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solarA new energy policy being enforced in Queensland, Australia may be the death knell for solar power, industry officials fear.

That fear stems from the new way in which electricity consumption is charged to businesses. The policy, which was rolled out by the Queensland Competition Authority and the state government in July, makes two major changes to the pricing system. For actual energy consumption, pricing rates have been reduced; the price of general service, however, has essentially become a fixed-rate fee.

It works like this: Rates for energy consumption have dropped from 11.6 cents per kilowatt hour to 10.4 cents per kilowatt hour, yet the amount of electricity consumed is no longer as important as the service fee consumers pay for access to the grid. Now, businesses that were being charged $42 per day will be charged $488 per day. Queensland’s Goods and Services Tax will bump that up to $533 per day.

According to RenewEconomy, this change is “horrifying” to the solar industry because it no longer rewards energy efficiency. When consumers are charged a flat fee for service, there is no incentive for businesses and homeowners to invest in or maintain new solar panels.

Many in the solar industry believe the new policy is part of a government effort to keep solar out of the local energy market.

“The changes are clever in their design,” says Steve Madson, director of Country Solar, referring to the new energy tariffs. “They do not actually result in an increase in total electricity costs, and in some cases they actually cause a fall. But they kill the possibility of reducing the bills by installing solar.”

Just last month, Queensland was the site of a major solar win. In the middle of a sunny week, the 1.1 gigawatts of the city’s rooftop solar generated so much power they sent local electricity prices into negative territory. Unfortunately, this new policy is in the vein of Australia’s increasingly anti-efficiency trend, following a repeal of the country’s successful carbon tax.

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