The future of renewable energy funding

The future of renewable energy 16000646 800504714 0 0 7006935 300

With the May 14 release of the federal budget for 2013, the energy industry has been abuzz with the news that the Australian Renewable Energy Agency (ARENA) is going to be on the receiving end of some budget cuts.

This may be of concern to some consumers keeping a worried eye on electricity prices, as organisations such as the Clean Energy Council comment that solar power and renewable energy options help to product the industry against price shocks or costly network upgrades.

ARENA has been in the process of forming its Draft General Funding Strategy and Investment Plan for 2013-14 to 2015-16 in light of budget decisions. Institutions such as the Australian Solar Council have prepared submissions to this funding strategy to offer their advice and insight.

In the Australian Solar Council's submission, it states that while it broadly supports the draft plan and welcomes the proposed new initiatives, it has its concerns.

These concerns arise from the fact that there may be changes to ARENA's operation over the next year if funding cuts are applied. This coupled with the potential abolition of the Clean Energy Finance Corporation and the Clean Technology Innovation Program, as well as a possible reduction in the Renewable Energy Target, are all concerns for the Australian Solar Council, and are reasons why ARENA may have to revisit its draft plan again.

The Australian Solar Council asserted their opposition to cuts in ARENA's legislated budget, in a statement released on May 28.

It said that this is due to strong public policy grounds and the principle of ensuring ARENA's independence.

The proposed cuts to ARENA's budget would include a loss of $159 million in funds from the Education Investment Program. A total of $370 million in funding would also be deferred until after the year 2020.

This regulatory risk could potentially undermine investor confidence in ARENA due to a lack of secure funding - something that puts off a lot of potential solar and renewable energy investors, according to the Australian Solar Council.

Submissions regarding the draft have closed and now ARENA is considering the feedback it has received from the industry, with the plan of releasing the completed General Funding Strategy in July.

Industry members, supporters of renewable energy and even those who generate their own electricity through solar panels will be interested in keeping updated with any funding developments that are set to follow through this year.

Posted by Charlie Moore