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Solar subsidies: Pensioners could miss out on lower power bills after Abbott government solar cuts

Mal Owen was able to afford solar panels at his home in Thornbury through an innovative local council scheme, which the federal ”green bank” was considering funding in other areas. Photo: Simon SchluterOn cold days Mal Owen is happy to run an electric heater in the bathroom, and doesn’t worry about the cost.

The pensioner draws on the sun’s energy to run an electric clothes dryer during the day, and in a decade is expected to save more than $400 a year on his electricity bills.

“I’ve always wanted solar but I couldn’t afford the outlay,” said Mr Owen, 77, of Thornbury in Melbourne.

“The local council offered to cover the installation and let me pay it off through the rates over 10 years. So it worked out very nicely for me.”

But a controversial Abbott government move means thousands of other low- and middle-income Australians may not see the same benefits.

It has directed the Clean Energy Finance Corporation not to fund wind or household solar projects, saying the money should be spent on less developed renewable energy ventures.

Mr Owen is one of almost 300 pensioners to benefit from the solar project, which was funded by Darebin Council. However, not all councils can afford the up-front costs, and the corporation was considering financing similar schemes through other councils.

Among the projects in its pipeline were energy efficiency and solar for low-income homes and social housing, potentially taking the sting out of power price rises.

“I think [solar] is the way we’ve got to go. I don’t see any other solution to when we run out of fossil fuels,” Mr Owen said.

Finance Minister Mathias Cormann said the government supported household solar via subsidies associated with the renewable energy target, providing “important certainty to this sector”.

The government says the corporation was set up to invest in emerging technologies that might not otherwise get finance, rather than to support established sectors.

However the corporation’s chief executive, Oliver Yates, said solar projects that cover up-front costs for householders do not yet have a proven business model, and few had secured bank finance.

Such projects offered “an enormous opportunity where people would be able to upgrade their houses and have the capital costs incorporated into their [council] rates”, he said.

SunEdison Australia managing director Jeremy Rich, whose firm installed and monitors the panels in the Darebin Council project, said scores of other councils hoped to emulate it – some using CEFC finance.

He said the government decision left a cloud of uncertainty over those proposals, and households would be denied the chance to “shield themselves from rising electricity prices”.

“It’s a low-risk investment, the government makes a return on the money and it supports low- to middle-income earners to get solar panels and save money on their bills,” he said.

“Why would you change that? It doesn’t make sense to us.”

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