Yesterday the Abbot government ordered the Clean Energy Finance Council to direct investment away from established technologies and projects involving wind and household solar. The idea being that the fund begins to focus on new and unestablished technologies (wave, tidal, geothermal etc).
What is the CEFC?
The Clean Energy Finance Corporation was established to mobilise capital investment in clean energy projects, energy efficiency technologies and other forms of clean tech from an allocated $10 billion fund (tax payers money) established by the previous Labor government. It is a completely separate entity to the Clean Energy Council, Clean Energy Regulator and although contributes towards the Renewable Energy Target indirectly, it has little to no influence on the actual target.
Will any rebates or subsidies be slashed?
In short, no. The CEFC invests in projects, it does not legislate on policy so this decision from the government, while not beneficial, will not see STC or LGC rebates slashed or removed. We have recently seen legislation pass through parliament that resulted in the Renewable Energy Target revised down form its original target and along with it came a five year certainty that nothing will shift again. Subsidies for consumers in the form of Small and Large Scale Technology Certificates (STCs / LGCs) will continue as normal.
What this means for the Solar Industry
The announcement isn’t great from a view of demand. The media looking to grab headlines with statements such as ‘Government pulls the pin on rooftop solar’ doesn’t help the situation, as consumer confidence in Solar may suffer in the short term. This however could have an adverse affect on a lot of business as direct divestment from the government frees the market up for smaller players to capitalise on demand. An example comes from the $100 million Origin Energy was awarded to invest in its new rooftop solar campaign – a loss for Origin that could have a positive impact on the smaller players in the market who find themselves competing constantly with the Energy giant.
It’s no secret that this government has an agenda to steer the market away from Renewable Energy. This announcement comes after their failure to revise down the RET more than what eventuated. If anything the media hype surrounding the announcement will be bigger than the impact on the market, provided clients and consumers are educated properly. Expect a lot of head scratching and queries about ‘what this all means?’ from customers in the days to come.