Enviroment Victoria - Submission to medium-scale solar discussion paper
Medium-Scale Solar Working Group
Energy Sector Development Division
Department of Primary Industries
GPO Box 4440
Melbourne VIC 3001
9 November, 2010
To whom it may concern,
Environment Victoria submission to the Medium-Scale Solar Working Group
Environment Victoria welcomes the opportunity to respond to the Victorian Government's Medium-Scale Solar Discussion Paper.
Environment Victoria is the peak non-government, not-for-profit environmental organisation in Victoria. With over 120 member groups and thousands of individual members and supporters, we have been representing the voice ofthe Victorian community on the environment for 40 years.
Environment Victoria is a strong supporter of renewable energy as a solution to climate change and has actively lead or supported a number of renewable energy campaigns at both the State and Federal level.
- Environment Victoria welcomes Victorian Government support for mediumscale solar development in the state
- Environment Victoria believes that the most appropriate definition for medium-scale solar is between Skw-SMW
- Environment Victoria supports the implementation of a gross feed-in tariff as the most appropriate financial and policy support mechanism to drive medium-scale solar in Victoria. Other support mechanisms will be required along side a feed-in tariff to provide the full support needed for mediumscale development
- Environment Victoria recognises that medium-scale solar provides a unique opportunity for community engagement and investment in renewable energy, and encourages the Working Group to include support for community owned projects as a key focus of its work.
Potential benefits of medium-scale solar for Victoria
Environment Victoria welcomes the Victorian Government's support for medium scale solar development in the state. To date government policy has focused on small or large scale renewable development, leaving a significant gap in the medium size renewable energy sector. This is not conducive to the orderly development of a broad-based and innovative solar industry that would be capable of directing investment towards the most cost efficient and scaleable forms of solar.
Medium-scale renewable energy developments have the potential to deliver positive social, economic and environmental outcomes that would otherwise not be achieved through large or small scale developments alone. In particular, various models for development of medium-scale renewable energy systems can lead to greater community engagement with renewable energy and greenhouse gas reduction policies as well as offering community members an opportunity to prepare for and hedge against future energy price rises through guaranteed returns from an investment in renewable energy. Importantly, medium scale developments offer an opportunity for investment to many in the community who are unable for various reasons to invest in a residential scale solar system. This leverages significant financial resources to contribute towards renewable energy and supports other community benefits including skills development.
The opportunities for medium scale developments are varied, with a range of different investor types, models of developments and objectives likely to lead to different outcomes. For the full benefits of medium scale renewable energy developments to be explored and enjoyed by the community, the government has a key role to play in appropriately supporting these different models.
Environment Victoria notes that supporting medium-scale solar could also contribute to energy security objectives as generation can be placed near to demand within the distribution network, therefore offsetting peak demand.
Finally, the development of a medium scale solar sector in Victoria would facilitate industry growth and skills development in the Victorian workforce that will be important as Victoria continues to invest in and develop large scale solar installations into the future.
Definition of a medium sized renewable energy development
The discussion paper suggests a definition of medium-scale solar set a lower limit of lOOkw and an upper limit of SMW. The paper argues that this definition would avoid overlapping with either the premium or standard Victorian feed-in tariff at the lower end ofthe scale and would cut off at the upper end before projects would be required to register on the NEM.
However, the Victorian Standard Feed-In Tariffwhich is the only support mechanism available to solar systems between Skw and lOOkw is currently proving to be a very
ineffective support, with very few installations of solar systems within this size bracket.
In order to encourage innovative investment and development models across the spectrum of solar system sizes, Environment Victoria recommends that a more appropriate definition of a medium-scale solar development for the Working Group be between Skw and SMW.
Environment Victoria also encourages the Working Group to investigate and consider the various types of potential solar investors and customers such as small to medium sized businesses, community groups, community owned solar farms, residential groupings or large businesses and factories; who will likely have very different levels of assistance and support required due to different objectives, resources and expected rates of return.
In considering a definition of medium scale solar it is therefore important not to see the definition simply as a range of sizes but also as a range of investor and development types.
Environment Victoria understands that the Working Group has been given the task of investigating medium scale solar specifically. However, we consider that the development of policy that can be applied across renewable energy technologies would be more appropriate given both the interest in and lack of support for other renewable energy technologies of medium-scale in Victoria.
Potential Barriers to uptake of medium sized renewable energy development
The discussion paper highlights a number of potential barriers to the uptake of medium scale solar.
Environment Victoria believes that the most significant policy barriers as related to the development of community owned or operated solar developments are:
- the significant upfront cost of installation combined with long payback periods
- limited time and resources of potential customers to properly investigate medium scale solar opportunities
- regulatory barriers, and
- policy uncertainty and longevity
Potential solutions to barriers for medium-scale solar
Environment Victoria believes that the most appropriate mechanism to overcome key barriers to medium-scale solar development is through a gross feed-in tariff. This is in line with international evidence that suggests that feed-in tariffs deploy projects at a cheaper cost than other types of support and with greater certainty to
market participants, including investors, network operators, governments and electricity consumers (via cost recovery). Environment Victoria considers the most workable solution to be a properly designed feed-in tariff with set long-term and interim targets, and appropriate policy levers that allow for adjustments in response to technological advances and to help contain costs if necessary.
Environment Victoria also encourages the Working Group to investigate measures to support industry development including training and accreditation programs, and measures to support consumers including funding for the provision of independent, accessible and user-friendly consumer information about medium-scale solar developments.
Please do not hesitate to contact Victoria McKenzie-McHarg, Safe Climate Campaigner to discuss this submission.
Safe Climate Campaigner