First Solar reconsiders Australian investments amid 'uncertainty' over Renewable Energy Target

Updated

The company building the southern hemisphere's largest solar plant says it is reconsidering future investments in Australia because of uncertainty about the Government's Renewable Energy Target.

Multinational solar panel maker First Solar is building a $450 million plant in the far west of New South Wales for energy provider AGL.

It would be enough to power 50,000 homes, the company said.

First Solar's vice-president of business development, Jack Curtis, says a lot has changed in the eight months since the former federal government announced the project.

"Those projects … reached financial close in a different political and business environment which was almost a year ago now," Mr Curtis said.

"That's obviously changed quite dramatically since the election. There's now a much greater deal of uncertainty around future projects like this."

Mr Curtis says this is partly due to the Coalition Government's review of the Renewable Energy Target (RET), which currently aims to have 20 per cent of Australia's electricity generated by clean energy sources by 2020.

The review is headed by former Reserve Bank board member Dick Warburton, a self-confessed man-made global warming sceptic, but not a climate change denier.

The target was due to be reviewed this year, and the investigation is specifically looking at the impact the RET is having on home and industry power bills.

The ABC's Fact Check found the cost of the RET was estimated to be between 1 and 5 per cent of power bills.

Australian Chamber of Commerce acting chief economist Burchell Wilson says it is a failed policy that should be phased out.

"It's 5 per cent now. There's a real question as to how much it will be in 2020," he said.

"This thing is set to double in terms of the amount of renewable energy they're forcing on consumers."

Mr Curtis says for First Solar, the outlook is bleak over the next five years.

"We really need to look at what does the next five years look like from a broader policy backdrop perspective and what comes after these projects and whether the investment should continue to be made," he said.

Australian Renewable Energy Agency facing funding cut?

There is also speculation the Australian Renewable Energy Agency will have its funding cut in next month's budget.

The $3.2 billion agency has a mandate to invest in emerging renewable technologies.

It took the unusual step of sending a letter to all its stakeholders last week, warning that its future funding was unclear.

Industry Minister Ian Macfarlane says he will not speculate about what is in the budget, but says the Government is looking at all uncommitted funding to repair the budget deficit.

Investment in renewables falling worldwide: report

A new United Nations report has found that last year investment in renewable technology around the world fell by 14 per cent, or about $38 billion.

In Australia, investments flatlined at $4.7 billion.

Clean Energy Council spokesman Kane Thornton says this is partly because investors were getting better bang for their buck.

"The cost of renewable technology has come down," he said.

"That's a really exciting development and therefore the cost to build a wind farm or a solar system has reduced.

"But secondly we've seen a lot of policy uncertainty in Australia over the past year, and that has meant that there is a lower level of investment in 2013."

The overall share of renewables globally has steadily climbed to 44 per cent of the world's new energy capacity.

The executive director of the United Nations Environment Program, Achim Steiner, says the drop in investment masks the many positive signals of a dynamic market.

"This should give governments the confidence to forge a new robust climate agreement to cut emissions at the 2015 climate change conference in Paris," he said.

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Topics: solar-energy, environmental-technology, electricity-energy-and-utilities, alternative-energy, federal-government, australia, nsw

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