Under Prime Minister Julia Gillard a Carbon Tax was introduced into Australia, set at $23 per tonne of CO2 equivalent, with numerous exclusions and a compensation package. Apparently fulfilling his promise to get rid of the Carbon Tax, Prime Minister Tony Abbott’s coalition government succeeded in repealing it on 17 July 2014.
Unfortunately we still have a myriad of green schemes, solar bonus schemes, and of course our Renewable Energy Target. How much does this cost us? The following is based on regional Queensland, but applies Australia wide.
Ergon Energy provides electricity to all of Queensland outside the south-east corner. With my last bill was included Ergon’s latest pamphlet for residential consumers, Issue #5 of “The Bright Side”. Half of this issue was devoted to changes to electricity pricing and how it will affect consumers. Ergon, and the Queensland government, have been claiming that after a couple of years of steep rises, 2015-16 will actually see a small drop in prices. I read the information with interest, and as well checked with the Queensland Competition Authority (which sets prices).
Ergon summarises the changes to the typical Tariff 11 bill over a full year with this supposedly helpful graphic:
You will note that the cost to the average consumer of the solar bonus scheme and the Renewable Energy Target will rise by $23. So what, you say, the average bill will reduce by $7. Actually, it’s not so simple. Ergon gives five scenarios of how it will affect consumers. The QCA provides more detailed information, with percentages of the total cost.
This is based on an annual Tariff 11 consumption of 4,053 kWh, which is the average for residential customers. From this, it is possible to calculate exactly the changes and how much of this goes towards solar and RET schemes. As well, using an estimate of 0.86 Tonnes of CO2 per Megawatt-hour (0.84 – 0.88) for black coal power stations, it is possible to estimate how much CO2 the average consumer is directly responsible for. Of course, the 0.86 is for the generation of electricity, not consumption, and consumption is about 83% of electricity generated. This has been incorporated in my estimates.
In 2014-15, the direct additional cost to the average consumer of the solar and RET schemes was $146.63, rising in 2015-16 to $169.63.
This represents a direct additional cost to the consumer of approximately $34.90 per Tonne of CO2 emitted, rising to $40.40.
A direct additional cost imposed through government policy is a tax. Applied to residential consumers it is a nasty regressive tax, as it applies to all regardless of income or capacity to pay. The Solar Bonus Scheme portion is particularly cruel, as low income consumers are subsidising those who could afford and took advantage of this scheme, which will keep paying 44c a kWh feed in tariff for original systems until 2028, now reduced to 6.348c for new systems. This cost the average consumer $106.64 last year, and the $20 extra is an increase of 18.75%.
Not only that, the Joe Hockey argument does not apply. Poor people who do use less than 3,800 kWh will see an increase in their bill, while those who use more than 3,800 kWh will see a decrease, and proportionately less the more they consume.
This is robbing the poor to pay the rich. It is set to continue with the proposed increases in the RET, so the poor will be subsidising inefficient green projects well into the future. A scheme too good to be true certainly is. Years ago I knew the Solar Bonus Scheme was an unsustainable scam and immoral. Now, more than ever, both the Solar Bonus Scheme and Renewable Energy Targets should be completely abolished, with compensation for Solar Bonus users limited to initial cost of installation less subsequent feed in revenue. Poor people have better things to spend their money on.