Solar cut 'will deter overseas investors'

Sunday Canberra Times
30 January 2011, Page: 14

THE GILLARD Government's $250 million cut to its Solar Flagships program means Australia has little chance of attracting serious foreign investment for large scale clean energy projects, a national solar research body says. Australian Solar Energy Society chief executive John Grimes said the funding cut signals to investors that Australia has "no coherent solar development policy" and is driven by short term budget targets. "What confidence can industry have to invest in the major solar utility scale projects we need to abate carbon emissions in the future, if major changes are constantly made in this way?" he asked.

Earlier this week, Prime Minister Julia Gillard announced funding for solar power programs would be cut by around $500 million to offset the Government's flood reconstruction spending in Queensland. The cuts include $250 million from the Solar Flagships program, $160 million from the Solar Hot Water rebate and a cap on a further funding for the Solar Homes and Communities program. Mr Grimes said solar power seemed to be "the honey pot the government raids whenever it needs short term funding".

"During last year's election campaign, we saw $220 million pulled out of the Solar Flagships program to fund the cash for clunkers scheme, which has now been scrapped to fund the flood rebuilding effort in Queensland. "But the funding taken from Solar Flagships hasn't been returned, so in effect that's a $500 [million] cut to the program".

The Cleaner Car Rebate Scheme, dubbed "cash for thinkers", was launched during the 2010 federal election campaign as part of a package of climate change initiatives. It was to provide grants of $2000 to scrap pre 1995 cars to purchase new low emission, fuel efficient vehicles.

Mr Grimes said climate research indicated Australia could expect more extreme weather events, but instead of supporting technologies to help mitigate climate change, the Government "kept raiding its renewable energy budget to fund other projects". Clean Energy Council chief executive Matthew Warren said it made no sense to fund "the cleanup of the worst floods in Australia's history by cutting investment in climate change solutions".

"Australia has the potential to be a world leader in developing affordable large scale solar power. We need more investment in its development, not less. "Yet Labor's own Solar Flagships program to accelerate development of this technology has already been trimmed twice before the program has even started". Mr Warren said.