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<DIV>Canberra slashes solar power rebates</HEADLINE>
<DIV class=adSpot-toolbox>By <BYLINE>Louise Williams . The Age
</BYLINE><BR><DATE>January 16, 2006</DATE><BR></DIV><!--articleDetails-->
<DIV class=articleExtras-wrap>
<DIV class=islandad id=adSpotIsland><SMALL></SMALL> </DIV></DIV><!--articleExtras-wrap--><BOD>
<P>THE Federal Government has slashed solar electricity rebates to community
organisations and schools and will phase out financial incentives for
residential and commercial solar power installations by the middle of next
year.</P>
<P>The Australia Greenhouse Office, which offers cash refunds to home owners,
community groups and developers installing photo-voltaic (PV) panels to generate
electricity, quietly halved the maximum rebate to community organisations on
January 1, from $8000 to $4000. Rebates available to private home owners will be
gradually reduced until the program is closed in 2007.</P>
<P>Vice-president of the Australian Business Council for Sustainable Energy,
Mark Twidell, said the rebate was providing the stimulus for the solar power
industry. He said industry representatives would seek talks with the Federal
Government over the rebate's future.</P>
<P>Installations of PV systems in Australia's cities declined markedly from 2003
when rebate levels to home owners were first reduced using the same $4000 cap.
Solar-generated electricity is free and emits no greenhouse gas emissions, but
PV systems are expensive and a considerable investment up front. Owners of PV
systems can sell their power into the electricity grid, but are currently paid
the same price as for power generated in cheaper coal-fired power stations.</P>
<P>"If there is any single measure that has kept the solar industry going here
and kept expertise in Australia, it's the PV rebate," said Chris Hart, manager
of PV installer EcoSouth Solar. The AGO says the Federal Government's new $75
million Solar Cities program will replace the rebate.</P>
<P>Under the Solar Cities initiative, four locations will be chosen around
Australia to demonstrate solar technology and to trial new policies to encourage
investment in and use of renewable energy.</P>
<P>"Solar Cities is an excellent project and there is genuine intent and real
action on the part of government," Mr Twidell said.</P>
<P>But, the small Australian solar industry fears stagnation if the rebate ends
before Solar Cities is implemented. The Solar Cities program also limits
benefits for solar use to the four as yet undecided urban locations, meaning
individuals wanting to reduce their own use of coal-fired energy outside the
selected areas will face higher costs.</P>
<P>The Australian Energy white paper of 2004 recognised the potential value of
solar energy as well as current cost and pricing constraints. Solar energy is
produced on-site, so does not have to be delivered, and is produced during the
hottest weather, corresponding with peak power demand, mainly to run
air-conditioners.</P>
<P>Peak power is the most expensive for conventional power stations to produce.
Germany kick-started its domestic solar industry by assisting home owners and
developers to purchase PV systems and by paying a higher price to purchase solar
electricity, recognising its real value in alleviating peak-load pressure on the
electricity grid.</P>
<P>Mr Twidell, also regional manager of BP Solar, said demand for solar panels
from BP's Sydney factory was outstripping manufacturing capacity, but mainly
because of demand from Asia.</P>
<P>Japan, Thailand, South Korea and some European countries have adopted policy
incentives based on Germany's model. Solar Cities will consider similar future
incentives for Australia.</P></BOD>
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