Solar sector furious after Gillard robs industry to fund new cash-for-clunkers deal

The solar industry is fuming after the Government announced it will strip $220 million from the Solar Flagship program in order to promote a new Cash for Clunkers deal to get more than 200,000 pre-1995 cars off the roads.

The scheme will provide owners of pre-1995 cars a rebate of $2,000 if they upgrade to a more fuel efficient model, but solar industry representatives say this isn’t good enough and the money shouldn’t have come at the expense of their industry.

The Government has also stripped the industry of a further $150 million for the solar hot water rebate, effectively ending that program altogether.

John Grimes, chief executive of the Australian Solar Energy Society, says the industry has been hit with a massive setback.

“I think the industry is dumbfounded. To pay for this type of program instead of putting money into solar, they’re going to take resources from a renewable energy source. It’s incredible.”

“The money shouldn’t be taken from solar. The solar program should actually be fast-tracked, and spent now, and the Government should commit to a 5% target of electricity generation by 2020 coming from solar power. That would provide the setting for large-scale projects.”

Grimes says instead, the Cash for Clunkers program should be funded by reducing the Fuel Tax Credits scheme, which subsidies diesel for mining companies, and costs $4.9 billion per year.

“If you look at the recent solar flagship program, there were only two groups benefiting from that, when there were actually 52 applications. The majority were financed, had good low-risk technology, and there should be more groups benefiting from this rather than just having two winners selected and then the rest can pack-up and go home.”

Gillard announced the $394 million program over the weekend, saying it will come into effect from January 1 next year for three years if the Government is re-elected.
However, Opposition leader Tony Abbott attacked the scheme, saying it was another example of wasteful spending.

“Bringing this program in, the Government seems to have humiliated the industry minister who was dead against these when they were first mooted last year,” he told reporters in Perth, referring to innovation minister Kim Carr. The Coalition also says it has a problem with the fact the majority of approved cars in the program are foreign-made.

However, the Federal Chamber of Automotive Industries has supported the move. Chief executive Andrew McKellar said in a statement it will help move older, unsafe cars off the road.

“One in five vehicles on Australian roads are more than 15 years old with many of those not meeting the environmental and safety standards we now expect,” he said. “A key part of any strategy to reduce carbon emissions from road transport must address the impact older cars have on the environment.”

“The industry will obviously need to work through the finer detail of this proposal before it can be implemented.”

McKellar also said the group supports a proposal to develop a regulated carbon dioxide emission standard for new light vehicles, which the Government also announced.

“The industry is confident we will reach agreement with any incoming government on the detailed structure of a new standard, including ways to recognise the uptake of emerging low emission technologies and alternative fuels,” he said.

The Obama Government in the United States introduced a similar Cash for Clunkers deal last year, in order to stimulate its sluggish economy. However, the plan was criticised for its cost.