David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

My question is to Senator Birmingham, representing the Minister for the Environment and Energy. Despite the hoo-ha about the personal affairs of the Deputy Prime Minister, based on the silly idea that politicians are expected to be moral leaders, the Australian public and the Liberal Democrats are more concerned about crippling electricity prices. Subsidies are to blame. These include subsidies for homeowners to put solar panels on their roof, which makes electricity more expensive for those who don't own their own home because they are the ones funding the subsidy, and the problem gets worse. Is the minister aware that the likely cost to consumers for rooftop solar subsidies this year will amount to about $1.2 billion, up from almost $500 million in 2017?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I thank Senator Leyonhjelm for his question. In relation to the preamble in which Senator Leyonhjelm acknowledged the concerns of the Australian people being focused in relation to issues such as how their electricity prices can be reduced and where jobs can be created, I concur entirely, Senator Leyonhjelm, that they are the priorities the Australian people rightly expect us all to focus on. They are the priorities the Turnbull government is resolutely focused upon.

In relation to installation of solar panels, Senator Leyonhjelm is correct in that Australia has one of the largest, if not the largest, installation rates of solar panels in the world, with one in five Australian households now having solar panels on their rooftops—more than 2½ million Australian households. As senators would be well aware, in our time in office the coalition did make changes to the Renewable Energy Target, and in doing so sought to ensure that the 2020 target in place was better aligned to what was achievable, and so had a lesser impact in terms of household costs. But we are determined to go further in terms of household costs. As I've outlined to the Senate on a number of occasions now, our pursuit of lower prices is focused on comprehensive action in terms of reform of policies relating to emissions reduction and on ensuring the reliability so that they work in a better way in future to: drive towards the lowest price point aligned with our work; rein in the cost of networks around gaming of the system; get more gas into the domestic market; get a better deal via retailers; and, ultimately, deliver the National Energy Guarantee, which is estimated to have a reduction in average household power bills of around $400 per annum compared to what they would otherwise be.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Leyonhjelm, a supplementary question.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Is the minister aware that he could utilise the review mechanism inserted into the Renewable Energy (Electricity) Act 2000 by the Gillard government to reduce the price of small-scale technology certificates and, therefore, lessen the cost impact of subsidies on consumer electricity bills?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

In fact, the small-scale-technology certificates that operate as a component of the renewable energy target under the Small-scale Renewable Energy Scheme are traded under market conditions. There is a cap in relation to what the maximum price can be, some $40, but they do trade below that frequently, and, indeed, have traded in a range, I understand, between $30 and $40 for those certificates. The government is determined to make sure that we do transition the way in which support is delivered, and that we do transition to the National Energy Guarantee-type model, which will ensure that distortionary impacts are removed and that we have a free and fair application of generation sources into the energy market, regardless of their type, where they simply compete on the basis of price and reliability, and where we meet our international obligations.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Leyonhjelm, a final supplementary question.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Can the minister provide justification for not reducing the maximum cost of solar subsidies when the cost of solar panels has dramatically fallen in the last few years?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

In fact, there is a natural phase down that operates within the Renewable Energy Target Scheme legislation, and, in particular, in relation to the Small-scale Renewable Energy Scheme. That scheme has an end date of 2030. The phase down means that each year the number of certificates provided to a solar panel installation declines by one year's worth of certificates as 2030 approaches. To spell that out a little, that means that in 2016 an eligible solar panel installation would receive 15 years worth of certificates, but last year that fell to 14 years worth of certificates, and this year it would be only 13 years worth of certificates and so forth. There is in fact a phase down that adjusts the way in which the solar industry is supported under that scheme. Of course, that would work commensurate with that phase down occurring and the government pursuing a National Energy Guarantee that doesn't play favourites but does guarantee reliability and affordability.