Julia Gillard must keep her promise and scrap hugely expensive and inefficient greenhouse gas abatement schemes, like vast taxpayer funded cross subsidisation of wind power, rooftop solar panels and water heaters, now that she has broken her promise to not introduce a carbon tax.

Ms Gillard said last week, as she announced her disastrous carbon price, that the government would, as a result, “not pursue programs that have got a higher abatement cost.”

Senator Boswell said there were a range of subsidies for renewable energy that should be urgently abandoned, especially given that power prices were already rising as a result of the Greens driven carbon price from the middle of next year.

They will otherwise drive even higher electricity prices than the estimated $300 a year increase implicit in a $26 per tonne carbon price.

He nominated, especially, the off budget but ultimately taxpayer funded cross-subsidisation of  roof top solar panels which cost well over $1 billion last year alone (See #), and the approximate $150 million in direct and indirect subsidies for roof top solar hot water systems.

Senator Boswell said the extraordinary cross subsidy for expensive wind power, (See +) which will make billionaires out of some major players at the expense of big increases in power prices, subsidised every step of the way by taxpayers, should also go - immediately.

There would be a fight with the Greens, who want a carbon tax  “plus,plus,plus”, including a gross feed-in tariff for ALL forms of renewable energy, but if Ms Gillard does not quickly move to rein in hugely expensive “feel-good” renewable schemes - with little abatement impact - she will have broken yet another promise.

# The Clean Energy Council says there were 105,520 installations of roof top solar power systems in 2010. The great majority will have taken advantage of an up-front free allocation from the government of Renewable Energy Certificates representing five times what their unit will generate over 15 years. At an average $6000 allocation for each installation, the 2010 bill alone for this program would be circa $1 billion. Consumers will pay many millions for generous state based subsidies for owners of roof-top solar panels.

+ The government has engaged in virtually non-stop flip-flops on its renewable energy strategy in so far comprehensively failed bids to create a REC price of circa $60 so that entrepreneurs can build massively expensive and inefficient wind power farms, and then reap huge profits – their capital costs comfortably sunk courtesy of the tax payer -  as the carbon  tax helps drive power prices through the roof.

ENDS