The Renewable Energy Target (RET) is a government intervention that mandates a proportion of electricity is to be generated from renewable sources. It was introduced in 2001 as a means of reducing greenhouse gas emissions. It’s commonly known as a solar rebate, but it’s not actually a “rebate”. Technically when you install solar you create and sell Renewable Energy Certificates (RECs). Normally this is processed through the company you buy solar off – it reduces the cost of a 6Kw solar system by about $4500. Under the RET Scheme, Liable entities, (electricity retailers like ORIGIN, AGL, and Click) are required to buy a proportional amount of Renewable Energy Certificates. So the retailers pay to support renewables – and then pass it on to us, the consumer.
How much does it cost us?
In an attempt to abolish the RET, the government has blamed it for the ever increasing cost of electricity. Tony’s Abbot’s position is that “the renewable energy target is causing pretty significant price pressure”. But the RET only adds about 4 percent to your power bill. If you have a $1000 bill, that’s about 40 bucks a quarter. A small price to pay to clean up the air – and usher in a renewable energy revolution.
Why scrap the RET?
What’s the real reason for Abbot wanting to scrap the RET? I’m not much of a cynic, but the best answer I have found is down that path. The success of the solar industry is a threat to the old business model of producing and distributing electricity. The Government is under pressure from the coal lobby, incumbent utilities, network operators and state governments to either dump or sharply reduce the RET. So last year the government appointed climate sceptic Dick Warburton to conduct the review of the renewable energy target. If you think climate change is all a bit of a scam driven by the UN and NASA, with the assistance of the Bureau of Meteorology and a vast majority of the world’s scientists, media and governments – then renewable energy is no longer a priority. And if the review board is made up of people with a vested interest in the coal industry – then the outcome is known before the review begins
As expected the review came out last week recommending the RET be abolished.
The way forward
There is no doubt that solar is shaking up the electricity generation and distribution industry -and it’s creating a new set of challenges. Who pays for the poles and wires when everyone goes solar? How do we provide power at night? What do we do with an oversupply of power at lunchtime? The progressive answer, however is not to put a handbrake on solar – but to take on the challenge of the inevitable decentralised grid. Supporting battery technology would be a good start.