Household solar subsidies should be abolished

Lucy Percival over at the Grattan Insitute has written a great article on the recently released report by the ACCC.

Key takeaways:

• The small-scale renewable energy scheme (SRES) should be abolished by 2021
• State governments to fund solar feed-in tariffs through their budgets, rather than through consumers’ energy bills, improving fairness
• Solar schemes were well-intentioned but misguided, failing to adapt to changing economics and higher than expected uptake
• Disadvantage lower-income households

Few people understand how solar subsidies work:

"In most states, premium feed-in tariffs and rooftop solar subsidies are funded through higher bills for all consumers. Everyone pays the costs, yet only those with panels receive the benefits. That means the costs fall disproportionately on lower-income households and those who rent rather than own their home."

Even if you don't have solar on your own roof, you're paying for your neighbour's systems! That's inherently unfair.

The ACCC report recommends the following fix:

• Adapt to change. Provide a flexible framework to direct energy policy towards a low-emission, high-reliability, low-cost future.
• Be technology-agnostic and minimises government intervention. This encourages the market to find the most cost-effective way to reduce emissions and ensure reliability.
• Simplifying retail electricity offers, which would make it easier for consumers to find a good deal, and in turn, making the market more competitive.

Lucy points out that:

"Politicians have an opportunity to draw a line in the sand on narrow, technology-specific policies such the SRES. An integrated energy and climate policy should focus on good design, and then step back and let the market pick the winners."

We couldn't agree more.

To restore reliability and affordability to our energy market, subsidies need to be removed and technologies need to compete on their own merits.

If wind and solar with battery storage are cheaper than coal, as many claim, then this shouldn't be a problem.

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