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New Queensland regulation to cost jobs and lead to industry slow-down for commercial solar

Over the past few weeks, the CEC has been working hard to assess the impacts and respond to the Queensland Government’s recent announcement that the locating, mounting, fixing and removing of solar installations above 100 kW will need to be performed by licensed electricians.

Following consultation with members, we advised the government on 18 April that we expected the cost increase for utility-scale projects to be between 1.5 and 4.5 per cent for a 100 MW solar farm. The lower-end estimates do not take into account the very high likelihood that the labour will need to be fly-in, fly-out, given that most of these projects are based in small regional and rural communities (where the quantity of electricians required will not be readily available). Therefore, we expect that the cost impost will almost certainly be at the higher end of this range.

Over the last week, we have also been working hard to understand the impacts on the commercial solar sector in Queensland, which has grown rapidly in the past year.

We estimate that the commercial solar sector installed between 150 and 250 MW in 2018 (the final figures for 2018 are still coming in). This is up from 100 MW in 2017, and includes installations from factories to retail complexes, schools and public swimming pools.

The new regulation that the government rushed through on 4 April is expected to increase project costs for commercial projects by between 10 and 20 per cent due to the need for mechanical installers to be replaced by licensed electricians.

This will extend the payback periods of many commercial-scale installations from five years to six years, which is likely to make the switch to solar unviable for many organisations and therefore slow the pace of commercial installations in Queensland. This is bad for businesses who are trying to manage their energy costs and bad for Queensland’s clean energy transition.

It will also result in job losses. Around 25 per cent of the crews that currently install solar panels are trained electrical installers, with the remaining 75 per cent being skilled builders, roofers, trained and untrained labourers or those just beginning in the industry. It will not be possible for businesses to continue to employ these labourers in the same numbers if they can no longer handle or mount solar panels.

These changes are occurring with no genuine consultation with the industry and at virtually no notice, which means that many small to medium sized businesses will be out of pocket with virtually no notice from the Queensland Government.

From 13 May, those businesses who already have projects under construction are going to have to have to absorb this extra cost without the ability to pass the unexpected cost increase to their customers.

This costly change is being rushed through without any logical justification for it. If there were a genuine safety risk in trained labourers handling solar panels, then this would apply both for a 99 kW project and a 101 kW project. However, a 99 kW project will not require licensed electricians to mount panels, despite there being no difference in the construction method.

We are continuing to focus considerable effort in communicating the damaging impacts of this regulatory change for the industry, working with stakeholders from a wide range of sectors who are all concerned about this change.

We have called on the government to delay this regulation coming into effect so that a full and proper consultation process can be undertaken and a less costly and damaging approach can be found to addressing the government’s apparent concerns.

Please get in touch with the CEC’s Director of Energy Generation, Anna Freeman, if you have any input to provide on this issue.