Renewable Energy Target Review Update 24 October 2014

After considering the Renewable Energy Target (RET) Review the Federal government on Wednesday (21 October 2014) finally announced the position they would be pushing to implement, subject to gaining support from opposition parties. The solar industry has been concerned that the small scale renewable energy scheme (SRES), which effectively 'subsidises' roof top solar costs, would be slashed or even eliminated. At this stage it seems the scheme will NOT be changed - good news for residential solar in Adelaide and South Australia. Should the SRES had been cut the, the price of solar installation was set to rise substantially. However, the 'bigger picture' for renewable energy is not as 'rosy'.

REDUCTION IN AMOUNT OF RENEWABLE ENERGY BY 2020

The Federal government on Wednesday announced that their preference, from the RET review, was to cut the amount of renewable energy produced by the year 2020 from 41,000 gigawatt hours to 26,000 gigawatt hours (gigawatt hours is a measure of energy). The 'reasoning' for this was that Australia has actually witnessed a DECREASE in demand for electricity (and the uptake of solar installation is, in part, responsible for the drop in demand for grid supplied power). Therefore the governments option is to 'reset' the renewable energy target (that calls for 20% of electricity production to come from renewable energy sources by the year 2020) based on the CURRENT DEMAND for electricity.

BIG PICTURE AND SOLAR POWER

So, on one hand, we MAY see (depending on the final outcome of discussions between the government and opposition groups) the 'status quo' remaining for the residential solar industry. However for the 'large scale' part of the renewable energy industry, this cut back of the amount of electricity to be generated from renewables is huge. There has been well publicised uncertainty within this sector for the last few months and many large scale solar and wind farm projects have either been scrapped or put on hold. This has had many flow on effects including decreased investment, employment and general impotence within the sector.

We will continue to watch developments and update readers over the coming weeks.