Australia's Renewable Energy Industry Braces for Removal of Support

As the Abbott government prepares to scrap the country's renewable energy target, solar energy installers still expect a boom in their business.

According to a report by the Sydney Morning Herald, consumers can get at least a discount of $600 for a kilowatt of solar capacity. However, the upfront discount may end if Prime Minister Tony Abbott decides to follow the recommendations of the recently released Renewable Energy Target Review.

Mark Group chief executive Rob Grant said the price for a typical solar energy system will increase from $6,000 to $8,000. Reports said the industry predicts an increase closer to half of its original price while solar hot water systems are expected to have a 40 percent increase in price.

Before the Abbott government will decide to make cuts or lower Australia's renewable energy target, the industry expects a short-term increase of orders for solar panels. About 45,000 households have installed solar panels in the June quarter.

Grant said removal of support will have a "devastating impact" in the industry. He added that his British-based company had invested millions in Australia when the Abbott government vowed to maintain bipartisan support for renewable energy. If Australia will withdraw support in the industry, Grant believes his company will not invest in the country again.

Palmer United senator Glenn Lazarus declared that weakening the renewable energy target would be "irresponsible." He said his party is prepared to block any move of lowering targets.

On August 18, Prime Minister Tony Abbott declared his support for the closure of the new entrants' renewable energy target. According to reports, Silex Systems, the company responsible for the Mildura solar power station, said the scrapping of the clean energy project would cancel the funding. Silex was afraid that the Australian Renewable Energy Agency and the Victorian government will withdraw the funds allotted for the project.

Australia's renewable energy target requires power generation from 20 percent of clean energy sources like solar and wind power by 2020. Mr Abbott has previously blamed the current target for surging electricity prices.

However, research data provided by advocates of renewable energy revealed that electricity prices will increase if the renewable energy target is scrapped. The report has estimated that coal and gas companies will be the only ones to benefit from such a decision. Experts said scrapping the renewable energy target will result in an increase in carbon emissions.