The fossil-fuel-fired electricity industry no doubt enjoyed the recent heatwave down south and will enjoy the more frequent heatwaves to come.

They are also no doubt enjoying the confusing and uncertain array of schemes for alternative energy.

The Coalition should do something about this if it is serious about direct action on climate change and about saving electricity consumers very large sums of money. The market on its own will not do the trick, at least initially.

The big problem has been the rise and rise of air-conditioning. The large computers of the 1980s required many workplaces to be air-conditioned. The workers got an incidental benefit. Then it became expected. People started installing it at home.

Slowly the peaks in electricity use moved from breakfast and dinnertime to mid-afternoons on summer weekends when the air-conditioners were going full pace.

The electricity generators have had to build a grid to cope. About a quarter of the average electricity bill goes to pay for the infrastructure to cope with the spikes.

If only more households would install solar panels. The panels produce the most power at precisely the time when air-conditioners are running full pace – hot sunny summer days. (Except in the tropics when air-conditioning is most needed on hot cloudy humid days, but not many people live in the Australian tropics.) Moreover, the solar panels produce electricity at precisely the place it is needed to cope with suburban air-conditioning demand – in the suburbs.

The price of electricity has gone up, but that will merely make people a little bit more conscious of reducing electricity bills by turning off appliances and buying efficient ones in the first place. They won’t turn off air-conditioners on a hot day. But instead of encouraging solar we have an utter mish-mash of eight different state and territory schemes, each applying different prices over different time scales to different sorts of power generation with different sorts of payment plans, each with a varying maximum permissible generation size.

The result has been an array of bewildering advertising hype that would make the average used-car dealer sound like a decent straight-shooter.

(In the following explanation I will treat the “territories” as “states”.)

Five states have “net” systems. Three have “gross” systems. In a “net” system you use the solar power you generate on your roof in your home. Any power you generate that is not used in your home goes to the grid and you get paid for it. In a “gross” system everything goes to the grid and you take all your electricity FROM grid and pay for it, but you are given a credit or cash for what you have provided TO the grid.

Each state has a different payment regime. Some have a set price per kilowatt – as low as 8 cents in Queensland to a high of 60 cent in NSW and Victoria for those who got in early. The price is guaranteed for different periods in each state. On top of this, there are different state and federal rebate schemes which vary according to the size and cost of the system.

After the initial flush to encourage solar, state governments and their utilities have drastically cut the price they pay householders for electricity. They have got away with it because installing solar is still economic now that the cost of panels has plummeted. Electricity generators are now ripping off householders. In Queensland, they pay just 8 cents for power going into the grid, yet charge about 27 cents for electricity taken from it – even though the electricity they get is being produced right in the suburbs where it is being consumed.

All states have now have steadily reducing feed in payments – not exactly the best way to encourage solar. A further discouragement is that all states limit the size of household systems if you want to claim a feed-in credit. Queensland and Victoria are the worst at 5kw and the ACT the best at 200kw.

The gross feed-in system is not ideal. It gives control to the generator who can dictate payment levels Also, if the grid goes down, in an ideal world people should be able to use the electricity they generate. If people can use the power they generate, solar helps natural security as well as the environment by diversifying power sources.

Faced with this, the federal government should sweep aside the state-by-state mish-mash (though there will be squeals for grandfather clauses to preserve benefits when state governments gave very generously to people who took up solar early). In its place should be a national scheme for what is in effect a national electricity grid. The scheme should be a net scheme – you use what you produce off the roof and the balance goes to the grid.

What electricity goes to the grid should be paid for to the householder at exactly the same rate as householders are charged for electricity that comes from the grid. That will keep the generators honest. Besides, it is a fair and self-regulating system. There should be no limit on the size of household solar units delivering into the grid. Roof size will ensure reasonable limits, so why discourage solar generation which will save generating companies the large amounts of money required for infrastructure to meet peak demand.

Regulation of electricity prices should be abolished. Why try to discourage fossil-fuel-generated power on one hand and encourage it on the other by regulated artificially low prices. People on low incomes should get income support to pay for electricity, not lower electricity prices which encourages higher use.

A federal scheme should consider giving tax breaks to household solar electricity generators. While ever government hands out subsidies and tax breaks to big industry for creating jobs why not give them to households too. Such a federal scheme would help competition (between household generators and fossil-fuel ones). Household generators would use their competitive advantages – free roof space, effective tax-free income, small scale operation, and cheap finance through housing mortgages – like any other business.

The scheme would help meet peak demand, thus saving generators the millions of extra dollars it costs to providie for about 40 hours a year of peak demand. The scheme would increase the demand for solar installations thus helping small installation businesses and increasing demand and lowering prices. It would be more effective than mooted schemes to give electricity companies the wherewithal to remotely turn off air-conditioners. After all, if you produce the electricity why shouldn’t you be allowed to use it.

Finally, to help deal with night-time consumption, the federal government should ban halogen light globes, which like Question Time generate more heat than light. Fifty watt globes can be replaced with 5 watt globes. The extra cost of the globes can be recuperated with lower electricity consumption in six to 18 months. Maybe, the pink-batt inquiry might recommend such a thing. The globes are dangerous. They cause fires as well as chew huge amounts of electricity.

Whatever the Abbot Government does with the carbon tax, hardly matters. High electricity costs are caused by the infrastructure needed for peak demand. That will drive the take up of solar more than anything else.

The Government should encourage the trend, even if only on economic grounds –and allow the environment to benefit as a side effect.