ACCC Still Wants Early Axing Of Solar Rebate

ACC and the solar rebate

Image: markusspiske

The Australian Competition & Consumer Commission appears to be continuing in its advocacy for an end to Australia’s solar rebate sooner rather than later.

The ACCC’s latest report from its inquiry into the National Electricity Market (NEM) was released yesterday. It notes while the average annual electricity bill for households in the NEM fell by $65 or 4 per cent in 2018–19 compared with the previous year, households were still paying approximately 20 per cent more than in 2007–08 and the average cost per kilowatt-hour was around 45 per cent higher in real terms.

The ACCC claims environmental costs have been the biggest driving factor behind the increase in average household bills over the longer term. While focusing primarily on the cost of legacy premium feed-in tariffs this time around, in his comments on the report ACCC Chair Rod Sims also said:

“We continue to seek action on our previous recommendations, which we believe will help drive bills down.”

These recommendations were released in July 2018. Among them was:

“.. the ACCC is recommending that the SRES should be wound down and abolished by 2021 to reduce its impact on retail prices paid by consumers (recommendation 24).”

The SRES is the Small-scale Renewable Energy Scheme. It’s the initiative that provides for Australia’s major solar subsidy, aka the solar rebate. The solar rebate is already being gradually phased out and will cease to exist at the end of 2030.

Solar Rebate Cost Vs. Benefit

So how much is the SRES actually costing households? A graph on page 64 of the report indicates it has averaged out at less than 1 cent per kilowatt hour.

While the cost has increased according to ACCC figures due to rapid uptake of home solar, among the many benefits that <1c per kWh has bought are:

  • Thousands of jobs
  • Downwards pressure on wholesale electricity prices
  • Emissions reduction

The value of the SRES also needs to considered, and that’s something the ACCC report doesn’t do. The SRES is still a pretty good deal – not just for owners of solar power systems, but for everyone.

Will The ACCC Get Its Wish?

In October 2018, Energy Minister Angus Taylor said there was “no plan” to change the SRES  and reportedly reiterated the Morrison Government had no intention of abandoning it in March this year.

While politicians have been known to backflip on one or two occasions, given the popularity of the subsidy, the benefits it brings and the fact it is already being phased out, it would be a pretty silly move at this stage to try and accelerate its end.

Leave a Reply

Your email address will not be published. Required fields are marked *