARNING:** Earth Utility appears to be in trouble (updated 28-04-2010).

Now it’s just a matter of waiting for the government to approve our rebate application – which could take up to 12 weeks! Sheesh.

On a related note, the government yesterday announced that they were replacing the old means-tested solar rebate scheme with a new, non-means-tested credit scheme (see coverage by [ABC](http://www.abc.net.au/pm/content/2008/s2449511.htm) and [Energy Matters](http://www.energymatters.com.au/index.php?main_page=news_article&article_id=252)).

Personally, I think the new scheme is dodgy in several ways.

1. It’s basically a 5x multiplier for your RECs. So if you sell your RECs, you’re basically selling a polluter the right to generate 5 times as much pollution as your solar panels are actually offsetting. Not only did the government let us down with a [very weak 5% carbon emissions target](http://www.energymatters.com.au/index.php?main_page=news_article&article_id=250&zenid=1c59daa919dfd7fea640fb3c2dcadcb8), but now it looks like even that level will only be achieved by fiddling the books. Boo to Rudd.

2. The scheme means that people in the southern states of Australia will get less rebate than those in the north, due to their lower sunshine levels. So when the government says it’s worth “up to $7,500”, that’s really only if you live in the far north of Australia. It’ll be considerably less if you’re in Sydney, Melbourne, or (heaven forbid!) Hobart.

3. The credit multiplier gets reduced every year until it’s fully phased out by 2016. There’s no mention of whether any further incentives will then be offered for solar installations.

4. It appears to only address solar power and not other forms of renewable energy. Wind, micro-hydro and others should have incentive schemes as well.

5. There is still no word on any kind of federal feed in tariff programme. Giving people a guaranteed buy-price premium for the renewable energy they feed into the grid would provide a huge ongoing economic benefit that would encourage more home solar takeup.

6. The price of RECs depends on supply and demand. If lots of solar systems get installed, and they all get 5x the RECs they should, then supply of RECs will exceed demand and the price will drop. So effectively, the purchaser will get less subsidy than what the scheme is currently suggesting they’ll get. So that promised “up to $7,500” shrinks some more.

7. The old rebate topped out at $8,000 for a 1 kW system. To get the full “up to $7,500” in the new scheme, you’ll need to install a 1.5 kW system, which will cost you about $4,500 more than a 1 kW system.

You’d think that with all the money they’re throwing around in the pre-Christmas “economic stimulus package”, the government could have made a stronger, not weaker, renewable energy incentive scheme.

If you’ve been thinking about installing solar power, it looks like you have until June to get it in under the old rebate system. On the other hand, if your household income exceeds the $100,000 limit of the current means test, hold off until July and you’ll be able to take advantage of the new system (hey, it’s better than nothing).

What do you think? Is the new system a let-down?

UPDATE: LocalPower have posted a great article summarising [SHCP Rebates vs 5xRECs](http://localpower.net.au/5recs.htm).