Possum’s analysis of the broad policy objectives being played out in a subtle, piecewise fashion shows the political strategy of the Rudd government in the large. Be that as it may, there’s plenty of evidence of raw political cunning as well; I’d just like to point to a little policy announcement in the budget that demonstrates it. The policy in question isone that directly impacts my own upcoming spending plans - that is, to put some grid-connected solar panels on my roof, subsidised by the Photovoltaic Rebate Programme, which gives a subsidy of up to $8000 on such systems.
As discussed on a couple of previous LP threads, the rebate, while great for the beneficiaries, is in my opinion woeful public policy. To summarise, solar cells are currently way more expensive than just about any other renewable option, including wind, utility-scale solar thermal and CSP, small-scale hydropower, biomass, possibly geothermal and especially energy efficiency - you name it, it’s better value. But even if you specifically want to subsidise solar panels on roofs, it’s dumb policy, because it encourages them on the wrong roofs. For the same amount of money, you can put a lot more solar panels (and the extra support gear required) on the roofs of factories, schools, and offices, and generate a lot more power, than you can with domestic-size installations. Furthermore, if you look at what other forms of generation rooftop solar is likely to displace, it’s not coal or gas. It’s those other, arguably more promising, forms of renewable generation, because of the vagaries of the real, substantial incentive in place for renewable energy, the Mandatory Renewable Energy Target.
Whether you personally agree with that or not, it seems that there are plenty in the government who do, and decided they’d like to spike the program. But - as any thread on the topic at LP reveals - there are plenty of people who like solar energy, and like the idea of incentives to see it deployed on rooftops. So how to square the desire to stop this perceived waste of resources, with the desire not to have the supporters of solar panels - many of whom inhabit the political territory between Labor and the Greens - get too publicly upset?


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