Energy and environment groups have welcomed the announcement by the Government that it will lift the moratorium on solar power projects that had been in place since January, as it comes amid a boom in the industry.
But they have warned that a blanket ban on solar installations, which will continue until 2030, will leave many vulnerable and could drive up costs.
“It is a welcome move by the Federal Government and the Australian Solar Council (ASC), but it is also a significant milestone,” said Matt Parry, the executive director of the Solar Energy Industries Association (SEIA).
“While the moratorium was lifted for the first time in September 2017, the introduction of the Clean Energy Target will see more solar installations in Australia than ever before in 2030.”
Solar power is one of the fastest growing sectors of the Australian economy and employs around 25,000 people in the country.
The Government’s move comes after the US Department of Energy and Environment (DeE) released its latest Energy Information (EIA) for the year to March, which showed solar installations rose by 8.4 per cent year-on-year to 1.1 gigawatts (GW).
Solar installations in 2020 grew by an impressive 8.7 per cent, while coal and gas were down 3.5 per cent.
But the figures don’t tell the whole story.
Solar energy accounted for just 0.5pc of the electricity produced in Australia in 2019.
Solar energy accounts for a tiny slice of the energy market.
In Australia, it accounts for around 1.5% of the total energy supply and 5.2 per cent of total electricity consumption.
In the US, solar installations accounted for 4.4pc of total US electricity generation in 2019, while in Australia it was 1.9pc.
In a statement to News24, the Department of Finance said the move would help meet the goals of the 2020 Australian Renewable Energy Target (ARET), and reduce the cost of electricity for Australians.
“The Clean Energy Technology Fund will support solar, wind, and hydro power, and support solar thermal, solar PV, and wind energy deployment,” the statement said.
“Under the Clean Renewable Technology Fund, solar, energy efficiency, solar photovoltaic, and biomass are all eligible for the fund, and the fund will help support projects in this sector, while also supporting projects in other areas such as renewable energy infrastructure and carbon capture and storage.”
This is important because in the short term, renewable energy deployment may increase, but over time, we need to consider the long-term impact of this investment in renewable energy on our energy system and our climate change efforts.
“As this is a Government funded project, the Government has committed to provide funding to eligible projects through the Clean Technology Fund to the highest-performing projects.”
Solar panels at a solar power installation in the Northern Territory.
Source: Getty ImagesThe Department of Industry and Energy also said the Government would continue to support renewable energy initiatives, including onshore wind farms.
“Solar is the fastest-growing renewable energy technology in Australia and this Government will continue to provide support for projects in the offshore wind sector, as well as for solar thermal and onshore hydro projects,” it said.
The Renewable Heat Incentive (RHI) scheme is also part of the new deal.
Under the RHI, eligible projects receive $10 per megawatt hour (MWh) for every $100MW of renewable energy they generate.
“Renewable energy is the cheapest form of energy that can be produced in the market, and in this climate change world, that’s important,” Mr Parry said.
Solar panels installed on the roof of a house in the northern Australian city of Alice Springs.
According to the Department, the total renewable energy in Australia last year was 1,073MW, or around a quarter of the global total of 1,639MW.
The EIA for the past 12 months shows solar PV installations in 2018 rose by just 1.3 per cent to 1,764MW.
But in the past six months, the average cost of solar PV has risen by 22.6 per cent in Australia, from $1,766 to $2,851.
Mr Parry is also concerned about the impact of the solar industry on other industries.
“There’s a real concern in the renewable energy sector about the impacts on the economy,” he said.
“Solar is a very small part of our energy mix, so it’s going to be a challenge for the renewable industry to maintain that position in the global energy market.”
The Department’s latest EIA also shows that the number of residential solar installations fell in 2017 to 717MW, down from 933MW in 2016.
Solar panels on a house at the Alice Springs Solar Centre.
“It’s important that we continue to build capacity and provide funding for those installations,” he added.
“I think the Australian