In the range of energy supply systems designed to reduce greenhouse gases, the most expensive is photovoltaic cells, or solar panels. Engineering firm SKM has estimated that rooftop solar power is eight to 12 times more costly than regular electricity. The panels also cost three to five times more than the inefficient wind turbines that, on the back of subsidies, are increasingly dotting the landscape.
The Howard government provided grants for half the cost of the installation of rooftop solar panels, up to $8000 a house.
Like some other state governments, the Victorian Government also requires electricity retailers to buy back surplus energy from the panels at 60 cents per kilowatt-hour. While ostensibly 60 cents is "only" fourfold, the true electricity price is virtually zero. The cost of this buyback is hidden in consumers' bills.
So we have a capital grant to promote an uncompetitive source of energy compounded by an additional hidden subsidy from other consumers.
Yet the promoters of these panels want more. They want the subsidy paid for the electricity generated from rooftops also to be paid when it is used in the house itself. That is like promoting commuting to work by horseback, having the government pay half the horse's purchase price and requiring other commuters to pick up four-fifths of its upkeep.
At least the Brumby Government, in what it claimed was compassion towards "working families", rejected these even more extreme claims for handouts by the industry and environmental zealots.
As well as allegedly doing its bit to save the world, according to the photovoltaic (PV) cell supporters, a subsidy will father a new industry. Sustained employment growth based on such subsidies never works in Australia.
Solar power cells are part of a galaxy of Victorian Government electricity-focused regulations that will add costs to consumers. New-home buyers, already obliged to install more insulation than they need, are to be slugged with additional requirements. And Victoria has its own energy efficiency target starting in January that will force energy retailers to incur new costs in buying energy from high-cost sources and pass them on in customer bills.
All this is despite greenhouse policy being unambiguously within the federal, not state, government sphere. The previous excuse the Victorian Government gave for state meddling was that the Liberals in Canberra had refused to implement an appropriate national emission reduction program.
The Rudd ascendancy has made no difference. There is a persistence of fragmented state government policies being introduced. Not only do these lack a Gordon Ramsay finesse in mixing ingredients but they are a superfluous tier on the heralded federal emission trading scheme.
Nevertheless, the people of Victoria may be fortunate in having an ALP rather than a Liberal government taking decisions on this issue. Judging by the statements of the Opposition's spokesman, David Davis, the Liberals would add even greater consumer burdens to help the solar industry. Sadly, Victoria has seen the politics of pandering to pressure groups replacing judgements made in the interests of the wider public.
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