‘Sunshine state’ sees major slump in rooftop solar uptake as industry accuses government of warding off prospective customers by prolonging price uncertainty

This article is more than 5 years old

This article is more than 5 years old

The body for the Australian solar industry has criticised the Queensland government for an “unacceptable” delay in tackling prices for solar energy amid a dramatic slump in new rooftop solar customers.

The Palaszczuk government, which aims to lift the number of homes with solar panels in the “sunshine state” to 1m by 2020, has tasked the state productivity commission with reviewing prices that were cut dramatically by the previous Liberal National government.

But it will not make a ruling on prices until the outcome of the commission’s inquiry, which will assess “public and consumer benefits” of solar power, in mid-2016.

Consumer group Solar Citizens welcomed the inquiry, saying it delivered on Labor’s promise to investigate fair prices after “solar owners were facing attacks by the then Newman government”.

Solar Citizens campaign director Dan Scaysbrook said: “Queensland’s 422,923 solar households have done the right thing by investing in clean energy and making a growing contribution to the state’s electricity grid. It’s now time for this public inquiry to ensure they’re given a fair go.”

But John Grimes, chief executive of the Australian Solar Council, said the government was needlessly prolonging uncertainty around prices and warding off prospective solar customers by waiting until mid-2016.

“The government seems to have good intentions … but they’ve got to understand there are commercial realities and at the end of the day a leisurely review process taking 18 months or more after they were elected is simply unacceptable,” Grimes said.

“I think we’ve just seen too many governments use the review process to kick the can down the road.”

The cut under the Newman government, which saw prices paid by utilities for solar power fed back into the grid drop from 44c a kilowatt hour to 8c, has seen the weekly sales of new panel systems this month sink to a third of the level in 2012.

Queensland, which boasts sites with among the highest sun irradiation levels in the country, also has more solar panels than any state, about a third of Australia’s 1.44m home systems.

But the former government claimed the original 44c rate was too generous because the cost of utilities meeting solar power payments pushed up electricity prices for those without systems.

Grimes said numerous studies and inquiries had previously shown this to be false and utilities were now making large profits by selling solar power back to their customers at retail prices.

Grimes said the industry had taken a “big hit” from price cuts, and prolonged uncertainty was warding off customers.

He welcomed the idea of a “properly resourced” inquiry but said it should report back by the end of the year, with a government moving on prices early in the new year.

Grimes said while the solar council “don’t advocate for a windfall profit for solar customers”, surplus power was being sold to neighbours at full retail rates.

“The power company might have paid 6 to 8c for that power and they’re selling it at 28, 32, 40c,” he said.

“That is simply not fair and it doesn’t take a 12 to 18 month government inquiry to figure that out.”

Grimes said the argument used by the former government that old solar prices meant “poor people were paying for rich people’s solar panels” had been “smashed” most recently by the Warburton inquiry.

A report for that inquiry by ACIL Allen consulting concluded “the more renewables we have on the network, the cheaper electricity prices become”, he said.

The contribution of solar took the load off power infrastructure, delayed or eliminated the need for network upgrades, and pushed down power prices for all network customers at times of peak demand, Grimes said.

He said where the wholesale price of power during the Black Saturday bushfires of 2009 reached $5,000 a megawatt hour, the price during similar climatic conditions in January 2014 peaked at $500/mw hr.

“The one big difference between those events was you had several hundred thousands solar PV systems pushing excess electricity into the grid precisely when electricity prices were the highest,” Grimes said.