MAIN FINDINGS
This new publication reports on annual direct full time equivalent (FTE) employment in renewable energy activities in Australia for the years 2009-10 to 2013-14.
OVERVIEW
Annual direct FTE employment in renewable energy activities in Australia stood at 12,590 in 2013-14. This figure is an increase of 3,840 or 44 per cent on the employment level of 8,750 recorded for 2009-10. However, there has been a decline of 2,300 or 15 per cent from the peak of 14,890 recorded for 2011-12.
Employment in renewable energy activities is influenced by policies put in place by federal, state/territory and local governments. A description is provided of some key government policies operating during the period 2009-10 to 2013-14 to facilitate analysis.
STATES AND TERRITORIES
In 2013-14 NSW recorded the highest level of annual direct FTE employment in renewable energy activities of any state or territory in Australia, with 2,950 FTE employees or 22 per cent of total employment in renewable energy activities in Australia. Victoria recorded 2,810 or 22 per cent of total employment in renewable energy activities, Queensland 2,520 (20 percent), South Australia 1,330 (11 per cent), Tasmania 1,450 (12 per cent) and Western Australia 820 (7 per cent).
For the years 2011-12 and 2012-13, Queensland recorded the highest level of annual direct FTE employment in renewable energy activities among Australia's states and territories, with 3,820 (26 per cent of the Australian total) and 3,300 (25 per cent of the Australian total) annual direct FTE employees respectively.
Between 2009-10 and 2013-14 all states and territories except South Australia recorded increases in direct FTE employment in renewable energy activities. The largest increase occurred in Victoria, where employment rose by 1,330 (from 1,480 in 2009-10 to 2,810 in 2013-14). In percentage terms, the strongest growth occurred in the ACT where an increase of 425 per cent was recorded (from 120 in 2009-10 to 630 in 2013-14).
Since 2011-12 all mainland Australian states have experienced a decline in annual direct FTE employment in renewable energy activities. The largest such fall was in Queensland, where employment fell from 3,820 to 2,520 between 2011-12 and 2013-14, a decline of 1,300 or 34 per cent. For the same period, Western Australia experienced a fall of 920 (from 1,740 to 820) or 53 per cent. At the same time, Tasmania and both territories experienced rises in FTE employment. In Tasmania annual direct FTE employment in renewable energy activities increased from 1,160 in 2011-12 to 1,450 in 2013-14, a rise of 290 or 25 per cent.
TYPE OF RENEWABLE ENERGY
Among renewable energy activities, employment in roof-top solar photovoltaic modules (PV) (which includes solar hot water systems) made up the largest component of total direct annual FTE employment in 2013-14 with 6,120 or 49 per cent of all such employment. Though employment in this category fluctuated during the period from 2009-10 to 2013-14, it remained the largest single contributor to employment in renewable energy activities for this period. Its share peaked in 2011-12 when employment in roof-top solar PV made up 74 per cent of total direct FTE employment in renewable energy activities.
Employment in hydropower activity was relatively stable throughout the period 2009-10 to 2013-14, recording a low of 1,430 annual direct FTE employees in 2009-10 and a high of 1,810 in 2013-14. Employment in this area increased each year over the reporting period.
Employment in wind power is primarily driven by installation activity, rather than by ongoing operation and maintenance. As a result, this employment is heavily dependent on continuing formation of wind power infrastructure and is relatively volatile. Total annual direct FTE employment in wind power varied in size from a low of 1,110 in 2011-12 (7 per cent of annual direct FTE employment in renewable energy activities) to a high of 2,690 in 2013-14 (21 per cent of the total).
Employment in renewable energy activities located in government entities and in non-profit institutions (NPIs) grew steadily from 480 in 2009-10 (or 5 per cent of annual direct FTE employment in renewable energy activities) to 1,170 in 2013-14 (9 per cent of the total).
TYPE OF RENEWABLE ENERGY, BY STATE/TERRITORY
The composition of employment in renewable energy activities varied somewhat between states and territories. However, for most states and territories, employment was dominated by solar power (which includes roof-top solar PV, solar hot water systems and large scale solar). This dominance was strongest in Western Australia and Queensland where, respectively, 89 and 88 per cent of direct FTE employment in renewable energy activities in 2013-14 was attributable to solar power.
Tasmania is unique among Australian states and territories in that its employment in renewable energy activities is dominated by hydropower. Employment in hydropower activities in Tasmania increased from 840 in 2009-10 to 1,100 in 2013-14 and comprised 76 per cent of Tasmania's renewable energy employment in 2013-14..
KEY POLICY INFLUENCES ON RENEWABLE ENERGY EMPLOYMENT
Levels of employment in renewable energy activities are influenced by a number of government policies, including taxes, subsidies and pricing policies. Policies to enable the achievement of the Renewable Energy Target (RET) have an important influence on the uptake of all types of renewable energy and therefore on employment in renewable energy activities. The RET is comprised of the Large Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES). Uncertainty over the future of the RET, or over the size of the renewable power percentage, is likely to have a flow on effect on future investment in renewable energy infrastructure.
The feed-in tariff (FiT) is another important influence on employment in roof-top solar PV activities. A FiT is a pricing arrangement under which an electricity supplier pays a customer for electricity that is generated by a solar PV system owned by the customer and exported (i.e. ‘fed-in’) to the grid. The FiT varies significantly over the time series presented in this publication, and between states and territories. During 2009-10 and 2010-11, the FiT paid to customers in most states and territories was higher than the normal wholesale cost of electricity generation, and sometimes in excess of the retail price of electricity. Commencing from 2011-12 significant reductions in FiT prices were introduced in the majority of states and territories. These reductions coincide with significant falls in new installations of roof-top solar PV systems and in associated employment.
The amount of the FiT and its conditions of operation varies significantly over the published time series and from state to state. One important condition of the FiT is whether it is paid on a gross or net basis. A gross FiT applies to the full amount of electricity produced by the customer while net FiT applies only to the excess of the customer's production over their consumption.
The following paragraphs summarise the operation of FiT arrangements within each state and territory over the time series of this publication.
The NSW Solar Bonus Scheme introduced a gross FiT for energy generated from a roof-top solar PV system of less than 10 kW in capacity. This scheme commenced on 1 January 2010 with a FiT of 60 cents per kilowatt hour (kWh). In October 2010, this gross FiT was reduced to 20 cents per kWh and in April 2011 the Solar Bonus Scheme was closed to new applicants. Since April 2011 NSW has not mandated a minimum FiT. Instead, the NSW Independent Pricing and Regulatory Tribunal (IPART) has made a benchmark assessment each year since 2011-12 of the value of electricity provided by electricity customers back to the electricity retailer. However, retailers in NSW are free to set their own FiT and need not observe IPART's published benchmark range. IPART's benchmark range for the FiT was 8 to 10 cents per kWh in 2011-12, 7.7 to 12.9 cents per kWh in 2012-13 and 6.6 to 11.2 cents per kWh in 2013-14.
Victoria commenced a Premium Feed-in Tariff late in 2009, which offered 60 cents per kWh on a net feed-in basis, for systems of up to 5 kW capacity. This scheme was closed to new applicants at the end of 2011 and was replaced by two schemes: the Standard Feed-in Tariff scheme and the Transitional Feed-in Tariff scheme. The former scheme applied to systems of up to 100 kW capacity and offered a one-for-one rate matching the current retail price of electricity. The transitional scheme offered a minimum of 25 cents per kWh net FiT and applied only to schemes of up to 5 kW capacity. The Standard Feed-in Tariff and Transitional Feed-in Tariff schemes were closed to new applicants on 31 December 2012.
The current Victorian FiT scheme commenced on 1 January 2013 and applies to eligible renewable energy systems of less than 100 kW capacity. It provides for a minimum net FiT as determined by the Victorian Essential Services Commission (ESC). This minimum FiT was set at 8 cents per kWh for 2013 and 2014.
The Queensland government commenced a Solar Bonus Scheme in 2008 that paid 44 cents per kWh on a net FiT to customers with a roof-top solar PV system of less than 5 kW capacity. This scheme was closed to new applicants on 9 July 2012 and replaced by a net FiT of 8 cents per kWh.
South Australia commenced a net FiT scheme in July 2008 that paid 44 cents per kWh and was open to customers consuming less than 160 mWh per annum. A reduced net FiT of 16 cents per kWh was introduced on 30 September 2011. Commencing from 1 January 2013, the FiT is determined by the Essential Services Commission of South Australia and is presently set at 6 cents per kWh.
Western Australia started a FiT scheme on 1 July 2010 under the renewable energy buy-back scheme. This was a net FiT arrangement under which the state government contributed 40 cents per kWh and a further 7 cents per kWh was paid by the customer's electricity retailer (either Synergy or Horizon Power). This scheme was closed to new applicants on 1 August 2011. The FiT is now determined by the Western Australian electricity retailers, Synergy and Horizon Power. Horizon Power, for example, offers a different FiT for different customers based primarily on the location of customers.
Tasmania operates a net FiT scheme which commenced with a FiT of 27.785 cents per kWh. This scheme was closed to new applicants on 1 September 2013. For renewable energy systems installed between 1 September and 31 December 2013 a transitional FiT of 8.282 cents per kWh applied. From 1 January 2014, the FiT is determined by the Tasmanian Energy Regulator and was set at 5.551 cents per kWh for the period 1 July 2014 to 30 June 2015.
The Northern Territory operates a gross FiT arrangement. The FiT has been relatively stable within the Northern Territory for the time series contained in this publication.
The ACT maintains a gross FiT scheme. The scheme commenced on 1 March 2009 and initially offered a FiT of 50.05 cents per kWh for systems with a capacity of up to 10 kW and 40.04 cents per kWh for systems larger than 10 kW and up to 30 kW capacity. For systems installed between 1 July 2010 and 31 May 2011 and with a capacity of up to 30 kW the applicable FiT is 45.70 cents per kWh. As of 14 July 2011 the ACT ceased to regulate FiT rates for roof-top solar PV systems and rates are determined by the electricity retailers operating in the territory. At present, the FiT offered by electricity retailers in the ACT varies between 6 cents and 7.5 cents per kWh.
Local government policies also have the potential to influence employment in renewable energy activities. For example, both Hobart City Council and Brisbane City Council have offered rebates on the installation of a new solar hot water systems. The ACT Energy Wise Program offered rebates to homeowners and tenants undertaking energy saving improvements to their residence, including the installation of solar hot water systems. Some councils offer no interest loans to install roof-top solar PV systems, for example, Darebin City Council offers such a scheme to eligible pensioners.
The net effect of the interaction of federal, state/ territory and local government policies with regard to the renewable energy thus varies by location and over time.
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