Solar businesses, in a national phone hook-up on Friday, reported that at least five people had already lost their jobs and more were expected to go this week as cancelled orders surge.

From midnight on Tuesday, a family that earns more than $100,000 a year could no longer claim the rebate of up to $8000 on a solar photovoltaic system for their home.

The Clean Energy Council told The Sunday Age that one company had 98% of orders abandoned. The biggest impact has been in cities, where 50-70% of orders were being ditched, leaving companies with millions of dollars of lost business.

As previously noted, this clearly shows the effect of public policy and subsidy for the solar industry. As feed-in-tarriff’s, a mechanism which has produced good results in Europe, is not being aggressively pursued in Australia, this rebate is the only meaningful subsidy for the solar PV industry.

However, all is not lost. The Rudd labour government has announced a Green Loan program.

Around 200,000 households on up to $250,000 a year will be able to take advantage of the program which will offer loans of up to $10,000, with interest capped at the inflation rate, for green products aimed at making established homes more energy and water efficient.

The program would come into effect in January 2009 and run until 2012-13 but Mr Rudd flagged Labor would consider expanding it if it proved successful
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“(This is so) working families can install solar panels or rainwater tanks or roof insulation or solar hot water systems or high efficiency gas hot water heaters … or awnings or grey water recycling systems and energy efficient lighting,” he said.

We need to see how this industry will perform in the coming months and whether there will be a change in policy.