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Australia's solar installers face another boom and bust

Under a cloud: Australia's renewable energy sector faces an uncertain future.

Under a cloud: Australia's renewable energy sector faces an uncertain future.

Solar energy installers are expecting a boom then sharp contraction of their businesses as the Abbott government prepares to take an axe to renewable energy support.

Consumers now get an upfront discount of about $600 a kilowatt of solar capacity that will probably end if the government adopts the recommendations of the Renewable Energy Target review led by businessman Dick Warburton.

A typical solar system costing $6000 will rise to $8000, according to Rob Grant, chief executive of Mark Group, while other industry estimates place the increase closer to half. Solar hot water systems will be as much as 40 per cent more expensive.

About 45,000 households added solar panels in the June quarter and a short-term surge of orders is expected before the government's decision on whether to lower the target for large- and small-scale renewable generation.

"Inside their first year, the Abbott government has gone out of its way to renege on their promise" to leave the target unchanged, Mr Grant said.

Removal of the support "will have a devastating impact on the industry", he said, adding his British-based company had invested tens of millions of dollars in Australia on the Coalition's pledge to retain bipartisan support for renewables. "I don't think they'll ever consider investing here again."

The government's ability to alter the target, though, may be limited. Palmer United senator Glenn Lazarus said reducing the target would be "irresponsible" and his party would block any move.

"The majority of Australians want Australia to move away from dirty fuel like coal and to increase our use of renewable energy sources," Senator Lazarus said.

Both NSW Labor and the Greens called on the Baird government to pass legislation requiring the state meet its 2020 target of supplying 20 per cent of power from renewables regardless of Canberra.

"My challenge to [NSW Environment Minister] Rob Stokes is to put his money where his mouth is when it comes to supporting renewables," Labor's upper house leader Luke Foley said.

"Without a state-based guarantee of protection over $11 billion of investment in the wind industry with the potential to create nearly 4000 jobs in NSW will be at risk if the RET is weakened or abolished," Greens MP John Kaye said.

"We base our response on current policy, not hypothetical situations, so we await the federal response," a spokesman for Mr Stokes said.

The Warburton review also recommends wrapping the GreenPower program into the energy target, probably killing a scheme that has about 600,000 customers signed up for additional renewable energy.

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