Australian federal govt reducing solar subsidies

SYDNEY (AAP) - The federal government is winding back subsidies for solar electricity panels because high take-up is pushing up power prices and reducing demand for other clean energy technology such as solar hot water systems.
Climate Change Minister Greg Combet said the level of subsidy would be reduced at a faster rate than previously planned.
That will take the level of subsidy from a peak of about $6200 at June 30 this year through to about $1200 for a basic 1.5kw system after July 1, 2013.
"Strong demand for solar panels has continued, fuelled by declining system costs, the strong Australian dollar and economy, as well as incentives such as Solar Credits and the state and territory feed-in tariff schemes," he said in a statement.
"The generous support for solar panels has also contributed to a decline in the installation of solar hot water heaters."
Solar panels typically power a range of energy-using mechanisms in a house or other building while solar hot water systems are powered by the sun separately.
The subsidy also applies to small-scale wind and hydro-electric power generation plants.
The rate is set according to a multiplier, based on a relatively simple power mechanism.
At the highest rate, the multiplier was five, which is to be reduced to three rather than four on July 1. The higher rates are typically applied to capital cities where energy costs are highest.
It falls to two on July 1, 2012, and one from July 1, 2013.
Mr Combet said that from July 1, 2011, the Solar Credits multiplier would provide households with upfront support equivalent to about a third of out-of-pocket costs for a typical 1.5 kilowatt solar panel system.
That's before taking into account electricity cost savings and any state or territory based feed-in tariff incentives.
"It is intended that existing written contracts to install small-scale solar panels, wind and hydro electricity systems, made on the basis of a Solar Credits multiplier of four and where a deposit had been paid prior to today, will be preserved," he said.