Hughes Gareth: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeHughes Gareth: Oral Questions — Questions to Ministers[Sitting date: 06 November 2014. Volume:701;Page:696. Text is incorporated into the Bound Volume.]3.GARETH HUGHES (Green)to the Minister of Energy and Resources: Is solar energy part of his plan to reach the “ambitious but achievable target of 90 percent of electricity generation from renewables by 2025”?Hon STEVEN JOYCE (Minister for Economic Development)on behalf of theMinister of Energy and Resources: Of course there is a place for solar energy in New Zealand but we have to remember that solar generation is at this stage anyway a lot more expensive than other forms of generation—about three times the cost of grid-scale geothermal or wind generation which of course are also renewable.Gareth Hughes: Does he support decisions made in the last week by Contact and Meridian Energy to cut buy-back rates for new solar by between 50 and 72 percent?Hon STEVEN JOYCE: Of course that is something for the companies to determine but I note that the Greens and others are on the one hand encouraging energy companies to lower their prices and in fact at one stage were proposing regulation to lower their prices and now they seem to be concerned that they are not paying enough for the prices of electricity coming into them. You cannot have it both ways. My understanding is that Meridian Energy for example is saying that its input prices that it is paying for solar is roughly equivalent to what it pays for other renewable resources.Gareth Hughes: Does the Minister think it is fair that families in small businesses who invested in solar to escape rising power bills are dependent on the power companies which can and do keep changing the rules on them?Hon STEVEN JOYCE: I do have some trouble with the member’s logic because if he is concerned about rising power prices then saying that power companies should pay more for the electricity that they buy to sell on to consumers is a little contradictory to say the least especially in the case of Meridian which is 100 percent renewable electricity. So the member seems to be saying that Meridian should go out and deliberately pay more for more renewable electricity and then go out and sell it somehow cheaper to consumers. I would argue that it should be doing its best to keep its costs down and keeping the costs down for consumers.Gareth Hughes: Does the Minister agree that a reliable non-subsidised buyback price between electricity companies and solar homes that does not keep changing at the whim of electricity companies would assist in providing greater certainty for all participants?Hon STEVEN JOYCE: I would not agree necessarily that companies should be forced to pay more for one form of renewable generation than they would pay for another form of renewable generation. If we are excited about renewable generation—I think we should be—then saying to Meridian Energy that it should pay more for a particular type of renewable generation because Gareth Hughes says so seems to me a slightly strange way of going about keeping the price of electricity down for New Zealand consumers.Gareth Hughes: I raise a point of order Mr Speaker. Under Speaker’s ruling 153/6 the Minister has no responsibility for the Opposition. He seems to be putting words into my mouth and to clarify I am not arguing for subsidies or higher prices; I am arguing for certainty and a fair go between the company and the participant.Mr SPEAKER: I invite the member when he gets a chance to reflect on the question that has been asked and then on the answer that has been given. On this occasion the Minister has addressed that question. I accept it may not be the answer the member was expecting but the question has certainly been addressed.Gareth Hughes: So why is the Minister leaving up to the market—which is so imbalanced and sees the big power companies exercise dominant power over Kiwis with solar panels on their roofs—to set the price the terms and the length of contract; and why did the Government not apply the same principle to Rio Tinto and Meridian Energy?Hon STEVEN JOYCE: Well let us just go through this for the member. It does not make any sense except perhaps in the Greens’ view to say to electricity companies: “You should pay more for some element of your electricity.” and try to consider that that is some way of keeping the price down for consumers. Meridian Energy for example is 100 percent renewable energy and if you are suggesting that it should go out there and pay more for one type of renewable over another because of a policy whim well that is fine but it can lead to only one thing and that is higher prices for consumers.Gareth Hughes: Will the Minister consider empowering an independent umpire such as the Electricity Authority to set a fair reasonable and non-subsidised buy-back rate which would increase certainty for solar homes and small businesses investing in clean energy like solar energy?Hon STEVEN JOYCE: No. I think we have an independent arbiter now which is called consumers who want to keep their energy prices down and I would note that the energy component of electricity decreased by 0.7 percent in the last quarter because of the competition that the member decries. Solar does have a place but there is no doubt that currently it is more expensive than other forms of renewable energy and I just cannot see why the member wants to promote that at the expense of say geothermal or hydro. I mean he may have his views on that but actually at this stage anyway it is fine for some people to go out and do it if they want to but actually it is more cost-effective to do things like changing some incandescent light bulbs for some cheaper light bulbs which will reduce the cost of the energy in your house.Marama Fox: Is the Minister aware of the impact of the solar power installation at the Waikaraka Marae in Kaihu which has had dual benefits of saving costs and being environmentally responsible; and what support is available for other marae to take up solar energy as part of the push for renewables?Hon STEVEN JOYCE: I am not aware at this stage of any Government involvement in the installation at Waikaraka Marae. But again I think we have got to be careful in pushing consumers into solar energy at this stage because other forms of renewable energy are less expensive at this time. So I am not sure that it would be an appropriate policy solution at this point to be further subsidising solar when actually we are seeing increased use of hydro and geothermal which are at considerably lower prices currently. In the future that may change—the cost of voltaic cells is coming down—but right now it is not necessarily something that the Government would want to encourage further.