THE AUSTRALIAN: Government’s withdrawal of solar subsidy scheme leaves industry in trouble

THE AUSTRALIAN | By Amos Aikman | 11 August 2012

Dr Michael Goldsworthy of Silex Solar

THE country’s largest home-solar market has been in freefall since the NSW government announced plans to axe its solar bonus scheme in April.

The decision has triggered widespread job losses and business closures, an industry survey has found.

The findings come as Silex Solar, operator of Australia’s only solar-panel manufacturing plant, yesterday announced it would shut part of its operation with the loss of 30 jobs.

Industry representatives said they faced a growing crisis as state-based subsidy schemes were wound back and competition intensified from overseas. They predicted up to 4000 jobs could go by the end of the year in NSW alone.

Michael Goldsworthy, chief executive of Silex Solar, blamed a flood of cheap imports, poor economic conditions and a lack of government support for his firm’s redundancies.

He said the market had been “flooded” with Chinese imports, causing the price of an average panel to halve in about two years, and that the Chinese could undercut local manufacturers thanks to generous government assistance and lower wages.

“Right at the time when the federal government is claiming they have got all sorts of benefits for renewables we don’t see a cent,” he said. “We don’t want government handouts; we want a level playing field.”

Silex will no longer manufacture solar cells, the key component in solar PV technology, but will continue to assemble solar panels using imported components. The company’s western Sydney plant, purchased from BP in 2009, employs about 100 people, nearly half of whom are involved in making solar cells.

A survey of 91 NSW solar businesses conducted by the Australian Solar Energy Society and released yesterday, found the market for home-solar installations had all but collapsed.

It cited a 93 per cent fall in sales inquiries and more than 400 job losses since November.

The survey found there had been an 88 per cent decline in new solar installations since the peak early this year, and 25 per cent of businesses contacted were either closed or planning to close.

NSW is Australia’s largest home-solar market, with about 830 businesses employing 5500 people. The industry employs about 15,000 nationwide.

The solar industry has been engaged in a public stoush with the NSW government since Premier Barry O’Farrell announced and then withdrew a plan to retrospectively cut by a third the amount paid to households that generate solar electricity, citing the high cost of the subsidy scheme.

The government has refused to continue the scheme, pending the findings of a NSW Independent Pricing and Regulatory Tribunal inquiry, expected in April.

AuSES CEO John Grimes labelled the government’s lack of support an “attack by stealth” on the solar industry, and accused the government of wanting to “lock solar in the bottom drawer and forget about it”.

NSW Energy Minister Chris Hartcher said the industry had “been built on the back of government subsidies”, and it was time to end the boom and bust cycle.

NSW previously offered 60c per kwh for all electricity generated by home-solar panels, an amount widely regarded as overly generous. WA recently slashed its subsidy from 40c to 20c for any extra electricity fed back into the grid, and then closed the scheme to new applicants after it reached capacity. Victoria offers a 60c per kwh subsidy for extra electricity fed back into the grid, but its scheme is under review. Queensland has announced no plans to change its 44c feed-in tariff.