Is Australia Foolishly Paying $300 million To Subsidize a $56 million Corporate Solar Plant?

Solar Power Plant in Australia

A solar power plant being built at Moree will use approximately $300 million in government subsidies in the form of loans, grant and renewable energy certificates.

Moree Solar Farm received US$ 77.9 million in funding support from the Australian Renewable Energy Agency (ARENA) and a debt finance commitment of US$ 35.2 million from the Clean Energy Finance Corporation (CEFC).

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The project being developed by Fotowatio Renewable Ventures (FRV) has landed in a major controversy for a lot of subsidies it is getting from Australian taxpayers. It remains questionable if large solar projects should be subsidized by the government when distributed solar energy prices have crashed due to advancements in technology. A 56 MW farm getting $300 million in subsidies makes little sense when a solar plant can be built of $1/watt these days.

Also, read Why is Australia Wasting Money On A $650 Million+ Solar Plant Using A Failed Technology?

The Moree solar farm receiving large subsidies has made it important for the Australian government to revisit the importance of funding such large solar farms in the future. AGL is planning to build large solar power plants and it may not make sense to subsidize them. Another problem is that the Abdul Jameel Group which now owns FRV is planning to build another 100 MW plus solar power plant in Clare and may seek large subsidies for them as well.

The question for Australians right now is should they extend the life of their coal power plants by another 5 years and then focus on solar power which should become much cheaper or subsidize large solar farms built by AGL and solar developers like Jameel Group which are capitalizing on the subsidies given by the Australian government to make large profits?