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End to Solar Rebate PDF Print E-mail
Tuesday, 16 June 2009 10:28

The federal government's solar photovoltaic (electricity) rebate came to a sudden end with an announcement on June 9th - there was no notice, and this was the first that the companies working to sell Solar PV knew.

Of course, the writing was on the wall, the government had announced the system would be brought to an end, but had promised to keep it going until the expanded Solar Credits (RECS multiplier) scheme came into effect, which was expected around August or September

I haven't seen the official figures, however, I understand that in May there were 30,000 applications for the rebate, that is $240 million in one month for a scheme budgeted at $150m per year, over 5 years!

Eighteen months ago, (November 2007) we launched Beyond Building Energy, with a product priced at $499 (after rebates and RECS), when most competitors were priced at about $5,000. We did this by engineering the business model to a model based on volume.

When putting the model together I believed that there was a market for green products IF the price was right, i.e. the pent-up demand to live a sustainable life is there, but people believe they can't afford to. The demand proved that, in my street 50% of the houses installed solar, in the nearest town (Mullumbimby) it was 10%.

I guessed BBE had up to a year's lead. The rest of the industry said BBE couldn't possibly be able to supply at that rate - but gradually they came around to believe it was possible, and then to copy it. Which is how so many systems were sold last month. In that last month the systems were being sold by several companies (including BBE) for as low as zero, so of course there was no limit to demand.

What now?

The rebate has been replaced by a solar credit scheme, which gives 5x the number of RECS, this works out at about $5,000 for a 1Kw system in this area, but bigger systems are also supported. There are problems with the model, firstly the total support is $4,000 per kw less than currently, and secondly that the RECS price fluctuates, so with the multiplier it could mean a substantial difference in out-of-pocket cost between application and installation. The good thing is that the wait - often a couple of months for DEWHA to first approve the application, and then another delay after installation should be one, since companies can create the RECS themselves.

Each of the competitors is likely to announce new pricing soon. I heard BBE announce on the local radio that they would now supply a 1.5kw system for about $2,500. At current electricity rates this should repay in about 7 years, so its still a good deal, though not as good as before. I don't know if that will be the final price, and there isn't one on BBE's website. The only competitor I've seen pricing for is Rezeko who are pricing at from $2,999 for 1kw. I haven't seen prices on any of the competitors sites yet (e.g. Nickel or AusEnergy)