Trigger proposed for reducing Solar Credits multiplier
11 Nov 2010
An article on the front page of The Australian today titled Sun setting on era of cheap solar talks about the draft regulations proposed by the federal Climate Change Department. From next year these would provide a trigger for the regulator to change the Solar Credits multiplier. It states that ORER is to reduce the multiplier by 1 if within one quarter of the year, 10% of systems were sold to customers at an out-of-pocket expense of less than $1000 per kW capacity.
For example, if after receiving a point-of-sale discount for RECs and any other discounts, a customer pays less than $1,500 for a 1.5kW system or $2,000 for a 2kW system, the system would be classified as particularly cheap. Feed-in tariffs would not be counted as an up-front discount, so will not have an impact. If this occurs to at least 10% of systems within one quarter, the Solar Credits multiplier may be reduced from 5 to 4. The maximum capacity that this applies to may also be changed (currently 1.5kW).
These Regulations will require that, the out-of-pocket cost of each system will need to be included on REC assignment forms, so ORER can monitor the costs. As they will require one quarter of data before changes can be made, changes to the multiplier could not be announced until after March 2011.
We are expecting the government to announce the final regulations soon and will keep you updated.