Queensland solar regulation changes lead to court action and uncertainty

Clean Energy Council argues new law will drive up construction costs as Impact Investment Group scheme files Supreme Court action.

A private equity-backed solar scheme is challenging Queenland’s new regulations in court as concerns grow that changes could make new projects unviable.

The Queensland government introduced the Electrical Safety (Solar Farms) Amendment Regulation 2019 (Qld) earlier this month, which altered regulations so only licensed electricians would be permitted to locate, mount, fix or remove solar panels on projects larger than 100 kW. The rules came into effect on 13 May.

The under-construction Brigalow Solar Farm filed an action with the Supreme Court of Queensland on 17 May to challenge the new regulations. Brigalow is owned by the IIG Solar Asset Fund, a vehicle managed by Melbourne-headquartered Impact Investment Group.

IIG is currently raising funds for the Solar Asset Fund, targeting A$180 million ($75.6 million; €67.8 million) to invest in solar assets with exposure to Australia’s National Electricity Market and that have the potential to enter into power-purchase agreements. The fund already owns the Swan Hill Solar Farm and the Chinchilla Solar Farm and held a first close in July 2018 after raising A$55 million.

IIG declined to comment on the legal action or the changes.

The Clean Energy Council, an Australia-wide trade organisation, has come out strongly against the regulations, arguing that the change will drive up costs and lead to longer construction times as developers will have to source qualified electricians.

It argued the installation process is mechanical work that is currently carried out by trained laborers and trade assistants, and that the changes were pushed through with little warning or consultation.

Anna Freeman, CEC director of energy generation, said: “We believe that the new regulation is inconsistent with the Queensland Electrical Safety Act, as it affects activities that are not classified as electrical work under that legislation.

“In our view, this regulation will increase the costs of projects, reduce employment opportunities for local communities, and lead to a downturn in clean energy investment in Queensland, without delivering any safety benefit.”

In a separate statement earlier this month when the rules came into effect, Freeman said that some investment decisions had been “shelved” as a result of the changes. “We have already been told by a number of our members that their projects now look more uncertain due to this new regulation,” she said.

One investor in renewable energy told Infrastructure Investor that the changes were “concerning” and that it was monitoring the situation in Queensland.

The government said in a statement in April that stakeholders in local communities were concerned about unlicensed workers such as backpackers and laborers mounting and removing live solar panels, and that the changes would “enhance safety in the growing commercial solar farm industry”.

Concern has also been expressed by the CEC and investors over the lack of transparency surrounding the determination of Marginal Loss Factors, with several wind and solar projects recently seeing their output de-rated.