"Russell Norman’s inability to understand that a concessional interest rate is a subsidy is bewildering," ACT leader Jamie Whyte says, sharpening his attack on the Greens; controversial scheme to get solar panels installed on 30,000 homes within three years.
The scheme would allow people to borrow up to $15,000 at low interest to cover an install, with the debt being attached to the property, not the person who borrowed the money, and paid back through council rates.
Interest rates should reflect the risk of the borrowers not of taxpayers. One of the purposes of interest rates is to communicate information about risk, the ACT leader says.
"In the Greens' scheme they disguise the actual risk of the borrower. Then they propose to use the expensive machinery of the Local Government (Rating) Act 2002 which will involve Councils in recovering debts that they had nothing to do with loaning in the first place."
It’s bad policy to use the Local Government Rating Act to do debt collections for central Government, Mr Whyte says.
"It would be more honest just to subsidise the photovoltaic (PV) panels directly. But then it would be more clearly an election bribe."
For most homeowners the Greens' PV panel scheme will be bad economics, Mr Whyte says.
He points out that in November 2013 Consumer Magazine reported: “The economics of grid-tied PV don’t stack up – particularly when you include the lack of significant environmental benefits. Our calculations show that most grid-tied PV systems have negative net present value (NPV), which means you’re better off putting your money in the bank.”
"The Greens' PV is also unnecessary. A few consumers are already doing this when it economically stacks up for them and without government assistance," Mr Whyte says.
"What’s more, at least one lines company, Vector, is running its own Sungenie pilot scheme where it provides the panels and equipment at its cost."