Tag Archives: Cash for Clunkers

Solar Policy Takes a Hit

Solar Industry Budget Cuts Announced

They say a day is a long time in solar policy. Over the weekend we saw Prime Minister Gillard announce $370 million in solar industry budget cuts to pay for the ‘Cash for Clunkers’ program.

Solar Hot Water was the first target. A total of $150 million was pulled out of the federal government’s solar hot water rebate program, (the Renewable Energy Bonus Scheme) with $75 million lost in 2010/11 and another $75 million in 2011/12. This could result in the premature end of that program.

Next the solar industry budget cuts affected Solar Flagships, with $220 million taken from stage one, (with $70 million lost in 2012/13 and a further $120 million in 2013/14). The Solar Flagships program has already been delayed by around a year while industry waited for detail and now funding has been cut.

In addition to the above, more solar industry budget cuts came from changes in the support given to small scale solar (solar hot water and solar PV). Originally the small scale scheme was proposed as an uncapped scheme. When the legislation passed however, a potential cap on support for small scale solar was set at 6 million Renewable Energy Certificates Australia in 2015.

Sounds OK? Not when you consider that in 2009 over 10 million small scale Renewable Energy Certificates Australia were created. (And no, this figure is not inflated by phantom REC’s to any significant degree, as phantom REC’s only started to wash through the system in late 2009). That means that the Renewable Energy Certificates price paid for residential solar could be reduced in the near future. More solar industry budget cuts ahead?

Connecting Renewable Energy to the Grid

On first pass it seemed that the solar industry has had a small win with the government committing $1 billion to connecting renewable energy to the grid. But then we learnt that the first tranche is $100 million over the next 4 years.

The cost of installed High Voltage Transmission lines that actually extend the grid are estimated to be around $1.7 million per kilometre. As it stands this policy is set to deliver less than 15km of new transmission line per year for the next 4 years.

Renewable Energy Feed-In Tarriff Victoria

But good solar policy is being implemented. Last week the Victorian Government committed to a 5% solar target by 2020, and a feed-in-tariff to drive that commitment. It’s a very strong policy – precisely the sort of policy the federal government should be adopting –  rather than solar industry budget cuts they need to be increasing support.

National Target for Solar Energy Supply

For too long the solar industry has been an easy target. Our industry is subject to constant policy change, delay and uncertainty. This is no way to run industry development policy.

What we need is long term stability. First, let’s set out a national target for solar at 5% of electricity generation by 2020 (around 6,500MW of capacity).

Next, put the policies in place that will drive domestic, commercial and industrial demand for solar. The federal government must build on existing State and Territory support for solar, by expanding feed-in-tariffs to include larger commercial and industrial solar.

At the largest scale a competitive feed-in-tariff would be ideal. This is where the projects that help reach the target, and can be developed for the lowest feed-in-tariff are successful.

Next we need to drive down the costs of these solar projects. One important way to do this is through government backed loan guarantees, which act to reduce the cost of project finance.

We have a world class solar resource. We have strong public support. We have proven technology that is rapidly falling in price. It is time we got serious about a comprehensive, long term plan for a solar Australia, instead of being hampered by solar industry budget cuts.

Need a Long Term Solar Energy Plan

Australia’s solar resource is available everywhere, it closely matches demand, and can it be stored and dispatched when it is needed most. If we are all active in spreading this message over the next week or so, perhaps it is not too late to turn the fate of solar around.

Now is the time to speak out.   Get active in online discussions; write to the media, and to your local federal candidates.

John Grimes, CEO   Australian Solar Energy Society (AuSES)
Website: www.auses.org.au Email: CEO@auses.org.au

Some useful media addresses follow:

The Australian letters@theaustralian.com.au Financial Review edletters@afr.com.au Sydney Morning Herald letters@smh.com.au

Daily Telegraph letters@dailytelegraph.com.au Canberra Times letters.editor@canberratimes.com.au Courier Mail cmletters@qnp.newsltd.com.au The Age letters@theage.com.au Herald Sun hsletters@heraldsun.com.au Adelaide Advertiser advedit@adv.newsltd.com.au Keep letters to 200 words and include your full name, daytime phone number and address.

We need to prevent more solar industry budget cuts. Spread the word that solar needs policy stability now.Click to read related articles on photovoltaics, renewable energy systems, green roofs, LEED and green architects on this blog.

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Include Business in Cash for Clunkers

24 July 2010

Ray Wills, CEO
Western Australian Sustainable Energy Association Inc. (WA SEA)
Website: www.wasea.com.au
Email: info@wasea.com.au

The WA Sustainable Energy Association Inc. (WA SEA), Australia’s largest energy industry chamber, welcomes the announcement that a re-elected Gillard Government will embark on a program to remove old clunkers from Australian roads.

Such a scheme has the potential to reduce

• air pollution (higher standard engines cars)
• carbon emissions (fuel efficient cars)
• out of pocket expenditure (fuel efficient cars)
• motor vehicle accident occurrences (safer cars)
• motor vehicle accident injuries (safer cars)
• hospital queues (safer cars)

‘Cash for clunkers” has the potential to reduce costs currently incurred in moving to greener vehicles – both cars and trucks, according to Prof Ray Wills, Chief Executive of WA SEA.

‘Scrapping old cars and trucks from the road and replacing them with new greener, less polluting, safer vehicles – both new and near new – will not only reduce fuel consumption and greenhouse gas emissions, improve air quality in the city, it will also improve safety standards on Australian roads, potentially saving lives,’ says Prof Wills.

‘The Government should also engage with the motor trade industry and seek their support for the scheme, including through a collaboration through a reduction in dealer delivery charges levied on green cars to create a rapid uptake of green vehicles.’

Another simple way to improve outcomes on this is to ensure Government fleet purchase polices target greener cars. The take-up of Australian produced hybrid vehicles such as the Toyota Hybrid Camry, as well as new electric vehicles such as the Mitsubishi iMiEV, should be a priority for all Australian governments.

Governments buy close to 5% to the Australian vehicle fleet, and mandated green fleet schemes for government will also ensure a more rapid transition in the efficiency of the collective Australian vehicle fleet. Further, a “cash for clunkers” scheme funded by Government could have priority access to ex-government fleet vehicles to improve affordability without cost to government – and the taxpayer.

‘A “cash for clunkers” scheme must scrap the most unsafe and biggest guzzlers from the road. Old cars and trucks involved in this scheme must then be scrapped to ensure they are not resold but are crushed and recycled. However, the scheme must be rigorous, and Government should not pay for natural retirements, unlicensed vehicles, nor unroadworthy vehicles – these should be simply removed by regulatory action, not by compensation.’

‘The Federal Government should also work through the Council of Australian Governments (COAG) to toughen laws around the relicensing of second-hand vehicles so that, with the reasonable exception of collectables and vintage, vehicles with low safety and poor fuel-efficiency are not allowed back on the road.’

‘To ensure the greatest change results from a cash for clunkers scheme, regulatory changes that focus tax law and other tools to ensure that both fleets and private motorists are simultaneously incentivised and required to upgrade to low-emission vehicles will ensure a market for the new vehicles is maximised.’

There have been significant gains in the design of vehicles in the past decade, driven primarily by innovations from the European market. Vehicle safety has changed substantially in the last ten years, following the adoption of new safety standards in Europe (European New Car Assessment Programme, or Euro NCAP) with the emergence of dual airbags becoming standard equipment for many passenger cars, particularly through innovations developed by automakers like BMW in the luxury car market.

Funding – not happy.

WA SEA is extremely disappointed the funding for this initiative is taken from support for renewable energy.

‘The Federal Government has committed over $6 billion taxpayer dollars to support for the Australian car industry, and this area of funding should have been used for this measure,’ says Prof Wills.

The Opposition promises to date have reduced commitments to act on climate change and WA SEA calls on the Opposition to offer better policy than the insubstantial promises to date.

Indeed, WA SEA calls on all political parties to show strong commitments real leadership in transforming Australia’s economy from 20th Century business as usual to reflect the necessities of a more sustainable Australia and a more sustainable planet.

Editors notes:

1. Announcement the Prime Minister Julia Gillard
2. Fuel efficient vehicles listed on the Australian Government’s Green vehicle guide website show new vehicles are easily twice the efficiency of older cars – and in cases as much as three times more efficient than the ABS average. Australian Bureau of Statistics rate of fuel consumption averaged for all motor vehicles on Australian roads was 13.8 litres per 100 kilometres. Articulated trucks had the highest average fuel consumption with 55.6 litres per 100 kilometres. (ABS data for the 12 months ended 31 October 2006.)
3. Statistics on Australian vehicle fleet, More statistics on Australian vehicle fleet 
4. Green Vehicle Guide website
5. WA SEA Policy
This new election commitment from Federal Labor mirrors calls from WA SEA for the past four years – WA SEA has been calling on both State and Federal Governments to make green vehicles more affordable, available and attractive by:

• reducing vehicle taxes including stamp duty and reforming company taxation frameworks to direct purchasing toward fuel-efficient, low-emission, new and used green vehicles for both transport and commercial uses;
• offering rebates and financial incentives on the purchase of new and used green vehicles;
• conversely, applying greater taxation-based and other regulatory penalties on energy-inefficient new and used vehicles;
• improving consumer awareness through information, education, and advertising that focuses on life-cycle costs and promotes manufacturers making the greatest effort to deliver real change; and
• requiring fleet managers, including commercial fleet, to only select from the most fuel-efficient fit-for-purpose vehicles.

6. The Western Australian Sustainable Energy Association Inc. (WA SEA) is a chamber of enterprises has a growing membership of over 350 industry members from a diversity of businesses. WA SEA is the largest energy industry body in Australia.
7. WA SEA bringing you the Energising SE Asia Conference 23-26 March 2011, Perth.
8. Estimated government costs indicated in below:

Other parts of getting clunkers off the road-

• Government purchase and disposal of old licensed vehicle based on lowest market value to a maximum of $2000 per vehicle – a vehicle purchasing team to work in association with the scheme tasked with finding cars that are licensed and still considered roadworthy but fit the clunkers definition (>15 age, >13.8 litres per 100 km fuel consumption, poor safety rating)
• Need a partnership with scrap metal merchants through waste management authorities – will recover some investment through value in recycled metal
• To participate, vehicle to be disposed of must be replaced by a greener, more fuel efficient (ie be less than 7.4 litres per 100 km (set at half the national average of 13.8 l/100 km as calculated by the Aus Bureau Statistics) and safer vehicle (minimum five star rating)
• Need tendered suppliers to participate in the scheme to supply new vehicles to reduce supply cost, or simply involve second hand cars less than 3 years old – in particular, make use of ex government fleet, look for supporting buy-in from commercial fleet owners to sponsor.

Savings in carbon emissions and road accident not considered.

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Cash for Clunkers puts Solar into Reverse

23 July 2010

John Grimes, CEO
Australian Solar Energy Society (AuSES)
Website: www.auses.org.au
Email: CEO@auses.org.au

The Australian Solar Energy Society (AuSES) says the Gillard Government’s ‘cash for clunkers’ program has thrown the future of Australia’s solar industry hard into reverse. The solar industry is stunned to learn that $220m will be pulled from the Solar Flagships program to pay for the Gillard government’s $2,000 cash for clunkers scheme. “Why would you rip the heart out of the promising utility scale solar program to simply put more cars on Australia’s already crowded roads?” “By taking money away from solar you are taking money away from a 100% emission free electricity generation, and putting it into reducing emissions from cars. It makes no environmental policy sense”, said Grimes.

The Australian public constantly support solar as the number one climate change solution, and they want to see employment and infrastructure projects rolled out to meet the climate challenge. “This announcement means that clean energy jobs and large clean energy utility projects that had been funded, have just been scrapped or scaled back”. “The Gillard government has just announced that they are cutting these important green collar jobs, just as we should be scaling them up” said Grimes. The ‘cash for clunkers’ program should be funded by reducing the generous Fuel Tax Credits scheme, which subsidises diesel fuel for mining companies, and which costs Australian taxpayers around $4.9 billion a year, or $606 per household per year” said AuSES CEO John Grimes. AuSES is calling for stable policy settings for solar to allow both utility scale solar and personal solar action to be supported.

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