Renewable energy supporters say a proposed “solar credit scheme” will artificially inflate renewable energy figures, potentially limiting investment in large-scale projects, and may actually hurt the renewable energy industry.

In a joint statement from the Alternative Technology Association (ATA), Greenpeace and the Moreland Energy Foundation, they said it is imperative the federal government stops its inconsistent and confusing solar power policies, or risk Australia’s solar future.

From mid-year, households installing solar panels will receive “phantom” credits worth five times the amount of energy generated at home.

If they are cashed in, these phantom certificates (issued for energy that has not been generated) will be counted towards the Federal Government’s renewable energy target of 20 per cent of power coming from green sources by 2020.

Brad Shone, Moreland Energy Foundation energy strategy manager, said it would be worse if people cashed in certificates issued for solar panels than if they did nothing.

“People installing solar are actually reducing the amount of renewable energy installed in Australia,” he said. “We would have to recommend that people not claim the rebate available to them for solar, or just not install solar at all. And that is a horrible situation for an organisation like ours to be in.”

Alternative Technology Association energy advocate Damien Moyse said based on today’s figures about 15 per cent of certificates issued for renewable power generation would effectively be fake.

The policy experts also criticised the Government’s decision to include solar hot water systems — which reduce energy consumption, but do not generate power — towards the renewable target. About one in five renewable energy certificates issued in 2007 were for solar water heaters.

The solar credit scheme was a late addition to the renewable target proposal. It was announced in December as a cheaper replacement for the Government’s $8000 solar panel rebate.

The number of certificates issued per kilowatt-hour generated at home will be gradually reduced, ending in 2015. But a Moreland Energy Foundation analysis found the phantom certificates would remain in the system. It found that by 2020 the 20 per cent target would in real terms equate to only 17 per cent of the nation’s energy coming from green sources.

Climate Change Minister Penny Wong’s spokeswoman, Ilsa Colson, said Government modelling showed otherwise — that it would reach the 20 per cent target by 2020. And she said the inclusion of solar water heaters was justified as they displaced gas and electrical heating that uses fossil fuels.

Image of solar hot water on roof in Australia by nicolas.boullosa on flickr under the Creative Commons license