Commercial Solar Power Projects win reprieve from government review

Climate change minister Greg Combet has announced that the government will accept the vast bulk of the recommendations from the Climate Change Authority including keeping the large-scale target fixed at 41,000 gigawatt-hours.

The key elements of the government’s response probably of most concern to the renewable energy sector are:

No change to large-scale target

The government will not alter the large-scale renewable energy target, keeping it at the current 41,000GWh by 2020.

No change to 100kW size threshold for SRES

Contrary to the recommendation of the CCA, the government will not change the 100kW threshold below which solar PV systems qualify for the Small-scale Renewable Energy Scheme (SRES). This will come as welcome news to those engaged in selling solar PV for commercial business rooftops, which commonly exceed 10 kW (the threshold recommended by the CCA), meaning they will continue to be able to create certificates (STCs) upfront for generation over the system’s life.

This allows renewable energy certificate revenue to be realised immediately, which is very important in selling systems to clients who commonly require very short payback times as electricity generation is not core-business.

It is this part of the government’s decision which is most welcomed by Solar Wholesalers as we see great demand for commercial solar power systems from businesses whos’ power prices have risen dramatically in recent years

Deeming period for solar to reduce over time

Consistent with the CCA recommendation, the length of time over which certificates can be deemed upfront for small-scale systems will be changed such that generation beyond 2030 will not be rewarded with certificates. This phase-out will take place commencing in 2017.

Reviews of RET to be pushed out to every four years instead of two

Consistent with the CCA recommendation, the time period between reviews of the Renewable Energy Target will be extended to four years instead of every two years. If this manages to pass the parliament it would reduce the degree of uncertainty about whether the settings could be changed for the RET.

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