It was inevitable. The New South Wales solar gold rush is over with the NSW Government suspending the current gross feed-in tariff scheme after it was sold out five years earlier than originally planned.
What needs to happen now is pressure on the government to come up from the other end of the buying spectrum and uncap the feed tariff to cover any amount of energy production and not a limit of 10KW as is the current limit.
This will set commercial farm development on fire and drive solar installation off the roof and onto farms across the state.
The NSW Government is very sensitive on this issue, and if the solar industry calls for reform of the wholesale power market whereby the utilities have to buy all green power at the 15-20 cent KWh level — then that would be the best outcome possible.
The other reform is to allow power coops to be formed via pooled investments that allow solar farms to be developed all over the state in sizes from 50KW-1MW and above. With a timeshare style investment over the Internet used to scoop up all that guilt money in the inner cities.
NSW Labor is extremely keen for a Green preference deal and this is the sort of move that could bed that down. As such the NSW Government has a lot of self interest to be leveraged by the industry.
The NSW Libs will say anything to avoid the issue and will simply spend the next four years selling off the power stations and energy retailers. And the last thing they will do is load them up with low-margin compulsory green power purchasing at the 15-20 cent per KWh level.
The hard truth for the solar industry, the Greens and NSW unions is that the only argument for having a gross feed in tariff above the retail price is to encourage energy savings in the home by giving the home owner skin in the game and therefore a financial reason to bother turning modern low-watt lights off. Thirty cents a KWh is a compromise level for a feed in tariff that could be sold to the government if there is any real heat generated over the issue. Which I doubt there will be beyond the industry and Greens.
The hard reality of rising electricity prices is too hard for any government to ignore and the cost of this scheme was never sustainable above a certain point, and directly highlights the cost of so called direct action. Take note Mr Abbott.
With that all said, I was only saying to my wife this week we should get some more solar … before the scheme is killed. I guess we’ll just have to make do with our current 1.5KW system and the zero bill it generates for us and not actually a credit (profit) on our electricity bill.
But seriously, there is a silver lining in this move if the local industry can articulate to government a bigger vision that goes to the heart of the problem for the renewable energy industry — namely wholesale power purchase agreements that pay real money for the power produced and not the pennies they are currently paying.
A situation that only favours the big power producers and does nothing for fostering a jobs-rich renewable energy industry — based on real numbers and not the tiny amounts home-based systems can supply. And despite what some would have you believe, it does not take a carbon price for this to occur. We can clean up the renewable power market separately from the carbon price issue — if the industry would look beyond the easy money that comes from home owners feeding at another middle-class welfare bucket.
*Simon Mansfield is the publisher of SolarDaily.com
“the heart of the problem for the renewable energy industry” is that it needs such massive subsidies at all. That and the fact that if its contribution ever gets near 20% or more of our electricity generation mix, its intermittency will cause more problems than it solves.
Simon Mansfield has a zero eletricity bill from using his 1.5 Kw system. I have a 2 KW system and am a long way off covering my usage. I am very suspect of these statements. I would like to see their bill to see how much electricity they use and what they turn off in the home to cut their usage.
If a solar installation made a profit selling electricity at the price of the main generator’s fuel saved, it would survive cost-cutting attacks. Moreover the plant would become more profitable with time, as the price of diesel or gas inevitably rises.
Only small communities are still dependent on diesel, but they do represent a big market for a small, expanding solar industry. What is the cost of the diesel fuel component, 30, 40 cents per kWh? Surely, after all these years of hype, that is enough for a solar installation to pay for its capital and still make a profit? The risk is that the diesel plant would be replaced when gas came to town.
As the price of gas rises, the much bigger gas-containing grid will present a more and more attractive target to solar businesses which have started small and grown bigger in the Bush. The risk there is that the gas generating plant eventually gets replaced with fuel-cheap nuclear, and the parasitic renewable gets ditched with it.
What price do you need to make a profit without subsidy?
I can’t understand how a government with so little going for it (Green preferences and all), could be discouraging this sort of future proofing – I reckon every home should have a solar panel to take a load off the generators, who wouldn’t have to burn so much coal, and possibly power up the electric car in the garage – the only losers would be the powerful electricity generators, and what else could they do?
Richard – we have solar hot water (tubes so highly efficient with the mains booster turned off 9 months a year). The house is now fully insulated after a recent renovation. We mainly use a LPG gas heater – with a gas cooktop as well, and we find that those nasty cheap electric oil heaters can be turned off after 30-60 mins and the new bedrooms are warm all night – they are insulated in the floors, ceiling and walls.
All our lights are low wattage and since getting solar panels we have started turning these off a lot more than we did. All up our bills have fallen to near zero. And after years of being cold in winter the house was warm all winter – after we put in lots more insulation in every cavity we good stuff the batts into.
The only reason we did not put more panels on originally as we are pretty maxed out on good positions. But at the price they have got down to it was touch and go to add more.
I still think pooled investment for scalable farms are the way to go.
And yes I completely agree renewables should not be directly subsidized. Non rebate markets are the only the industry will ever stand on it’s own feet. Volume is what will drive prices down – just like it did in its sister industry – semiconductors. However, to get to volume we need to encourage large scale development non the Mickey Mouse ones we put on our houses that create substantial carbon footprints during their installation.