Bad news for renewable power

STRIPPED of emotion, the much anticipated Renewable Energy Target review has found it to be an ­expensive and inefficient way to cut carbon dioxide emissions.

As a result, it has delivered the federal government a volatile mix of good policy but tough politics.

Concerns about sovereign risk got a sympathetic hearing with existing projects left unaffected.

But for the renewable energy industry overall, big and small, the news is all bad from both options that have been recommended.

For electricity consumers there is likely to be little impact on household bills, but energy-­intensive trade-exposed industries have been thrown a lifeline.

Big wind and solar projects will find little comfort in a scheme that extends new permits on a year-by-year basis depending on ­increases in electricity demand.

As a result, the $15 billion pipeline claimed by industry for big new wind and solar projects will remain blocked.

The review did not buy the ­argument of sunrise industry ­employment. It said renewable energy jobs cost jobs elsewhere.

This will be a hot-button issue for vocal lobby groups. But the more dangerous retail politics is likely to come from the army of rooftop solar users being assembled into a vocal grassroots campaign force.

Recent meetings in marginal electorates has shown people are prepared to speak out for the green energy revolution that is transforming suburbia.

The RET review has effectively told the Abbott government to close up shop on subsidising rooftop solar and solar water heaters through small-scale renewable ­energy certificates.

This is because cost reductions of small-scale solar PV systems combined with the increase in ­retail electricity prices means small-scale renewable energy is becoming commercially viable.

It says the cost of carbon emissions abatement through small- scale green power is up to $200 a tonne — many times the expected price of other measures, including large-scale renewables.

As such, the panel’s reasoning is one of economics and equity.

But it is easy to underestimate the emotion attached to the rooftop solar revolution.

If it adopts the RET review recommendations, the government’s job is to convince voters it is acting for fairness. Given falling prices, people who want to go solar don’t need a hand from their neighbours — they can go it alone.