In recent years, Queensland, Australia’s solar industry has been growing steadily. According to the Brisbane Times, Queensland boasts more than 107,000 systems and over 1,000 installers. Solar businesses have installed hundreds of systems for area residents and benefited from a feed-in tariff that allows residents to feed excess electricity back to the grid at 44 cents (currently, the Australian and U.S. dollars are nearly equal) per kilowatt hour. Feed-in tariffs give home and business owners a strong incentive to install solar systems because they make it easier to pay off the up-front costs of solar infrastructure.
Unfortunately, Queensland’s legislature has decided to slash this feed-in tariff to 8 cents per kilowatt hour starting July 9. Homeowners who install solar after July 9 will receive this substantially lower incentive going forward. The difference between 44 to 8 cents per kilowatt hour will have a huge impact on the time it takes to pay back the initial investment of a solar power system.
Many solar contractors fear that this will have a negative impact on the industry. After July 9, many local companies will see a drop in business because many homeowners rushed to beat the deadline and fewer homeowners will be motivated by the new 8 cent rate.
Queensland’s solar industry leaders are disappointed in the decision to drastically cut the 44 cent rate. If the cut was necessary, it should have instead been lowered gradually, giving solar contractors time to adjust. With this drastic cut in rates, it becomes more difficult for them to change the business model to fit their new business reality. Some businesses could essentially fall off a cliff after July 9.
Jamie Press writes on behalf of Solar Market, an independent advice site offering information for anyone looking to make the switch to solar electricity. Solar Market is not affiliated with any installation companies.