What is the Solar Premium & how could it affect you?

(Please note that while this article focuses on the ACT, it may apply to the whole of Australia in the future).

The ACT government has announced that it is seriously considering a Solar Premium (or Feed-in Law) for Canberra and the ACT. If this plan comes to fruition, the ACT will have become the first place in the Southern Hemisphere to adopt this approach to energy and the environment.

So what does this mean?

As it stands now, if you put solar panels on your roof in Canberra, ACTEW will buy the electricity you generate off them, at 7.4c¢ per kilowatt hour. (Read more about the ACTEWAGL Solar buy-back scheme). From a financial point of view this has clearly been of little to no assistance in persuading people to install solar power to fulfil their energy requirements. The German government some years ago, however, under the direction of Hermann Scheer, a Federal MP, implemented a nation-wide Feed-in Tariff. This legislation mandated that the electricity utilities in Germany were obligated to buy any electricity generated from renewable sources (solar, wind, biomass) for several times more than the market rate. Due to this success, the ACT Government has now decided to follow the lead of the European models (Feed-in Tarriff) (.pdf) in developing what they have termed as 'The Solar Premium for Canberra'.

So why is this a good thing for Canberra?

The outcomes of the introduction of a Solar Premium in Europe have been stunning. Since 1999, €3.8 billion ($6 billion Australian) worth of photovoltaics has been installed in Germany alone and the industry employs 214,000 people there. Read about the success of the German solar energy and The renewable Energies Act - In effect a solar premium (.pdf).

The Solar Premium has been referred to as 'one of the world’s best environmental policies'. (.pdf)'This simple, low-cost mechanism has turned several European countries into world leaders in the renewables sector.'
- Feed-In Tariffs - Boosting Energy for our Future (.pdf) (The World Future Council)

Not only has it allowed a purely commercial basis for the decision to install solar energy to come into being, but more importantly, it has triggered people into wanting to install it.

‘Feed-in tariffs have clearly spurred innovation and increased interest and investment, notably in Germany, Spain, and Denmark over the past several years. For example, power from eligible forms of renewable generation under Germany’s feed-in law more than doubled between 2000 and 2004, from 14 TWh to 37 TWh. In several countries…Most recently, Spain’s feed-in tariff has helped new  investment plans for solar thermal power generation.’
- Renewables 2005: Global Status Report (.pdf)

The introduction of a Solar Premium in Canberra would make it the national leader in the fostering of a strong domestic solar energy industry. By increasing the demand for solar energy, a case for domestic production becomes stronger. Wouldn’t it be great to have Australian made panels put on your roof instead of imported panels?

Although the concept and implementation of The Solar Premium legislation in Canberra and Australia at large is not yet a reality, the good news is that you as an individual can affect great change - particularly considering the matter has so much momentem already. Contacting Mick Gentleman (the MLA responsible for getting the Solar Premium this far) at gentleman@parliament.act.gov.au, or the Chief Ministers Department at cmdwebmaster@act.gov.au and telling them that this is the greatest idea since the light bulb would make its passage all the easier.