Gradual reform for solar subsidies needed, says MEA

Master Electricians Australia (MEA) has backed calls for gradual reform of domestic power subsidies, confirming the Queensland Competition Authority’s view that individual panels were driving up network costs for other users.

MEA Chief Executive Malcolm Richards criticised the Clean Energy Council for its refusal to acknowledge the true cost of solar panels for all power users.

“It is critical for both businesses and consumers that we build a solar energy industry that is viable in the long term - an industry which can provide high-level energy conservation advice and install a full range of products,” Richards said.

“In order to do that, we need a clear-eyed understanding of how much energy is needed, when it is needed and how much it truly costs to meet those peak demand levels.

“While Master Electricians have benefited from the boom in solar panel installations, we also acknowledge that there has been a cost to all power users. We need to address that cost honestly in order to secure the future of this industry.”

The government has a responsibility to provide a network capable of supplying power at peak demand times, Richards said. The cost of providing energy at peak times is passed on to consumers, but Richards said this disproportionately affects people without the capacity to generate their own power at home.

“So it’s indisputable that home owners without solar power are carrying a greater share of the cost of providing the network demanded by all users when the sun is not shining,” Richards said.

MEA is not advocating sudden changes to subsidy arrangements, particularly where people have invested in solar based on existing policies and rules, said Richards, but a frank public debate about costs and subsidies is needed to inform policy longer term.

“Both home owners and businesses need a ‘no surprises’ approach to their investments in solar power, so we would not want to see a sudden, unexpected change in pricing arrangements. But we do need to acknowledge that the current arrangement is not sustainable over the long term,” Richards said.

“Government could also reduce future network costs by encouraging greater use of off-peak power, which would flatten the demand curve and decrease network capacity needed for just one or two hours each day.

“We continue to encourage the Queensland Competition Authority and the state government to freeze tariffs for off-peak power and pass on all the extra network costs through the peak tariff. This is the only certain way of applying the additional costs associated with peak demand to those consumers who use that power.”