According to the Government, phasing out the multiplier early will strike the appropriate balance between easing upward pressure on electricity prices and supporting households and suppliers who install solar PV. The overall reduction in electricity bills is estimated to be in the order of $80-100 million in 2013

The Solar Credits mechanism provides additional support for installations of small-scale solar PV by multiplying the number of certificates these systems would usually create under the Renewable Energy Target (RET).

Chief Executive of the Australian Solar Council John Grimes said “Demand for household solar has fallen sharply since the Federal Government reduced support for solar on 1 July 2012, and state governments wound back feed-in tariffs, and there are no indications demand would have picked up in the near future.”

“The Government's decision pre-empts the Review of the RET, which is currently underway, and casts a dark shadow over the solar industry. Minister Combet's announcement pulls a rug out from under the integrity of the Review of the RET.”

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Clean Energy Council Policy Director Russell Marsh said the cost cuts stemming from the announcement should effectively mark the end of the review of Australia’s 20 per cent Renewable Energy Target.

“The changes remove the effect of the multiplier for solar panels and erode all arguments for further changes to the RET,” Mr Marsh said.

“This cut further contributes to massive uncertainty and change within the solar industry. Despite the constant changing of incentives for solar, the resilience of the industry – along with the determination of consumers to protect them from rising energy bills – has contributed to ongoing cost reductions for solar panels in Australia.”