"Electricity prices have become one of the hottest political issues".

"Electricity prices have become one of the hottest political issues". Photo: Glen Hunt

THE national renewable energy target should be modified to prevent a costly boom in solar panel installations triggering higher electricity prices, the Climate Change Authority has recommended.

But the independent agency rejected calls for the target of 20 per cent of electricity to come from large-scale renewable energy generators, such as wind farms, by 2020.


Electricity prices have become one of the hottest political issues as a mix of factors - ranging from excessive investment in infrastructure, and the carbon price - have sent bills soaring by as much as 50 per cent in three years, with more increases to come.

There are two parts to the renewable energy target - the main large-scale component covering big plants and the small-scale scheme covering rooftop solar panels. The small-scale scheme is uncapped.

The authority suggested a change to the definition of what counts as ''large-scale'' to cover commercial-scale arrays of rooftop solar panels with a capacity greater than 10 kilowatts.

The Climate Change Authority chairman, Bernie Fraser, a former Reserve Bank governor, said allowing commercial schemes to be included in the uncapped small-scale scheme could ''potentially be quite expensive''.

The chief executive of the Australian Solar Council, John Grimes, attacked the recommended change, saying it would ''significantly undermine investor certainty and lead to business plans being ripped up''.

The price of solar panels has fallen markedly due to cheaper production costs in China and a big increase in installation. Australia's households have been adding solar panels to their roofs at a rate of 300,000 or more a year, with demand fuelled in part by state incentive schemes, most of which have subsequently been wound back.
