... So that You may be kept informed

Fed: Govt backflips on means test for solar rebate

By Cathy Alexander
17 Dec 2008 6:32 PM

CANBERRA, Dec 17 AAP - All households will be able to get half-price solar panels after the federal government abandoned its unpopular decision to means-test its solar rebate.

The government will scrap the means test, meaning all Australian homes will qualify for a rebate worth up to $7,500.

The new rules mean any household can install a good-sized solar system and be as little as $7,500 out of pocket.

When this year's budget restricted the solar rebate to households earning less than $100,000, critics said it was a step backwards as climate change worsened.

In a surprise backflip on Wednesday, Environment Minister Peter Garrett announced the test would go.

"(The rebate) will be open to everybody and it will apply to households, small businesses and community groups," Mr Garrett said.

Under the new scheme, the government will not have to fund the rebate, with the cost shifted to electricity companies.

Electricity companies will fund the rebate in return for higher credits from the government under its Renewable Energy Target (RET) scheme.

The RET scheme will help Australia achieve its target of drawing 20 per cent of the nation's electricity needs from renewable sources by 2020.

In return for passing the rebate burden on to power companies, the government has promised them five times as many credits, compared with other renewable power sources, under the RET scheme.

But there are concerns that the government's strategy to heavily favour solar power with a generous credit regime will hurt other renewable sources such as wind.

Matthew Warren, chief executive of the Clean Energy Council, was pleased the means test had been scrapped but reserved his judgment in general.

"We've got a number of concerns ... (the domestic solar industry) is being treated like a hobby by government, an industry that they indulge," Mr Warren told AAP.

Greens senator Christine Milne said giving bonus credits to solar power undermined the RET scheme.

She also said she was not happy that the solar rebate would be scaled back from 2012 and dumped in 2015-16.

Opposition environment spokesman Greg Hunt said it was an embarrassing backdown for the environment minister.

"The apparent removal of the means test is a humiliating capitulation for Mr Garrett," Mr Hunt said.