Low-income households and small communities will suffer in the wake of the Federal Government’s decision to scrap small-scale solar power funding, an expert says.

Environment Minister Greg Hunt confirmed that the Coalition had ordered the Clean Energy Finance Corporation (CEFC) to focus its investments on large-scale solar and emerging technologies, shifting away from smaller projects. The move came after the government also put a stop to funding wind energy projects.

The Australia Institute researcher Tom Swann said the impact of retracting subsidies on solar panels for low-income households was concerning, because it was these vulnerable groups that needed it most.

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• Renewable energy target slashed

“These are the households that benefit from being able to reduce their electricity bills, but they don’t have the capital to invest it it (solar power),” Mr Swann said.

“One thing we would like to see is the government provide loans for low-income households, so they can install solar on their roofs and pay it back through their rates or some kind of tax mechanism.

“This is already happening in California and has been incredibly successful, as well as some Australian local councils on a small scale.”

The Federal Government has been accused by Labor of trying to shut down the CEFC by stealth, after ordering it to stop investing in wind and small-scale solar power projects.

Labor’s environment spokesman Mark Butler said the move marked a “dramatic escalation” in the government’s war on wind farms.

The PM says money is better spent on emerging technologies. Photo: AAP

“The government is deliberately trying to make the job of the CEFC impossible in order to achieve what it’s been trying to achieve unsuccessfully through the Parliament, which is to stop it doing its job at all,” Mr Butler said.

Finance Minister Mathias Cormann said the government’s policy position of abolishing the CEFC “was unchanged since before the last election”.

Mr Hunt defended the move, telling ABC’s Radio National on Monday that the purpose of the CEFC was to focus on “emerging and innovative technologies”.

He said the government’s plans were detailed in a letter to crossbenchers that was tabled in the Upper House.

Mr Swann said the government’s scare campaign about the renewable energy target (RET) and the CEFC increasing electric prices, was wearing thin.

He said the reality was the RET actually pushed down electricity costs.

“The Warburton Review of the RET, headed up by businessman Dick Warburton, revealed the affect of renewable energy from the RET pushed down wholesale prices and over the long term, reduced cost to consumers,” Mr Swann said.

Investment at stake

The Climate Council said on Monday that Australia risked becoming a “global pariah” if the Federal Government didn’t step up efforts to tackle climate change.

“Visually unappealing”: Mr Abbott’s views on how wind towers look.

It said with all G7 countries, except Japan, outlining their new emissions reduction targets ahead of the Paris summit, it was clear that most countries saw it in its national interest to take accelerating action.

“This is likely the first time in recent history that Australia has come under such sustained criticism from other countries over its domestic policies,” chief councillor Tim Flannery said in a statement.

The head of Bloomberg New Energy Finance in Australia, Kobad Bhavnagri, said the new directives to stop putting taxpayer money into wind and household solar would make a difficult investment environment even harder.

“I certainly think it makes Australia very unattractive,” he told the ABC.

“And sadly, the conditions created over the last few years, first through the review of the RET … and now this latest move is just an accumulation of factors and evidence that really say and paint a picture that Australia is not really open for business if you’re in the business of wind energy.”

Mr Swann agreed, saying the purpose of the CEFC was to fund projects that were commercially viable, but the financial sector wad not yet comfortable with the financing structure.

“So in a way, this is the government holding the hands of the financial sector and helping them get comfortable with the projects,” he said.

Last Thursday, Denmark found itself producing 116 per cent of its national electricity needs from wind turbines. By 3am on Friday, when electricity demand dropped, that figure had risen to 140 per cent, The Guardian reported.

Inter-connectors allowed 80 per cent of the power surplus to be shared equally between Germany and Norway, which could store it in hydropower systems for use later. Sweden took the remaining fifth of excess power.

Mr Swann said Denmark’s wind power was developing and growing at a fast pace thanks to the country’s political support and community’s confidence to invest.

“They have large levels of investment in local wind farms … and they feel like they are part of the transition while getting the commercial benefits from it at the same time,” he said.

“There are opportunities for Australia to do that too.”

– with AAP