Australia to do away with solar credits mechanism

Phase-out of solar credits mechanism.

This will be implemented by the Australian federal government six months ahead of schedule, according to Greg Combet, Minister for Climate Change and Energy Efficiency.

The phase out refers to small-scale, mostly residential, installations, which is effective from January 1, 2013. It comes shortly after the solar credit mechanism was reduced in July this year.

Administered by the Clean Energy Regulator, the legislative arm of the government, Solar Credits are provided in the form of additional tradable certificates called small-scale technology certificates for eligible small-scale renewable energy systems including solar PV systems.

Although the multiplier, which multiplies the number of credits issued for the first 1.5kW of a solar power system, was always designed to reduce over time, the government believes this early phasing out of the multiplier will lower the impact of the “high uptake of solar PV on electricity costs for homes and businesses”.

By 2014, the government estimates that the Solar Credits scheme will cost electricity consumers around 70% less than in 2012. The overall reduction in electricity bills is expected to be US$83 to 103 million in 2013, according to government figures.

The government announcement concluded that the installation of small-scale systems and solar hot water heaters will continue to be supported under the Renewable Energy Target scheme.

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