South Australian solar granted tariff reprieve

The South Australian Parliament’s decision in June to extend the solar feed-in tariff at a lower level for two years is a much-needed reprieve for the local industry, according to Clean Energy Council (CEC) chief executive, Matthew Warren.

Although the transition package is modest and less than what the industry believes is appropriate, it will nevertheless help to reduce the rate of jobs losses that would have otherwise occurred, he said.

“This is important for South Australian consumers and the industry. There’s no doubt the industry is disappointed with the severity of the changes, but we are appreciative the government was open to significantly improving its original legislation,” Mr Warren said.

“Without these amendments there would have been a huge spike in demand for solar after the proposed increase in the feed-in tariff, followed by a big slump when it ended later in this year,” he said.

“This wouldn’t serve consumers or be conducive to industry best practice in South Australia. There are more than 1000 well-trained workers in the industry, which is a significant part of the local economy.

“However, there should be no misunderstanding about the serious impact this legislation will have on the economic viability of many solar installer companies. Much of the South Australian solar industry is made up of small businesses. While some will find ways to adjust to the lower levels of support, many will not.”

The CEC is hopeful the door will remain open to improve the package at a later date. It offered alternative models, which would have both significantly reduced the overall cost to South Australian households and more effectively smoothed out the process of rolling back the feed-in tariff.

The CEC said the medium-term outlook for the solar industry remains positive, with the costs of solar technology continuing to fall rapidly. They said grid parity is likely to be achieved in three-to-five years.