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Legislation Makes Lying Legal: Renewable Energy Target Scheme
The draft legislation for the renewable energy target scheme is available after all. In the post on the solar credits, I said it was not, but now I found it.
Legislation Makes Lying Legal
“For the purposes of this Act, a certificate created in accordance with the regulations as mentioned in subsection (2) has a value of 1 MWh (even though the certificate does not actually represent 1 MWh).”
When I wrote about the solar credits before, I wondered whether our government might have overlooked the implications of inflating the REC’s they are promising. The above statement proves that they have not.
In fact they have just legalised lying, or shall we call it pretending? We can pretend to produce more renewable energy. It looks great on paper and it is enough for the purposes of this Act.
But is it enough to have an impact on global warming and climate change? If enough people take action: Yes
Here are some more details that the draft legislation reveals:
It will not affect solar hot water. Only small solar (photovoltaic), wind and micro hydro systems.
Only Systems Installed After 1 July 2009
Any system installed after 1. July 2009 is eligible for 5 times the renewable energy certificates (to 30 June 2012). Then it goes down to 4 times in 12/13, 3 times in 13/14 twice the amount in 14/15 and back to normal after 30 June 2016.
The result will be that the solar PV installations will stall in the next 6 months, as everyone is waiting to get in with the better REC’s. The only counterweight is that the $8,000 rebate might be scrapped. Here is what the federal rebate program says about their right to take it away whenever they want to.
Changes to Program Guidelines
The Australian Government reserves the right, at its sole and absolute discretion, and at any time, to change any or all of these guidelines, including to remove all or any of the guidelines or to introduce new or additional guidelines.
If the Australian Government changes or discontinues this rebate program, all applicants whose complete applications have been received before the date of change or discontinuation will be entitled to receive the rebate at the rate applicable on that date if they are assessed as eligible.
The Australian Government retains the flexibility to adjust the size of rebate in response to demand for the program funds.
Only for the First Deeming Period
REC’s can be created yearly, for 5 years (3 times or for 15 years when a photovoltaic system is installed. The legislation specifies that you can only get the “inflated” REC number for the first deeming period. So naturally, it will only make sense to create REC’s for the full 15 years at installation.
Not for Systems With Previous REC’s
Let’s say that someone installed a system in August 2004. They might have created REC’s for a 5 year period. That means in August 2009, the next 5 years can be created. They cannot get the solar credit (inflated REC’s).
Expanding a Solar System does not Seem to be Covered
Nothing can be found in the renewable energy target draft legislation about expanding a system. So it looks like it is possible that anyone with a current system can benefit by expanding it after 1 July 2008. The REC’s created for the expansion should be able to get claimed at 5 times their value.
How the $7,500 Rebate is Calculated
All media reports talk about a $7,500 rebate. That comes from the fact that the first 1.5 kW of a system can receive the increased REC’s. With the current federal solar rebate, it is $8,000 for a 1 kW solar system. You can easily add another $3,000 to the system costs for the extra half kW.
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December 18th, 2008 at 10:57 am
[...] Legislation Makes Lying Legal: Renewable Energy Target Scheme [...]
December 18th, 2008 at 7:35 pm
Without commenting directly on your topic, I have yet another take on this entire scheme(ing).
The PV (solar panels) industry has been thrown a party with these government subsidies. They certainly have no incentive to become competitive, for the time being. It’s easier to cry and lobby.
What does the RECs scheme really do? It makes people co-producers of electric power under the auspices of the power generating industry. With the standard package, that is most commonly sold by installers, the owners of premises and panels benefit so marginally that it is little more than a hobby. They are not even immune from black-outs; because they are tied into the grid, their own source will be shut down in emergencies, for safety’s sake. (Which is indirectly caused by the Australian fetish with the multiple earthed neutral [MEN] system.) But, most significantly, the intended reduction in CO² production is barely affected.
With current societal habits, the generators work at peak capacities to take care of early morning start-up surges – at a time when the roof-top solar panels still do nothing. When industry runs and consumes steadily during the day, there still is no safe margin in throttling back the boilers, even if some generators and transformers have to shed load uselessly. The reliability of the sun is an unacceptable risk factor for the grid and its equipment.
In the evening the night lights are again unassisted by the now sleeping PV panels. My over-the-thumb reckoning says,- there is practically no emissions reduction involved in this scheme.
Using low wattage lighting is more effective. Last, but not least, there are all manner of disadvantages for low income earners who have to find a big up-front sum – and then finish with a few thousand out of pocket after rebates. Real investors would laugh at the terms offered. There is not even a guarantee of a return for them (as you pointed out above).
People would do better to use the money they have to contribute from their own pocket, to install an extra-low voltage parallel system with batteries and save on peak tariffs that way. Moreover, there are no statutory requirements to be met for systems operating under 50 volts, anyone can build one.
Methinks Mr. Garrett is running a ponzi scheme with his RECs.
December 18th, 2008 at 8:20 pm
Thanks for your thoughts, Doug.
What about the load that is generated during the day from air conditioning? I have not researched it and cannot quote any sources, but that seems to be an argument put forward for the usefulness of solar panels: They produce the most, when the most air conditioning is needed.
The low voltage parallel system is an interesting approach. I have seen some of these systems in operation (I can remember a place in Crystal Waters. But I have no idea what the costs would be to install it (especially as a retrofit). Do you know costs and possibly suppliers?
Something else puzzling about the REC’s is that the government does not have to pay a cent for this program. They have just passed the buck to the energy retailers (who are paying for the REC’s). And they are passing it back to the energy users (with increased electricity prices), who are getting rebates from the government to deal with the higher energy costs….
OK to be fair, the larger energy users might be more likely to look into reducing their costs. And the middle income earners will be more likely to afford solar now.
So I think that there will be a reduction in emissions, even though it might not be as large as it could be or should be. The solution is in community action.
December 18th, 2008 at 9:38 pm
Daytime airconditioning needs represent too small a segment of overall consumption when averaged. It’s compensation on hot days is probably too fickle to pre-plan and insufficient to relax stand-by capacity.
Extra low voltage (under 50V) is what caravaners etc. know about. There are lots of 12V gadgets of near household strength on the market today.
I can testify that around 90 watts capacity on your roof and a 120 amp hour battery will give you 4 hours in the evening with moderate lighting, television and computer use (all simultaneous). At the end there is enough left to make a hot cuppa in an electric drink heater or a microwave. (inverter used for the microwave). Inverters also drain current, so the plasma panel has to go. In the end it all comes down to moderation in habits. During the day the panels also run a top opening 12V fridge of sufficient size for a couple. During the night you (hopefully) don’t use the fridge.
The 90W capacity is less than 10% of the most flogged 1kW installation. Cost around $900.-
If you take an average cost of $3,500.00 as your contribution to a subsidised scheme and apply the funds to extra low voltage, you should get nearly four times what I described above. (Assuming the sun shines.) Your supply also won’t be interrupted by your mains supplier. Your radio or hi-fi will sound cleaner.
December 19th, 2008 at 7:34 am
What about the investment in the 12V gear? If you go for a fridge, TV, computer and some lights that run on 12V, there might be another $2-3,000.
You also need to add wiring, so you probably end up having a similar outlay.
However, I do agree that it is great for new homes. While building it is easy to go for 12V for lights and some other appliances.
December 19th, 2008 at 10:07 pm
Dear forum readers,
We applied for the solar grid grant last week before the new changes were announced, ($8000) and hope it got to the Government office in time before the change. You get no reply from the grant office it seems (correct me if this is not so).
Even though Peter Garrett says the grant will run till June 2009, I think it may end sooner. The Solar company we used said we probably got it to the Govt office about a day before the Government changed the rules again.
We could not afford a 1.5kw system, and even though its not means tested I don’t think many people will fork out $7000 etc for the new rules.
Does anyone have any idea if applications sent in the last few weeks will still qualify? All the rules etc re REC’s are complicated for many people including my parents etc. It is hard for the public to get on board when the rules by our Politicians change a few times in one year alone.
December 19th, 2008 at 10:31 pm
Hi Jenny,
I told to the greenhouse office the day of the announcement. They were as surprised as the public by these new rule changes. What they did say was: “Business as usual. We’ll keep working away on the pre-approvals.”
So the good thing is that once you have the pre-approval, your $8,0000 are locked in. Unless it says anything different on that piece of paper, they cannot take that away from you.
So you just need to wait and see – and be patient.
Currently it takes about 8 weeks to get the pre-approval.
Regarding REC’s, usually your supplier will handle them and sell them for you. You are already getting REC’s for putting solar panels in now, so all that changes is the number of REC’s you get (and the payment).
But there is no guarantee that it will be $7,000 for a 1kW system (or $5,000 for 1.5kW). That is just true for current market prices. They might change dramatically.
The new solar credits do not come in until 1 July 2009. So it is very unlikely that the government will discontinue the $8,000 rebate before that. I think you are save, but would be very interested in hearing whether you got the rebate (in 7 weeks or so).
Alexander
December 19th, 2008 at 10:57 pm
Thanks for your advice. Yes we got the 1kw system, with a suuny boy 1100 watt inverter.(hope to trade it in on a 1700 watt later with more panels if they get cheaper)
Interesting that its buisness as usual at the greenhouse office. My concern is the solar rebate of $8000 for 1kw systems will now be rushed now to get in by June 09, and they will stop the rebate early, as I see they have a get out clause. Im 50/50 that our application was on their desk a few days before the new rules were announced so fingers crossed. Our installer told me they were 10 weeks behind giving pre approval but that may change now. Garrett said 1000 applications a month was too many getting the rebate, but for a Country of 21 million people I thought he must be joking. The solar industry can never plan long term plants and equipment on A government that changes its rules so often. Great website by the way.
cheers Jenny
December 20th, 2008 at 10:28 am
Re extra low voltage systems. I have not done all calculations exhaustively – but-out-of hand dismissals kill opportunities. With a $3500 investment I hope to save all of my peak power tariff component which is 60% of my bill.
Here are the costs of my previous description above. Adding to quoted cost of supply set-up.
4.5V LEDs x 8 (36V) $36 (conventional 12V lighting is not suitable)
Fridge (12V) $399
51cm HDMI screen (240V) $249
Tv receiver (STB) $115
Converter for Laptop $12
Inverter for LCD $55
Autowire $15
—-
881
There is also some know-how required to keep 90W of panels up to 120Amps of battery appetite.
Normally the rule of thumb would say:- 90W panel capacity to 90AH battery. Requires minor correction for certainty’s sake.
Because of the dismissive attitude of the “professionals” the xtra low voltage option becomes one of-”buyer aware”; (misquote intended).
December 20th, 2008 at 2:03 pm
Thanks Doug,
I am amazed at how easy you make this sound. You have certainly tickled my curiosity and I will investigate further. Thanks for opening this train of thought.
Alexander
December 21st, 2008 at 9:20 am
I can share a bit more on the deception aspects . If you understand the legal mechansm of the National Greenhouse and Energy Reporting system together with the Renewable Energy legislation it becomes clear how bad and fraudulent all Government policies and freameworks are on renewable energy.
HOUSEHOLD RENEWABLE ENERGY TO BE COUNTED SIX TIMES OVER
The Federal Government has released its Renewable Energy Target Bill and continues an approach that counts household voluntary efforts as part of the National mandatory renewables target and amazingly, The Australian Government now intends to expand a system that double counts renewable energy to one that counts it six times over. That’s right! – renewable energy from household systems will be counted 6 times over.
The first and only legal count under the National Greenhouse and Energy Reporting legislation is that the renewable energy goes to the grid (at small scale this is claimed by the householder that is hard wired to the system). All renewable energy and its greenhouse dilution effect is shared across all grid electricity customers through the state emissions factors. The additional counts come from the under-defined Renewable Energy Certificates created from such systems (which do not legally include aspects of use, renewable-ness or reduced emissions), being sold or unwittingly signed across to system providers, then being turned into GreenPower products that are sold to voluntary customers that believe they are reducing emissions, or, they are purchased by liable wholesalers and retailers to meet their mandatory renewable energy obligations.
So in the past, when 1 REC was created per deemed MWh of energy generation it typically led to a double count. This was bad enough (and the Federal Government Officials fully understand this accounting flaw), but to now make things worse by multiplying the REC by 5 times as proposed by the new Bill, there is massive fraud and confusion looming with 1 + 5 counts of renewable energy use and reduced emissions from a single deemed (not measured) MWh of renewable energy created.
The Federal Government should be cleaning up their greenhouse accounting systems, not making things worse. Where 1 REC is defined under legislation as being equal to 1 MWh of renewable energy from a renewable energy source, how can this REC be multiplied by 5 with no additional generation and be regarded as having any integrity? This is nothing less than foolishness in a Bill put before Parliament. What is next? Do we multiply all renewable energy creation by 5? Do we divide Australia’s emissions by 5? Maybe the Government could print 5 times as much money and we could all be rich!
A rebate system like the $8000 Household Solar Rebate is the right mechanism that can leave the renewable energy use and reduced emissions to belong to the householder. A RECs trade and payment system however, without proper disclosure (as at present), cheats away and or double counts the very properties that most householders are seeking.
The RECs trade approach uses the RECs towards the National RET target displacing other renewables already required and creates zero additional renewable energy above that which is already required by law.
Furthermore, this approach undermines any hope of GreenPower being reformed to become meaningful. It creates a sham. Voluntary mechanisms that include renewable energy can be salvaged to work along side the CPRS but only with significant reform and honest accounting practices that are incorporated into the NGERS framework.
For more detail go to http://www.climatechange.gov.au/renewabletarget/consultation/pubs/067timkelly.pdf
Tim kelly
February 23rd, 2009 at 9:00 am
[...] statement, submitted to the Department of Climate Change draft Renewable Energy Target (RET) legislation committee, said the government’s new Solar Credits Scheme will actually reverse [...]