Everywhere today seems to talk of rising power prices. After facing a massive 22% price increase only last month (one of many!) to hear of more talk of increases really is really disheartening, especially since many Queenslanders are already struggling. There has never been a better time to install solar power and stop being affected by all these Government policy changes, elections, Renewable Energy Target (RET) and failed promises.

A new report by RepuTex, a independent research and consultancy firm, has found that dumping the carbon tax would mean that the RET would not be met, which in turn means that we will face a further 5%-10% increase in electricity prices.

The report was commissioned by the World Wildlife Fund (WWF) but does not tell government or business anything that they don’t already know, according to RepuTex’s Director of Research, Ben Harper. Tony Abbott has promised to dump the carbon tax altogether, should he be elected, to apparently stop rising power prices! “That’s a misconception I think [because] the carbon tax makes up a very small component of retail electricity prices,’ said Ben Harper. “But that component is returned through the building of renewable energy.”  The consequences then come in two fold because removing the carbon tax would also reduce investment (and building) of renewable energy. Any form of renewable energy being inputted into the grid actually lowers electricity prices as “It represents a very low-cost form of energy that displaces other fossil fuel generators which have very high fuel costs,” Mr Harper explains.

The major electricity price rises will come in when the Renewable Energy Target is not met. Without more renewables being built, there will be less competition in the electricity market. Less competition basically means that there will be a monopoly in the market, leaving fossil fuelled electricity generators free to charge higher prices.

The basic rule will be:-

No carbon tax = decrease in new renewable energy

Decrease in new renewable energy = higher gas, coal and oil prices.

The following chart taken from the report shows the effect the carbon tax will have on the growth of wind energy.

The report’s findings are in-line with other research being conducted such as that by Bloomberg New Energy Finance (BNEF) that also announced the likelihood of future electricity price hikes. “Our analysis indicates that a reduction of the Renewable Energy Target is unlikely to result in a cost reduction to the end consumer,” BNEF Australia head Kobad Bhavnagri, said in emailed comments to RenewEconomy last week. “By contrast, it could actually put upward pressure on retail electricity prices. This is because the savings from reducing the target are outweighed by the costs.”

It is said that if the carbon price is reduced or scrapped, the RET will only reach around 14% by 2020 – falling well short of the 20% target.

With all these price rises almost certain, one way or another, there has never been a better time to essentially get out of the rat race and go solar. Provide your own clean power and give yourself peace of mind. Click here to contact Evolution Solar Sunshine Coast.