Is it time to justify the WA decision to slash feed-in tariffs or what they call cost-cutting mechanisms?

Earlier this week SQHQ saw a disgusted and disappointed Finn as the news of the solar power betrayal was broken to the people of West Australia. His disappointment was, most obviously, with Premier Colin Barnett and Troy Buswell for the breakthrough that they made with the (historical, as Finn calls it) decision to cut the solar feed-in-tariff in Western Australia by one-half (yes, figuratively that is, from 40c to 20c). So a 50% slash of feed-in-tariffs will affect approximately 75,000 WA houses in that their solar agreements signed from 2010-2011 which promised a 40c level of feed-in-tariff rate. Not only that, the agreement lasts ten years, which means this is reason enough to annoy Finn Peacock, a staunch proponent of commitment. One thing that is sure to nauseate him is one’s (two, in this case!) distaste towards commitment to protect terms of a business contract. And if that business happens to be solar power, need I say more? So by now you have figured out the topic for today’s article which deals with the solar power sector, yet again.

There has been much discussion on the discourse that our policy makers have taken towards advancing their own money-minting interests. Finn argues that this has a negative impact on the aforementioned sector in two particular ways. One, it is indicative of the repulsive attitude of the federal government towards something as important as climate change. And two, it is making solar power inaccessible to the lower-income families, given its un-affordability. And on the moral aspect he has a lot to say about disrespect towards the sanctity of contracts. For what is the purpose of having people to sign contracts if they cannot have faith in them? Even though invisible, the tug-of-war between domestic users of solar power and our politicians is apparent.

And the world does it too..

Feed in tariff

Way back in the year 1991, Germany set an example when it introduced the feed-in tariff regime through its Electricity Feed Act, allowing it to become the undisputed leader of rooftop solar power generation and consumption in the world. Similarly, China has introduced a feed-in-tariff program at the national level that seeks to increase the demand for solar systems.

The Crux

What has to be realized (and very soon) is that residential solar energy in Australia is disadvantaged. Therefore we cannot expect the market to creep in. Moreover, do you think the market will be able to gauge the actual value of using electricity emanating from renewable sources? Properly grid-connected solar power systems can come with great economic benefit, beyond the sustainability behind their cause. And this cause can be catered to by feed-in tariffs, which the market often fails to recognize. This allows solar electricity to enjoy its true value, also providing financial incentives to domestic consumers to deploy renewable energy sources.

And yet our politicians continue to argue that the reduction in feed-in-tariffs would do well to the people of WA. So if their explanation for such slash were ‘to cut costs’, could we also possibly expect something similar to happen to the non-renewable energy sector? Then you only have to imagine the plight of the fossil-fuel fans and the narks!