News Service from House Harris

Fed: Solar panels won't reduce overall emissions: think tank

CANBERRA, Dec 18 AAP - Encouraging households to install solar panels is a waste of time that won't reduce Australia's greenhouse gas emissions by one kilogram, says a Canberra-based think tank.

More solar panels will simply free up extra permits under emissions trading for the cement, aluminum and steel industries to increase their carbon output, The Australia Institute says.

The federal government abandoned on Wednesday its unpopular decision to means-test the solar rebate.

That means all Australian homes will now qualify for a rebate worth up to $7,500.

If they chose to install a good-sized solar system for $15,000 it will effectively cost just $7,500, depending on where they live.

The Australia Institute says if individuals buy less coal-fired electricity, power stations will buy fewer permits.

But that just means there'll be more available on the market for other industries.

"It's the polluters who will benefit from people putting solar panels on their roofs, not the environment," institute executive director Richard Denniss said.

"Removing the means test might make householders feel good, but it will not reduce Australia's greenhouse gas emissions by one kilogram."

After emissions trading kicks in during 2010 there will be "absolutely no point" in households trying to reduce their emissions - except to save on electricity bills.

Spending $7,500 to reduce household electricity bills was a bad investment."

The federal government should modify its trading scheme so household pollution reductions are recognised, Dr Denniss said.

If an individual saved a tonne a permit should be taken out of circulation, he said.