Government shocks industry by cutting solar hot water rebate early

The Government dealt the solar hot water sector another blow yesterday after it announced without warning the Renewable Energy Bonus Scheme would close earlier than expected, enraging major manufacturers.

However, mid-sized hot water installer Apricus says the decision is actually a good sign the Government intends to ban any more new installations of electric hot water systems.

“Is this a bad thing? No, I don’t think it is,” Apricus chief executive Chris Taylor told SmartCompany this morning.

“I don’t believe the Government can in good faith continue to give subsidies to people when legislation is pending that could make electric systems obsolete.”

Parliamentary Secretary for Climate Change Mark Dreyfus released a statement yesterday saying the rebate scheme would finish at 5pm, and that the Renewable Energy Bonus Scheme would still close on June 30, 2012.

In order for customers to be eligible for rebates under the REBS, they must have had the system installed, purchased or ordered with a deposit paid before or on February 28. For systems installed before yesterday, the application must reach the Department of Climate Change within 122 days after installation.

If an order has been purchased up to February but installed afterwards, applications must reach the Department by June 30. Any systems ordered from now on are not eligible, and any applications received after June 30 are not eligible.

The solar industry has been battered around by the Government for years, with tariffs and subsidies changing every few months. Several businesses have collapsed over the past two years, and many more are on the brink.

Some businesses have come out saying the decision effectively ruins the money they’ve put into ordering stock. Rheem Australia head of government relations Gareth Jennings told the Australian Financial Review the company had been lobbying to extend the rebate beyond June.

“We now have around $10 million of our stock we have to move, and we have between 300 and 400 Australians employed making these solar hot water systems, and many more upstream.”

But Apricus’ Chris Taylor says this latest decision isn’t necessarily a bad one, saying he believes the Government is currently working on a plan to phase out electrical systems – a move that will be better for the industry.

“Am I disappointed in the way the Government has done what it did? Yes, I’m disappointed because the whole approach to energy efficiency has been one of mismanagement.”

“All the programs they’ve run have been mismanaged not only in terms of funding, but in terms of people investing millions in infrastructure, and then finding out suddenly it’s not worth anything.”

Despite that disappoint, Taylor says the decision won’t kill solar hot water.

“I don’t think this will impact on sales. There are already other programs available, including the small-scale technology programs, and there is plenty of business around.”

“My biggest disappointment would be that the Greens didn’t use their power to ensure the program would be better managed.”

However, Greens senator Christine Milne said in a statement the Government had let the industry down by not extending the scheme.

“The Government likes to talk about transforming Australia for a clean energy future, and yet today they have dumped a key scheme supporting solar hot water manufacturing,” she said.