Nick Xenophon (SA, Independent) Share this | Hansard source

I move amendment (5) on sheet 6116 standing in my name.

(5)    Schedule 1, item 117, page 63 (after line 6), after subsection 22(2), insert:

        (3)    Without limiting subsection (1), regulations made for the purpose of that subsection must provide that, from 1 January 2013, the number of certificates that may be created in respect of the installation of any air source heat pump water heater are only to be created in relation to the first 6 years of operation of that heater.

I accept the Senate’s vote that electric heat pumps will remain eligible under the RET and I appreciate the contribution of my colleagues; however, I still believe that we need to acknowledge that it is not the ideal technology that we should be supporting when it comes to renewable energy. As such, I propose this amendment, which will reduce the deeming period from 10 years to six years for electric heat pumps. In other words, it will mean there will be less of a subsidy, if you like. Given that it will restrict the period from 10 years to six years, it will not knock out heat pumps but it will make them less attractive. Therefore, it will make solar heat pumps, as in using photovoltaic cells, more attractive than electric heat pumps.

Under this amendment, the deeming period will change effective from 1 January 2013, so there is, I believe, a very fair transitional period of some 2½ years before this would come into force, if it is passed. I understand the concerns of the industry about the impact this may have on their business but I believe it is vital that we strive to support renewable energy technologies, which is the intent of this legislation, as much as we can and that we encourage consumers towards these better alternatives. I note the pressure in recent times on the solar hot water heaters using solar panels. I know that in South Australia Rinnai laid off a number of workers—I think from 90 to 55 workers—and has been standing down people, not because they do not produce a good product—they do—but because the company has been crowded out in a sense by the electric heat pumps. This is about trying to redress that balance in a transitional way by adjusting the deeming period from 10 years to six years. I think it is a sensible compromise in the context of what we face as a policy dilemma.

I note Senator Milne’s contribution on this and I value that, but I would urge her to reconsider her approach in relation to this, because reducing the deeming period will make electric heat pumps somewhat less attractive and encourage greener technologies such as solar water heaters. Therefore, this is a half-way house, if you like, but it will actually send a signal that solar hot water heaters rather than electric heat pump heaters will be somewhat more attractive in the market place. That is why I see this as an alternative approach. It is also a step-down in the sense of having a transitional period of some 2½ years. I would urge colleagues to seriously consider this amendment.