29 January 2014 — Up to 6750 jobs could be lost or foregone if the Renewable Energy Target is abolished, according to analysis commissioned for the REC Agents Association, an industry body for companies trading in renewable energy certificates.
A Grattan Institute submission to the Senate inquiry on Direct Action has also stated scrapping the target would mean more would have to be spent to meet emissions reduction targets.
“If the Renewable Energy Target is axed, 2000 jobs could be lost straight away and thousands of new jobs would not be created,” said Fiona O’Hehir, vice-president of RAA and chief executive of Greenbank Environmental, who commissioned the analysis.
The Federal Government has committed to a review of the Renewable Energy Target, with Prime Minister Tony Abbott signalling that the target could be overhauled.
”We’ve got to accept though that in the changed circumstances of today the renewable energy target is causing pretty significant price pressure in the system and we ought to be a large superpower,” Mr Abbott said in December last year.
The Climate Change Authority had previously conducted a review of the Renewable Energy Target in 2012, finding that “the benefits of changing the target do not appear likely to outweigh the costs of reduced investor confidence”.
“Axing the RET is on the Government’s agenda and they need to understand this would have a diabolical impact on jobs, industry and the hundreds of thousands of Australians who want to put solar on their homes,” Ms O’Hehir said.
The analysis by SolarBusinessServices found that changes to the RET would have the single largest impact on market uptake, particularly if abolished completely and early.
Will cutting the RET save money?
The analysis stated that by 2015, the Small Scale Renewable Energy Scheme – part of the RET that provides incentives to install solar – would comprise $6.50 of a $500 quarterly power bill, but that the cost would be reduced by a parallel reduction in the wholesale cost of electricity created by solar power.
The actual cost to households was just $1.90 a quarter, and for almost five million Australians solar was substantially reducing their power bills.
A Grattan Institute submission to a Senate inquiry on Direct Action has also questioned whether scrapping the RET would save money, stating that “the Renewable Energy Target contributes to the effectiveness of the Emissions Reduction Fund in reducing emissions”. Modelling commissioned by the Climate Institute found that relaxing the RET would add $250 million to Direct Action’s cost of meeting a five per cent reduction in greenhouse gas emissions by 2020, a target that has enjoyed bipartisan support.
The full SolarBusinessServices report can be found at www.recagents.org.au