Nats claim solar power subsidy 'has backfired'

Nats claim solar power subsidy 'has backfired' 5:00AM Tuesday August 14, 2007
Changes to the solar water heating initiative have backfired, causing the first decline in the number of new installations in years, National's climate change spokesman Nick Smith said yesterday.Last November the Government announced a $15.5 million climate change initiative that included an increase from $300 to $500 in financial assistance to homeowners for loans.

Government spokeswoman Greens co-leader Jeanette Fitzsimons said the goal was to double the number of systems being installed.Figures from the New Zealand Solar Industries Association show that in the first six months of this year installations were down 5 per cent on the previous year.At June 2006, 2017 installations had been done, in comparison by June 2007 only 1923 had been completed. This compares with an average annual growth of 37 per cent before the Government announcement in November.

Dr Smith said the policy had backfired because Ms Fitzsimons believed she could regulate down the price of the solar water heater systems, when it was best left to the competitive market.

"A further problem is that the Government's new Building Act is adding hundreds of dollars in costs to solar heating systems by requiring building consents, when it would be far less costly to regulate standards through accredited installers," Dr Smith said.

Ms Fitzsimons said she did not think the pricing arrangement for solar systems was unreasonable."It has to be sold at a price which means it will pay for itself over its 20-year life," she said on TV3. "I don't want consumers to be conned into buying solar water heating that isn't cost effective for them."- NZPA
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Gary Moller comments:
I wonder when the politicians are going to acknowledge the real reasons why there have been no sign-ups. It is because the New Zealand public is not stupid and NZ is such a small place that the word gets around very quickly. The internet helps and when it comes to the internet, the average Kiwi is savvy. The drop in sales coincides with the launch of this website in December 2007.

A "20 year life" is highly assumptive to the point of being ridiculous. I have yet to find a solar water heating system that is lasting anywhere near that kind of time without showing significant signs of deterioration. 5-6 years would be more like it (For evidence, browse the dozens of posts on this website using the "labels" tab in the right hand column).

If there is to be a 20 year lifespan, or near to that, then we must place the emphasis on quality rather than price. I do not believe that it is possible to make cheaper solar water heating systems without the serious risk of compromising performance and durability.

A solution to the problem of cost-effectiveness, in the face of the need to improve quality, is to increase the price of oil and electricity - but what politician is going to recommend that!