A.B.N. 74 003 323 420 CEC Accredited Solar Installers Electrical Contractor 198555C (NSW), 69172 (Qld) PO Box 20240, NIMBIN, NSW 2480 AUSTRALIA 1 Alternative Way, Nimbin Tel: 02 6689 1430 Fax: 02 6689 1109 International: Tel: +61 2 6689 1088 Fax: +61 2 6689 1109 [email protected] www.rpc.com.au 16/05/2014 Dear RET Review Panel, I am writing to you in response to your request for submissions to the current RET review. Rainbow Power Company is a renewable energy designer, manufacturer and installer in Northern NSW. We are one of the older renewable energy companies in Australia and have been in the industry for over 25 years. We have witnessed a massive change in the industry and worked closely with policy variations of the Renewable Energy Target. Below is a summary of issues we wish you to consider when reviewing the scheme. RET Objectives, The RET is a critical policy to drive the modernization of Australia’s energy infrastructure. Renewable Energy is rapidly reducing in costs and will directly compete with traditional energy sources in coming years. The RET is a cost effective policy to develop the Renewable Energy Industry in Australia, this policy ensures Australia has the skills and businesses required to move its energy sector to the 21st century. RPC has been assisted by the RET in the development of our domestic business. Currently STC’s approximately offset the cost of the “installation” component of a typical house hold solar system. This provides the opportunity for suitably qualified staff to professional install quality renewable energy equipment for our customers at little additional cost. This assistance has helped RPC to build a business with knowledge, skills and experience that gives us an international competitive edge and now allows us to export our products throughout the pacific region. The Cost RPC sees the cost of the RET as being small for the future benefits it brings to the energy sector in Australia. Some points to consider when calculating cost. -The RET is small part of recent price increases, with the largest factor clearly being network upgrades. -The deployment of new generation capacity to the grid has helped reduce the wholesale cost of electricity to consumers and needs to be factored into costing calculations. -The development of distributed generators has potential cost savings for network infrastructure that should be passed on to customers. -The cost of energy produced from Small Generation units is bought forward due to deeming of certificates. 15 years worth of Renewable Energy is paid for upfront while benefits continue for many years to come. 20 % Target RPC sees the upholding of the 20% target of 41,000 GW h based on projected energy consumption as critical for the schemes stability. Energy industry representatives such as AGL argued heavily for a fixed target when the scheme was implemented citing “investment certainty” as a critical factor in the long term investment decisions required in the energy sector. This remains the case with long term investments in renewable projects being put at risk due to proposals of reducing the target to 20% of “actual” rather than “projected” power consumption. The renewable energy industry has had a multitude of regulatory changes in recent years. This uncertainty in energy policy at both state and federal levels has been unnerving for the industry and makes our business environment incredibly difficult to operate within. Reducing the target from the fixed 41,000 GWh would continue this uncertainty and retard future investment in renewable energy in Australia. RPC would also like the review to consider that the production from distributed generators ie. small generation units, shows up as reduced demand on the Network and should be considered when calculating changes to actual energy demand. Below RPC argues for the recombination of LRET and SRES. This would be subject to the maintenance of the RET 41,000 GWh target at current levels. LRET Prices have reduced recently from around $35 to $25 due to the uncertainty with the target. Installers of Small Generation Units would find it difficult to operate at this current price of $25. LRET and SRES RPC sees this differentiation between LRET and SRES as a legacy of the implementation of the STC multiplier and State based feed in tariffs. The Multiplier flooded the market with certificates from Small generation units and the scheme was separated to deal with this unintended consequence. This multiplier has now been removed. Simultaneously, state based feed in Tariffs have now been reduced, with small generation units attracting a market value of between $0 and $0.07 per kWh for electricity feed into the grid. The current federal government policies do not indicate any further assistance on the horizon for Small Generation Unit. The election promise of “1 million solar roofs” under “Direct Action” has been left unfunded in this year’s budget and looks now to be scraped from government policy. These changes have again levelled the playing field between large and small renewable energy technologies. We recommend that the RET be returned to a single scheme and small generators units be eligible for the creation of certificates similar to the original REC’s. This would simplify the scheme, removing the complexities of mechanisms such as the STC clearing house. Small generation systems would also be included in the 20% target and subject to the market forces of supply and demand for certificates. This returns the RET back to its original simple and elegant task of providing support to the most cost effective renewable energy technologies at the minimum cost to the public. Deeming of certificates RPC sees the deeming of certificates for Small generation units as a critical mechanism for the practical implementation of the scheme. Over 50 % of systems RPC installs are in remote locations or “off Grid”. Metering and collection of data from these systems would be difficult and costly. Metering of actual electricity production from small on grid systems would also be difficult due to the wide adoption of net meters. Deeming electricity production from Small Generation Units is a cost effective solution to these issues. RPC is greatful for the opportunity to make comment on the ongoing design of the Renewable energy target. If you require any further information regarding issues discussed above please contact me on 0266891430 or [email protected]. Kind Regards Paul O’Reilly International Sales / Director Rainbow Power Company