Starting from June, the latest incentives were implemented for Queenslanders with the purpose of keeping electricity prices for “typical domestic and small businesses…below inflation on average over the next 2 years”. The plan includes: energy efficient appliance incentive, $50 per year electricity incentive, solar incentives for rental properties as well as several enticements specifically targeting regional Queensland and an energy savers program for business.
Let’s dive deeper into what the incentive is about.
For those of you who are unaware, and that maybe a lot of us, the Queensland Palaszczuk Government has a rather expensive program called the Affordable Energy Plan.
Coming in at a ‘loose change’ value of $2 billion, the plan is broad and far reaching. It is designed with the express purpose of making energy more affordable for Queenslanders.
In that regard, there’s certainly nothing metaphorical or ironic in the title. Here’s a toast to the Queensland government for calling a spade a spade. On the surface at least, the incentives are all about ‘affordable energy’.
Last October the Palaszczuk Government announced a raft of government sponsored incentives (that fall under the Affordable Energy Plan), for launched on January first, 2018. A cool $300 million of the $2 billion pie were subsequently launched (in part) this January, as promised. Sort of.
While delays and setbacks reared their ugly head, much of the latest instalment of the broader energy plan is available to Queenslanders now, with the exception of the battery incentive.
What they’re going to have from now on is an energy efficient appliance incentive, a $50 per year electricity incentive, solar incentives for rental properties and several programs for business.
All of these programs have eligibility requirements and fair lists of fine print. It’s not open slather and the beneficiaries have been ‘carefully selected’.
While the list of incentives have certainly turned heads and sparked plenty of interest, it’s the headline offering that we wish to look at in further detail in this article: ‘Interest-free loans for solar and storage’.
Interest-free solar loans
Eating up a cool $21 million of the overall $300 million 2018 power spend-up is the interest free loans for solar systems and battery storage. This includes a grant system specifically for batteries. (The battery grant is due for release later this year).
The primary driver behind the loan/grant initiative, (according to the Government), is to support the continued uptake of solar and provide Queenslanders “…access to more affordable electricity.”
Sounds simple doesn’t it! An interest-free solar loan with a grant available for you-beaut battery storage. So where’s the catch?
There really is no catch, but there are a bunch of eligibility requirements. The interest-free loans for solar systems and battery storage are not available to everyone, and the numbers of the eligible are fairly limited. What’s more, supply issues are likely to arise.
Ultimately however, there are up to 5000 electricity customers and a brand-new battery industry that stand to benefit. By and large, regardless of an innate cynicism we harbour towards many a government initiative, this particular solar incentive can be viewed in a positive light.
Let’s look a little closer to find out why.
Firstly, the program will be released in two stages. The interest-free loans for solar systems are available now -as of the start of June 2018. Interest-free loans and grants for systems with battery storage will be available at a yet to be specified date in late 2018.
It’s important to note that small businesses can also apply for the grant but will not be eligible for an interest-free loan.
As stated in the introduction, you can’t just rock up and grab a Queensland Government solar loan free of interest. You have to qualify. Yes, this means that there are potential solar customers unable to afford to finance a system who will miss out.
However, limiting eligibility to a lower income stream, as this more or less is, should be considered as providing assistance where it is really needed. Let’s look at the basic eligibility.
This is it. Verbatim, from the horse’s mouth.
- Funding for the program is capped and places will be limited
- It will help 5,000 customers, with around 3,500 solar assistance packages and 1,500 battery assistance packages being made available
- The Queensland Rural and Industry Development Authority will administer the loans and grants. Pre-registration is not available
- You will only be able to apply for one solar and/or battery assistance package.
In order to apply for an interest-free solar loan for rooftop solar systems, you must:
- Receive Family Tax Benefit Part B, and
- Have electricity costs at your home of more than $1,000 over the past six (6) months.
In late 2018, loans and grants for systems with battery storage will be available to:
- Add an eligible battery system to an existing solar system, or
- Install a new combined solar and battery system.
You must be a homeowner:
While many of the renters in our midst will be crying no fair, it should be noted that there is a landlord/tenant incentive scheme being provided under the affordable energy plan.
The numbers are low, granted, but at least it is a press in the right direction. There are 30% of Australians renting. That’s a lot of Australians confused about their potential to have any solar system at all.
The solar/rental issue is reasonably complex. Here’s an article from the ABC and another from RenewEconomy that will shed a little solar light on it.
Receive family tax benefit part B:
This is an indirect means test. For the most part, fair cop. Assistance should be provided to those that need it most, particularly when that particular financial circumstance is coupled with the next heading…
Have electricity costs at your home of more than $1,000 over the past 6 months:
Those of us already struggling with such hefty electricity bills, and already requiring income driven tax breaks (Tax Benefit Part B) are arguably the least likely to be able to front up with an outlay for solar. It is also likely that they are unable to afford other types commercial solar finance schemes.
Add an eligible battery system to an existing solar system:
Firstly, if you have a current solar system, it must be capable of connecting a battery system. Secondly, there will be a list of approved batteries. Further details as to which batteries are approved will become available when the battery grant comes on line later in 2018.
Install a new combined solar and battery system:
Essentially, you will be able to get an interest free loan on the system with a incentive on the battery. The issue with this is that we don’t know exactly when this will become available.
Pre-registration for the loans and grants is not available.
This could mean that you might delay your decision to get the interest free loan so you can incorporate the battery grant, only to find out others have got in in front of you and you have missed out on either or both.
Funding for the program is capped and places will be limited
It will help 5,000 customers, with around 3,500 solar assistance packages and 1,500 battery assistance packages being made available
Let’s look at these two rules together. Cost aside, (remember there’s $2 billion in this pool) why would places be capped, why only 5000 customers?
There’s little doubt many more Queensland electricity consumers, struggling with the ongoing rise e of power costs would find the scheme very appealing.
Surely an expanded program would see even greater uptake of solar and more Queenslanders enjoying the benefits of cheaper electricity.
Take this quote from Queensland Treasurer Curtis Pitt:
“Solar panels and batteries are a great way for households and small businesses to cut their electricity bills, but for some, the upfront cost can be a challenge. It will also help in supporting to kick start the growth of the battery industry in Queensland.”
So why not make it open to all, in a similar fashion to the federal solar incentive? The federal solar incentives are the reason we now have a secure and growing solar industry in Australia. Imagine the Queensland battery industry if the grants were uncapped with unlimited places.
Ok, it seems a bit disingenuous to put costs aside. Making the scheme open to all over an indefinite period would be outrageously expensive.
While the cost would be almost certainly prohibitive, therefore justifying a limited release, there is another side to the argument justifying capped and limited places. Supply and demand.
Supplier rules for the interest-free solar loan and incentive scheme
The loan/incentive rules don’t just apply to the consumer. There are rules that apply to suppliers also, and it could be argued they’re a double-edged sword.
The Queensland Government has been careful to ensure that only specially accredited retailers and installers (suppliers) are eligible to offer their products and services under the incentive plan. Further to this, any supplier must have a registered office in Queensland.
Before we discuss why, lets look at the rules.
Solar system suppliers
Solar systems funded through this program must be purchased from a solar retailer that is a signatory to the Clean Energy Council Solar Retailer Code of Conduct or an equivalent industry code.
Battery storage systems suppliers
A panel of eligible battery suppliers will be engaged to supply and install battery systems to the program. Battery inspectors will also be appointed to audit installations to ensure safety and quality.
Supply and demand
First and foremost, it can be assumed that the Queensland government does not want another episode of the Rudd/Garret ceiling insulation roll out. Read this ABC article.
The ‘pink batt’ initiative saw the feds pour huge amounts of money into the scheme with few checks and balances. Consumer uptake of the program was huge. Everyone was installing insulation.
As a result, fly-by-night and cowboy operators with little to no experience began installing roof insulation to meet demand, and there was plenty of money for them. According to the politics, it wasn’t just a green initiative, it was also a ‘nation building’ initiative.
The results were historic. While shonky workmanship was rife, it was the tragedy of numerous workplace deaths that remains in everybody’s memory.
The pace and size of the role-out created an under-resourced monster leading to poor to non-existent industry regulation. In the pink batt case, the path to destruction was ‘insulated’ with good intentions.
Rather than let the market run wild with bucket loads of Queensland solar money under the guise of ‘state building’, the Queensland government are keeping a very tight rein on solar suppliers and retailers.
This reasonably conservative approach would seem very wise when considered alongside the ‘pink batt’ saga. The tight-reined conservative approach doesn’t come without its potential problems, however. For one thing, even with the limited number of places available, can demand be met?
With a limited number of suppliers qualifying as accredited, there may already be an issue with timely provision for a fully subscribed program. There may be quite some numbers of participants having to wait for installation.
The question also remains, if demand outstrips supply, will it force an upward trend in solar and battery prices? This outcome would certainly take some gloss from the ‘affordability’ component of the initiative.
Also, there are any number of excellent solar suppliers, usually smaller operators, going about their solar business providing outstanding solar service, products and back-up who will miss out on the business growth opportunity.
This particular government-imposed accreditation may not necessarily fit the business model of many a solar company, particularly smaller, regional/country-based operators. In reality, the commercial delivery side of the program becomes somewhat exclusive.
While it is understandable that Queensland might want to keep the business in Queensland (the local office requirement), it seems that precluding all but the specifically accredited solar suppliers is detrimental to smaller solar businesses generally. Again, this would seem contrary to the desired industry building outcome of the program.
The Affordable Energy Program is a State Government initiative. By default, compromise is inherent in its DNA. This means that, where the interest-free loans for solar systems and battery storage is concerned, there will be some winners and some that miss out.
Ultimately however, under full subscription the program will see 5000 Queenslanders over the next 3 years with more affordable access to more affordable, renewable energy. What’s more, the recipients will be those that are least likely to be able to afford solar in the first place.
One can’t help but see this as anything but good. We could argue the ‘too little too late’ argument. We could also point out that the pace of change is not keeping up with the phenomenal rise in electricity process and the worrying demands of carbon reduction.
The counter argument to this, in a strictly positive sense, is that it’s better late (and a little conservative) than not at all. The ecologically driven citizens, solar fans, solar businesses, and the planet want more of this renewable focus from Government. Essentially, more is what we are getting.
Solar is a proven means of reducing carbon footprint. Solar is a proven means of significantly reducing your power costs. The interest-free solar loans are a leg up for 5000 Queenslanders to get into the solar power/battery storage game.
Don’t knock it. Take advantage. Use that which is provided and get proactive. Take back control of your electricity expenses from a carbon-based central grid, and those retailers seemingly hell-bent on pricing you out of your humble reading lamp.