Rebate shock could prove a panel beater

THE scrapping of the $8000 solar panel rebate last week, three weeks earlier than expected, has left thousands of people wondering whether solar is still economically viable.

THE scrapping of the $8000 solar panel rebate last week, three weeks earlier than expected, has left thousands of people wondering whether solar is still economically viable.

June Jung from Corndale, near Lismore, ordered a two panel system at a cost of $12,000, but she got the paperwork in a day late.

"I've got my fingers crossed, but if we don't get the rebate, we will have to cancel (the order). We won't be able to afford it," she said.

According to the federal Government, 80,000 have taken up solar energy in the past 18 months and there are 60,000 still in the pipeline who will get the rebate. Households in all states have also been told to brace for increasing energy costs, so many families are weighing the benefits of solar panels.

Peter Milaras of Balmoral in Brisbane was keen to go solar but he cancelled his arranged quote from the Solar Shop last Friday after the rebate was axed on Tuesday.

He also shot off a letter of objection to his local member, Kevin Rudd.

"Electricity is going up 15 per cent this year and I thought it would offset my power bill and the $8000 rebate made it affordable," he said.

With the rebate, Mr Milaras would have been only $3000 out of pocket for the one kilowatt system he had in mind.

"I'm away a fair bit for work too so I thought that feeding back into the grid would also offset my bill," he said.

Feed-in tariffs vary between 40-50c per kW in each state. In Queensland it's 44c per kW.

According to an analysis conducted by Choice, the average household uses 18 kilowatt hours of electricity per day and the most popular domestic solar panel is a one kW system that produces nearly four kW hours per day, or 20 per cent of household consumption.

A one kW solar panel costs between $12000 and $15000. Two panels can cost up to $20,000.

"Solar is still the most expensive form of renewable energy and it takes 15-20 years for a system to pay for itself, so it's a big investment," said Elise Davidson from Choice.

Mr Milaras doesn't think it's worth it without the rebate.

"I'll still get a quote down the track, but I'll have to do a serious cost/benefit analysis, and I really don't think I'll extend myself that much," he said.

Prime Minister Kevin Rudd said on Friday that the rebate would be replaced by a new system of solar credits which would in effect be a subsidy of around 50 per cent of the cost price at the point of purchase.