A future where Australia’s power needs are met by renewable energy sources will demand substantial alterations to the way that electricity is generated and distributed. This point was recently highlighted in an editorial in the Sydney Morning Herald by Matthew Wright, executive director of Melbourne-based thinktank Beyond Zero Emissions, who described how rooftop solar power could actually be a benefit to the electricity grid and, ultimately, the average electricity user.

Solar power’s place on the electrical grid

Residential solar PV system incentive policies have been given a bad rap, especially in NSW, where an overly ambitious Solar Bonus Feed-in Tariff Scheme and the drama surrounding its hasty and badly-planned implementation have left a bad taste in the mouths of many. However, as Solar Choice has pointed out previously, poor policy-making does not reflect the viability of the technology itself (which does have a good reputation amongst Australians). There are numerous examples of Solar Feed-in Tariffs being implemented effectively throughout the world–most notably in Germany, where a scaled and measured approach to subsidisation has enabled the country to become a solar world leader in spite of its sub-optimal climatic conditions. Solar power can be effectively integrated into the electricity grid, to its benefit.

Distributed generation: Solar PV everywhere

A major benefit of distributed generation such as rooftop PV (as opposed to centralised generation in the form of large-scale generation plants) is the reduction in the costs of peak energy demand. A phenomenon termed the ‘merit order effect‘, recently discussed in a research paper published by the University of Melbourne’s Energy Research Institute, explains how different forms of electricity generation should be prioritised to meet demand. Under the merit order effect, sources with the lowest marginal cost per kWh would be brought online first, followed by more expensive forms of generation. Where solar PV generation is concerned, this means during periods of peak demand–most notably late afternoons in the summer, when home air-conditioning units are at full throttle.

Marginal cost of energy: fossil fuels vs solar power

Such high-demand events have a disproportionate influence on the average cost of electricity–up to 30% of the cost of power as shown on your bill at home is attributable to a handful of these extreme peak periods across the course of a single year. This is primarily due to the fact that, conventionally, the sources of electricity that meet this peak demand, such as gas-fired power plants, have a high marginal cost–as much as $12.50/kWh. This is partly because energy retailers can use their position in the market to charge higher rates to put their plants online when needed most. As Wright comments, “The reason customers were getting an average price under the state (feed-in tariff) programs is because it’s too difficult for ordinary home owners to set up a trading desk and participate in the national electricity market.” Instead, Feed-in Tariffs simplify the matter by setting a flat rate for solar, making it easier for owners of small-scale generators to understand and rely on.

In addition to the cost of generation, there are also additional infrastructure costs associated with the construction of ‘peak’ plants and maintenance and upgrades of the network infrastructure (‘poles and wires’) required to deliver this power over long distances. In contrast, a Solar Feed-in Tariff guarantees a price for power that, once implemented, does not increase as time goes on; 1kWh of solar energy fed into the grid on a 44c/kWh Solar Feed-in Tariff will never cost more than that.

Solar power: modular generation distributed across the grid

Solar PV systems, once reaching a high level of grid penetration, have the ability to confront the electricity price issue on several fronts: They are a modular, scalable, and proven electricity generation source that can be deployed gradually over time (as opposed to in a one-off investment in a centralised plant); they reduce the need for transmission of electricity over long distances (electricity from solar systems connected to the grid is generally used by homes and buildings nearby); and if connected to the grid on a net feed-in tariff, they reduce overall demand by becoming a home’s primary electricity source (electricity is drawn from the grid only when consumption exceeds production).

Realising the benefits of solar requires vision and willpower

The take-home point made by Wright in his SMH editorial is therefore that, with a bit of holistic vision, drive, and willingness to change the status quo, the Australian state and Federal Governments could protect electricity users against the spectre of rising electricity prices whilst simultaneously smoothing a transition to a clean energy economy. The advantage of a Solar Feed-in Tariff as a policy instrument for achieving these goals is precisely what has given it such a bad reputation in NSW–its cost. While electricity purchased from conventional fossil fuel sources in order to generate 10kWh of energy can cost in the order of $120, an equivalent amount sources from rooftop solar PV on a feed-in tariff rate of, for example, 50c/kWh (lower than NSW’s now defunct scheme but higher than Queensland’s existing one), would cost only $5. According to the University of Melbourne’s findings, the projected savings would be enough to cover cost of the NSW government’s electricity price support scheme for low-income households.

Reaching the level where this benefit could be realised would require rooftop solar PV on a broad scale, however. Although PV prices are reaching all-time lows, attractive Feed-in Tariffs for solar such as those in Queensland, South Australia and Victoria would provide a significant incentive for households to go solar.

© 2011 Solar Choice Pty Ltd

Australia’s installed solar power capacity has grown 35 times what it was in 2008, according to a report (pdf) recently released by the Clean Energy Council of Australia. The report covers the growth of renewable energy generation across Australia (currently standing at 9.64% of all generation) in the 2010-2011 financial year. The approximately 1 million solar photovoltaics (PV) systems installed throughout the country produced 2.3% (at 680 gigawatt-hours (GWh)) of Australia’s renewable energy.

Australian renewables on track to reach 20% by 2020

Renewable Energy in Australia--Breakdown of components. (Source: Clean Energy Council)

According to the report, Australia is on track to reach but not greatly exceed its commitment under the Federal government’s Enhanced Renewable Energy Target (eRET) of 20% of all electricity production being sourced from renewables by the year 2020. At the moment, the majority of renewable energy is sourced from hydropower, followed by wind, then bioenergy. Solar PV, for all the media attention poured upon it, comprises only a small part of Australia’s renewables portfolio.

Small-scale solar PV cumulative installed capacity by year in Australia. (Source: Clean Energy Council)

Solar PV installations on the rise

Solar PV has nonetheless seen significant growth since the 2008, when the country had a mere 29 megawatts (MW) of solar PV capacity installed. Australia now has a total installed capacity of 1031MW (1.031GW–about 0.04kW per capita). This increase is in line with the global trend for solar power, which has seen enormous growth in the last 5 years. By comparison, the world leader in installed solar PV, Germany, has more than 17GW (17,000MW–about 0.2kW per capita) of installed capacity. Despite the speed of the Australian solar industry’s expansion, Australia still did not make the list of top 10 “solar countries” for 2010. (See infographic at bottom of page. N.B. Keep in mind that the PV industry is growing at breakneck speed, and figures of cumulative capacity quickly become out of date, with record-keeping inherently incapable of tracking installs in realtime.)

Uptake of small-scale PV in Australia was driven by generous state-level solar feed-in tariff incentives (many of which have since been withdrawn), as well as the federal incentives such as the Solar Credits rebate scheme. Increased demand in combination with the strong Australian dollar and a glut of supply of solar system components has seen the price of systems drop to an all-time low, with Solar Choice witnessing some system prices coming in as low as an unprecedented 66c per watt. (Request a free Solar Quote Comparison of solar installers in your area.)

Solar PV and financial benefits for individuals

PV systems cannot be installed on all buildings. However, according to the report, of those that are PV-suitable, approximately 8% have already had a system installed. This is an impressive level of PV saturation for such a short period of industry growth. What sets solar PV apart is that from other forms of renewable energy is that it is one of the only sources that can be deployed on a building level and provides a direct financial benefit to homes and businesses.

Solar PV systems, in states with a feed-in tariff, offer the double benefit of both electricity bill credits acquirable from the power that a system feeds into the grid, plus electricity bill ‘offsetting’–avoiding electricity bill costs by using power direct from the system (as opposed to purchasing it from the grid). Even in states with no feed-in tariff in place (such as NSW), with electricity prices on the rise, solar systems are becoming increasingly attractive investments. In the bigger picture, the decentralised nature of PV systems also means that grid-connected solar households have the ability to time and control electricity consumption, thereby potentially mitigating the need for electricity distributors to build additional conventional (i.e. coal-fired) power stations to meet peak demand.

© 2011 Solar Choice Pty Ltd

Top 10 Solar Countries for 2010. Figures may not accurately reflect 2011 installed capacity. (Click to enlarge. Source: 1bog.org)

The Australian Energy Market Commission (AEMC) has released a comprehensive review of the future of electricity prices across Australia. This report lends substance to speculation about the topic of energy prices the media. Factoring in the Federal government’s recently introduced Carbon Price (set to take effect from April 2012), the average price of retail electricity in Australia is expected to rise by 37.2% (22% in real terms) by 2014.

Despite media sensationalism, solar not a major cause of increases

Solar is often painted in the media as having a major impact on the price of retail electricity. Although solar feed-in tariff schemes (the cost of which is in many cases distributed over and paid for by an electricity retailer’s customer base) are expected to contribute to the price rises, their effect is expected to be relatively insiginificant: 2.8% nationally. Even South Australia, which will see the biggest increase due to a solar feed-in tariff anywhere in the country, only 6.6% of the rises will be attributable to the state’s feed-in tariff incentive scheme.

Percentage of price increases due to solar feed-in tariff schemes by state:

National: 2.8%

ACT: 3.9%

VIC: 0.7%

SA: 6.6%

WA: 0%

QLD: 0.2%

NSW: 6.1%

TAS: 0%

NT: 0%

Electricity price increases come mainly from rising wholesale energy and distribution costs

Rising electricity costs have been a cause for concern across the nation–most notably in NSW and Victoria, where disconnection complaints have reached record levels. Contrary to the perception that solar feed-in tariffs are a major factor in the growing cost of electricity, the bulk of the price rises are expected to come from two sources: the rising price of wholesale electricity (which includes the effects of the Carbon Price)–40% nationally, and the cost of distribution–33.6% nationally.

The other factors influencing electricity price are:

-Transmission (6% contribution nationally): “Driven by increasing investment to meet growing maximum demand, and higher commodity prices.”

-Retail (12.1%): Calculated as a “percentage of the total cost to supply residential customers”, expected to grow as the price of other components rise.

-Large-scale Renewable Energy Target (3.8%)

-Small-scale Renewable Energy Target (-0.8%): This is the mechanism through which Solar Rebates/Credits in the form of Small-scale Technology Certificates (STCs) are created. STCs provide an up-front rebate on the cost of a solar PV system.

-Energy efficiency and demand management schemes (2.5%).

-Other state-based schemes (only in Western Australia: -0.2%).

What implications does this have for the solar industry?

For those who install grid-connect solar–even in states with no feed-in tariff such as NSW–considerable savings await households that time electricity usage to coincide with PV system generation periods. The steady rise of the price of electricity means that small-scale solar PV systems will become an increasingly worthwhile investment–especially considering that their price is already at an all-time low in Australia.

Solar Choice, as an impartial brokering service with a bird’s eye view of the residential and solar PV markets, has seen prices drop as much as 50% (to as low as 66c per Watt) for all sizes of solar PV systems over the past year. The low prices are attributable to a glut of solar system components on the market and fierce competition between installers working hard to find customers after the collapse of generous state incentive schemes. As a result, the low cost of solar is not expected to last forever. In the meantime, however, going solar is a smart financial investment for those who want to protect themselves against rising electricity bills.

How much will electricity prices rise in each state, and why?

Electricity Price Increases in Australia to 2014 (AEMC)

The reasons for price rises in each state vary, but it is safe to say that network costs and wholesale prices comprise 70-80% of the electricity price rises in each state. Click the links below to see the details for each state, including the actual expected price of electricity in the years to come.

It is important to note, as the AEMC does, that the figures below are projections only, based on assumptions that may or may not be correct. As a result, the actual increases may vary as time goes on. It seems clear, however, that the general trend of rising retail costs due to rising wholesale and distribution costs are set to continue.

All Australia – ACT – VIC – SA – WA- QLD -NSW- TAS – NT

All Australia

Australian Capital Territory

Victoria

South Australia

Western Australia

Queensland

New South Wales

Tasmania

Northern Territory

© 2011 Solar Choice Pty Ltd

Resources and links:

Australian Energy Market Commission: Retail Electricity Price Estimates – Overview (pdf)

Brisbane is the capital of Queensland as well as the state’s most populous city. All of Queensland is famous for its sunny weather, and Brisbane is no exception, with an average of 5.4 peak sun hours throughout the year, making it an ideal location for installing solar power. In addition to the state’s natural blessing of abundant sunshine (or possibly in recognition of this), the Queensland government offers the most generous support for solar power in the country, at 44c per kilowatt-hour (kWh) on a net feed-in tariff.

Solar Choice Solar Panel Quote Comparison for Brisbane

The following is an example of a Solar Choice Solar Quote Comparison for the Brisbane area (postcode 4000). For the sake of confidentiality and to maintain our commitment of impartiality with regard to our installers, key details–such as the the names of the accredited solar installers and the total cost of the systems on offer–have been removed. However, by filling out the Quote Comparison Request form to the right of this page, it is possible to instantly receive a full, unedited, and up-to-date version of the document.

Solar Choice is Australia’s free, nation-wide Solar Brokering and Solar System Installation Quote Comparison service. Solar Choice specialises in impartially comparing and assessing solar power system prices and installers throughout Australia,  advising our customers and assisting them in determining what size system and which type of components will best suit their needs. Our customers’ receiving an automated Solar Quote Comparison is usually the first step in this process, providing a snapshot of the solar market in their area. (Read more: An overview of Solar Choice’s personalised brokering service.)

What information does the Brisbane Solar Quote Comparison contain?

-Brisbane Solar Installer names and website details. Up to 7 installers may be included.

-Prices for 1.5kW, 2kW, 3kW, 4kW, 5kW, and 10kW systems from Brisbane solar installers in our network (if offered–some installers do not install larger systems, or may only quote on request)

-Solar panel information: number and capacity (usually in the format e.g. “8 x 190 watts”), brand, technology (monocrystalline, polycrystalline, or thin-film), country of manufacture, applicable solar warranties, and (if not part of a package deal) the price.

-Solar inverter information: Rated capacity, brand, country of origin, applicable warranties, and cost (if not part of a package deal)

-The amount of your Solar Choice discount–this discount is available exclusively through Solar Choice, and guarantees a better deal than going direct to the installer

-The value of the federal Solar Credits applicable for the system, and therefore what discount you are entitled to through the federal Enhanced Renewable Energy Target Scheme

-Each installer’s required deposit amount

-A range of possible extra charges or options: oversized inverter option, possible additional costs for tile roofs, 2-story homes, tilt-frames, electrical cabling, meter installation, travel fees, or ground-mounting solar arrays

Download a sample Brisbane Solar Power System Quote Comparison

Click to download a sample of a Solar Quote Comparison for Brisbane (pdf)

(Top image via Wikipedia)

In addition to the obvious benefits of having a solar PV system installed on your home, shed, or office–savings on electricity bills, a carbon emission-free power source, and the envy of your neighbours–going solar could also potentially increase the value of your property. There are two primary reasons for this, both of which are fairly obvious: a reduced cost of electricity and a favourable perception of solar power with the Australian populace.

How does solar impact the value of a home? Ask the buyer.

Perceptions of solar power: Overwhelmingly positive

In most places the value of a home is based on market principles: How much would a potential buyer be willing to pay for it? The answer to this question in turn depends on what the house or property has to offer, and what is of value to the customer. Not everyone has the same preferences, of course, but there are perceptible trends that can be observed in public sentiment–and solar power seems to have the approval of the public, according to a survey undertaken in September of 2011. In the UMR survey, 8 in 10 people reported having a positive view of solar energy, with only 2 in 10 having a negative perception of power from the sun. Solar also topped the list of popular renewable energy sources.

Of course a survey is just a survey and should not automatically be taken as fully representing public sentiment, but these results do indicate that solar power could potentially impact on the price of a property in a positive way.

The financial benefits of buying a solar home

Although the survey did not delve into the particulars as to why solar has attained such a good reputation, it is fairly safe to guess that the fact that solar PV is a silent, (usually) discreet, and pollution-free form of energy is a big part of it. There are, of course, also the more tangible financial benefits a system provides homeowners, especially with the incentives currently on offer in Australia–up-front solar rebates in the form of RECs/STCs from the Federal Government, and (depending on your state) Solar Feed-in Tariffs that offer ongoing savings–or possibly even income–thanks to your solar energy generator.

Unfortunately, solar feed-in tariffs are not inheritable in every state: If you buy a home with solar panels in NSW, you won’t inherit either of the previous 60c/kWh or 20c/kWh Feed-in Tariffs under the now defunct Solar Bonus Scheme, but home buyers will be able to inherit South Australia’s 44c/kW FiT. Even in the absence of Feed-in Tariffs, however, solar will still save you money on electricity, especially if you are careful with the timing of your electricity use. All other things being equal, someone in the market for a home would most likely opt for a home with a solar array–grid-connected systems are virtually maintenance free (=no headaches) and promise to reduce electricity bills.

The search for Australian data…

The opinions in this article are just that, and there is currently no solid data about solar’s ability to drive up home value in Australia, but what is ‘in’ in the real estate market, like other markets, is always subject to fluctuation. Even so, US ‘solar power services’ company SunRun has compiled a list of resources that point to the ways in which solar power installations have contributed to a rise in home value in homes in California and other US states. The company has also published a comprehensive and well-referenced report (pdf) that outlines some of the stats and trends that can be observed in the American real estate market. According to the report, homes with solar sell faster and have higher property value due to their ability to deliver lower electricity bills. To back up the claim that this is not a phenomenon restricted to California, the EU Energy Agency has also suggested that solar panels, as a low- or zero-maintenance energy production plant, can only add to the value of a home and whose value should be taken into consideration in deciding the size and terms for home mortgages.

Given the rise of positive public sentiment towards solar and the obvious financial benefits in Australia, it seems unlikely that a home’s having solar panels would be a disincentive for future prospective buyers. It’s difficult to say just how much, and ultimately the determination is of course up to the reader, but it seems likely that, as in California, the presence of a solar installation will be of benefit and not detriment to an Australian home-seller.

Written by James Martin

SMH, “Solar Power tops poll of positive perceptions”

SunRun, “Solar Systems Can Increase Home Value”

RenewableEnergyWorld.com Blog, “Do Solar Systems Increase Property Values?”

The possible near-future conclusion for Queensland’s generous 44c per kilowatt-hour (kWh) Solar Bonus Feed-in Tariff has been a topic of speculation as of late. So far, there is no official source indicating that the state’s incentive scheme will be ending any time soon, but a number of issues–notably the budgetary situation in the state (and pursuant political situation), talk about the less-than-adequate ability of current electricity grid infrastructure to absorb a massive uptake in solar-generated electricity input, and a lack of coordination and will at the top to tackle the problem holistically could possibly result in a reduction or cancelation of the scheme by the next election, which will be held by March 2012. This article attempts to cut through some of the speculation to dissect some of the actual issues confronting the scheme.

Queensland Solar Bonus Feed-in Tariff: Where is it headed?

The original purpose of the Queensland Feed-in Tariff, like all state feed-in tariffs, is to encourage the uptake of (usually) small-scale solar power generation units in order to grow the local solar power installation industry, facilitate the attainment of the state’s 250 megawatt (MW) Renewable Energy Target (already surpassed 3 years early), and to reduce the state’s carbon emissions (although these reasons are all intricately intertwined). Queensland’s scheme began without an application end date or a capacity cap (most other states had one or the other). Feed-in Tariff schemes like the one in Queensland are intended to be wound down as economies of scale evolve and the cost of solar power comes down. The price of installing solar has indeed come down, but slightly lower-than-the-national-average electricity prices in the Sunshine State mean that grid price parity will be a bit longer in coming than it has been in other states (notably rural NSW). Subsidies designed to support a nascent industry are usually, by their nature, phased out as that industry reaches maturity (or abruptly and rudely dropped in their entirety as was the case in WA and NSW). Such will also be the case in Queensland. The most pertinent questions to ask are ‘When?’ and ‘How will the government handle the transition?’

Queensland’s budget woes: the ballooned budget for state health payroll software

One issue that may affect the Queensland Solar Feed-in Tariff’s future stability is the unexpected inflation of the price of a contract with IBM to instate a better-automated state healthcare payroll system from $6.19 million to a budget-busting $208.7 million spread over the next 3 years, dwarfing expenditures for a number of medium-sized projects outlined the budget. This foul-up has resulted in a rise in negative sentiment towards the otherwise popular Premier Bligh’s Labour government, and there is speculation that the next election, to be held sometime between now and March 2012, will end in victory for the less renewables-friendly opposition.

There is also the issue of where how the cost of the Solar Bonus Scheme is being paid for. Unlike, for example, South Australia, where the retailer’s contribution (6-8c/kWh) and the state’s contribution (16c/kWh) are clearly outlined, the allocation of funding for the Solar Bonus Scheme is not clearly outlined in the State’s 2011-2012 budget. Nigel Morris, director of Solar Business Services, has attempted to extrapolate how the Solar Bonus Scheme is paid for, but has yet to find a clear and definitive answer, despite thorough inspection of the state’s budget documents. This could mean budgetary sleight of hand whereby the cost is internalised by the state-owned electricity distributors at the request of the state government, according to Morris. An email he sent to the energy minister in regards to this matter has not been returned.

The electricity grid and solar power feeding-in: Yes, there is is a limit, but we’re still a long way off.

Now to the putative issue of the grid’s ability to accept electricity from small solar systems. The Sunshine Coast Daily recently published an article pointing out that some sections of Queensland’s ageing electricity grid will be unable to handle ‘feeding-in’ from solar power generation systems over a certain threshold of saturation in the grid. In a nutshell, transformers on the electricity grid are limited in their ability to ‘absorb’ and put to use power from small-scale systems; there is a ‘solar saturation point’ after which problems could begin to develop in sections of the grid.

The areas most likely to be affected by the transformer issue will be areas at the further reaches of the electricity grid that have high solar penetration. The percent of solar penetration will vary from area to area, but high solar penetration could have the greatest impact in areas with low populations at the end of electrical spur lines. These areas require electrical substations to ‘ramp up’ voltage levels and ensure that the requisite voltage levels are being met, and generally have relatively narrow ‘pipelines’ through which the electricity can flow. A sudden influx of power could potentially push voltage levels above the level than the grid can handle, blowing transformers out in the process. Urban areas with antiquated grid infrastructure may also be susceptible to this issue, but as the infrastructure tends to be better in cities it is less of an issue.

In any case, according to Morris, although the transformer issue is indeed a real one, it is as of yet only a potential one, as the threshold is 30%, while solar power penetration is currently at less than 1% across the state. Another perspective is that solar power is being made the scapegoat for the larger issue of antiquated nature of the current electricity grid infrastructure. If Australia–and Queensland–are truly to have a clean energy future, solar’s integration into the grid will have to be approached holistically, and the emerging technology cannot be written off in its entirety as flawed just because it does not integrate perfectly with old infrastructure.

Some potential solutions: Localised feed-in tariffs or Smart Grids

The problem of oversaturation is an issue that would ideally be dealt with preemptively, though this is unlikely given the nature of the political cycle and its inherent pressures on decision-makers. Supplying remote areas with grid electricity can be expensive; voltage drops in the wires as distance increases, requiring ‘ramping up’ at electricity substations to maintain the requisite voltage levels for household use. Distributed generation by small-scale power stations like solar systems can actually be of benefit to the electricity grid, provided the solar is installed in remote areas to which it is expensive to send electricity generated at conventional, centralised power stations.

One of the main problems at the moment, says Morris, is the disjunct between where the grid could benefit from solar and where it is currently commercially convenient to do so–and no one is holding the reigns at the top to harmonise these needs. “The community mindset wants solar, but not necessarily where the grid needs solar.” Solar installers are concentrated in population centres, where grid infrastructure tends to be sturdy and dependable, and therefore would benefit less from what distributed generation has to offer. There are a two potential solutions for this issue.

One option would be to design a localised feed-in tariff system to incentivise solar where the grid could benefit most as opposed to having a blanket, state-wide feed-in tariff like the one currently in place. However, determining where these areas are and how much the Feed-in Tariff rate should be in each area is not a simple task. In fact, when IPART considered at implementing such a system in NSW, it was written off as ‘too complex’ (and therefore ‘inconsistent with the terms and conditions‘ (see page 27) of the review) to undertake.

If not localised feed-in tariffs, the other option would be to upgrade the electricity grid itself to a ‘Smart Grid’ system that would track and manage electricity supply and demand automatically. This would, however, be a massive project that would take an impressive amount of political will, coordination, and capital to implement. These three things are unlikely to be mustered at present. The fact that Smart Grid technology is still fairly new and experimental means that the Queensland government is unlikely to roll it broad-scale without first testing it in localised areas.

The future of Solar Power in Queensland: Still bright

Despite the complications, the solar power installation industry in Queensland will hopefully be able to survive even when the state’s Feed-in Tariff is eventually reduced or withdrawn. This is not to say that the industry does not need support–in recognition of this fact, Victoria and South Australia wisely chose to offer transition scheme rates of 25c/kWh and 22c/kWh, respectively. While less than hoped for, these still offer a significant incentive for homeowners to install solar, and a fighting chance for the solar industry.

With electricity prices slated to rise nationally while the price of solar power reaches all-time lows globally, solar is expected to become a more and more economically sensible option for households in Queensland and across the country. Although two short-term issues that could potentially disrupt this trajectory would be a drop in the value of the Australian dollar (making imports more expensive), and a drying up of the current oversupply of solar system component stock in Australia, the in the long-term, prices are expected to continue to fall. With any luck the federal and state governments will find more strategic and intelligent ways to integrate solar’s potential into the electricity network.

Considering the problems and potential solutions outlined as they are above, it seems highly unlikely that the Queensland Solar Bonus Scheme will carry on ad infinitum (those who sign up are entitled to continue receiving their tariff until 2028, however). The hope of the solar industry is that when the 44c/kWh rate is cut, there will be a replacement scheme in place that provides a soft landing.

Written by James Martin

Analyst

© 2010 Solar Choice Pty Ltd

Resources and Links:

Delimiter, “Payroll problems overshadow Queensland budget”

Sunshine Coast Daily, “Uncertain future for solar energy”

Independent Pricing and Regulatory Tribunal (IPART) issues paper, “Solar Feed-in Tariffs: Setting a Fair and reasonable value for electricity generated by small-scale solar PV units in NSW” (pdf)

Read more Solar Choice articles about Solar Power in Queensland

Related Solar Choice articles:

- Townsville Solar Community

- Mackay Solar Community

Solar Choice is in the process of organising a Solar Community in Townsville, Queensland. Residents of the Townsville area are encouraged to take advantage of a special bulk discount rate on solar power systems by putting forward the local community’s collective bargaining power. Solar Choice has experience running Solar Communities for other regional areas throughout Australia and in Queensland–in particular around Gympie, Bundaberg, and Hervey Bay. We are able to negotiate with a range of local, regional, and national installers to broker the best possible deal for members of the local community. Inquire about getting solar power and how to become part of the Townsville Solar Community today!

The Greent Solar Cities Project for Townsville, Queensland showcases sustainable design features, including solar photovoltaic (PV) panels.

Solar City Townsville is already fertile ground for solar power

Townsville, as one of Australia’s 7 Solar Cities, is already home to a number of solar power-oriented projects. The aim of the Solar Cities program is to encourage the reduction of wasteful energy usage, promote solar energy usage and cut greenhouse gas emissions through a number of initiatives funded by the Australian federal government. These initiatives are collaborations between Citisolar (Townsville City Council’s community capacity building program) and businesses partners to realise the potential that solar power offers areas with abundant sun such as the Queensland coast. The Solar Cities project has funneled government investment money into a number of showcase development projects, such as the Rocky Springs and Riverway residential developments, which showcase how energy efficiency can be used in conjunction with solar power, and the green^t project, an environmentally sustainable building on display in the Townsville CBD.

Townsville already has the title of Solar City in name, and with 300 days of sunshine per year and 5.3 megawatts of solar already installed, it stands a good chance of becoming a Solar Capital as well. It makes perfect sense for residents to take advantage of their beautiful city’s most abundant natural resource and go solar.

What is the Townsville Solar Community, and how will I get a discount on solar power?

The Townsville Solar Community is a group of Townsville residents who pool their collective bargaining power to in order to get discounted rates on solar power systems from installers in the region. Solar Choice will enter negotiations with a number of solar power installers to narrow down the choices to the installers who are able to offer the best combination solar power system components and prices. The installers who will comprise the network in the end will be a combination of local and national installers, and each individual household will be able to select from these which installer and system is most appropriate for their needs.

Solar communities are not always a readily available option for regional areas, which have a much smaller number of solar energy system installers than more densely-populated urban centers tend to do. Some Queensland solar installers may charge travel fees when called out for one-off installations, and prices may be higher due to the lack of competition between installers. With the establishment of a Solar Community, however, these hurdles will be overcome as greater numbers make it more worthwhile for solar installers to travel the distance.

Interest in the Townsville Solar Community

To date, a number of Townsville residents have been in touch with Solar Choice about the Townsville Solar Community, and the level of interest is high. To register your interest, please contact Townsville Solar Community Organiser Tom Chapman (tom@solarchoice.net.au) to express your interest in the community.

Solar Power in Townsville: Federal Solar Rebate Discounts and Credits

Townsville (postcode 4810) is located in the Renewable Energy Certificate zone 3. Its location in this zone determines how big a discount will be allocated under the Federal Solar Rebate and Solar Credits Schemes.

Explained in brief, the Solar Rebate scheme is a Federal Government program under which large polluting entities (such as coal-fired power plants and steel mills) are legally required to buy and submit to the government a set number of Renewable Energy Certificates (RECs), also known as Small-scale Technology Certificates (STCs) to offset their carbon emissions. STCs are created every time an eligible small-scale generation unit (such as a solar power system) is installed. The owner of the system may sell these credits to their installer for an upfront discount on their system, or hold on to them to sell them later. As they are sold on an open market, the price of STCs fluctuates with supply and demand.

The Solar Credit Scheme multiplies the number of STCs applied to the first 1.5kW worth of a system’s capacity by 3. All the capacity installed above 1.5kW will receive STCs as they are normally calculated–1 for every megawatt-hour of electricity expected to be generated over a 15 year ‘deeming’ period. (For more information, please see our Solar Rebates and Credits page.)

*Based on STC price of $29

Queensland Solar Bonus Feed-in Tariff makes solar energy a good investment for Townsville

In addition to federal rebates, Townsville residents will able to benefit from the state’s Solar Bonus Feed-in Tariff scheme. The Queensland Solar Feed-in Tariff offers the greatest returns on grid-fed solar in Australia at the moment–44c/kWh. This is nearly twice as much as the next best rate offered by Victoria–25c/kWh. The Queensland Solar Bonus Scheme is not scheduled to end anytime soon, but state a state legislative assembly election may be held anywhere between the end of 2011 and April or June 2012, and if there is a swing away from the current Labour party rule, the solar feed-in tariff may be repealed. (Read about the eligibility criteria for the Queensland Solar Bonus Feed-in Tariff Scheme.)

Electricity prices in Queensland are also expected to rise in the near future, making solar an attractive option for planning home finances, especially under the 44c/kWh feed-in tariff. When one considers that the current domestic price for electricity under Tariff 11 Domestic is 22.759c/kWh, it’s clear that that the rates currently offered by the government for grid-fed solar power is an opportunity not to be missed.

Further information:

Read about the price of solar PV systems in Townsville

Read more about the Townsville Solar City program

Read more articles about Solar Power in Queensland

For more information about joining the Townsville Solar Community, please fill out the Solar Quote Comparison form to the right of this page, call us on 1300 78 72 73, email the Townsville Solar Community organiser Tom Chapman (tom@solarchoice.net.au) with the subject line “Townsville Solar Community”.

(Top image via Wikipedia)

Some of the information below may be out of date. For the most up-to-date information on the state of South Australia Solar Feed-in Tariff incentives, see the South Australia Solar Feed-in Tariff page.

(Get a free comparison of solar quotes of the installers who operate in your area of SA.)

The South Australia state parliament has made a number of changes to its solar power feed-in tariff scheme. Among the amendments to the SA Electricity Act 1996, is the decision to terminate the SA feed-in tariff program on 1 October 2011.

Other changes to the feed-in tariff legislation, passed in the South Australia Electricity (Miscellaneous) Amendment Bill 2011 include:

1.       The cut-off date for the current feed-in scheme is 1^st October 2011. Approved applications for permission to connect must be lodged by midnight 30 September, 2011.

2.       Although an amendment to increase the feed-in tariff rate of $0.44 per kWh to $0.54 per kWh for existing customers was initially proposed, this part of the bill was not passed. Unfortunately, there will be no 54c/kWh feed-in tariff for existing or new members of the scheme.

3.       Solar power producers will only be credited for the first 45 kWh of electricity per day fed into the grid. There is also a limitation of one generator (solar power system) per person, but it does not matter whether the system is on a residence or a business.

4.       Restrictions to the eligible size of a solar system–10 kilowatts for a single-phase system.* Eligibility is limited to one system/generator per customer.

5.      Exclusion of systems which are believed to be ‘for profit’ (hence the 45kWh/day limit, and the limitation of one generator per person.)

6.       Potential for a household to not qualify for the scheme if they ‘disconnected for any period’.

However, if you sell your house or buy a new house, the feed-in tariff contract will be transfered with your meter/home to the new owner (provided you do not take the system down). This means added value to your home should you decide to sell it. Likewise, if you buy a house that has a system feeding into the grid on the 44c tariff, you will reap the benefits of the previous owner’s contract when you move in. Remember that the scheme is valid until 2028.

7.      Although it is possible, ‘upgrading’ your solar power system involves a bit of administrative sleight of hand if you are applying for the pre-30 September 2011 deadline and you want to keep the 44c/kWh feed-in tariff. When you lodge your application, future (i.e. post-30 September) expansions will be limited by the nominal rated system capacity under which you lodge your original application. This means, for example, that if you apply for a system with a rated capacity of 5kW initially, but have only 3kW worth of panels, then if you intend to expand the size of your system in the future, you cannot increase the panel capacity beyond 5kW.

Expanding the system beyond this original nominal capacity will be considered a system ‘upgrade’ and will make you ineligible for the 44c/kWh feed-in tariff. (Please note that applications for larger systems may take longer to be approved, so it is not advisable to fill out your application for a system over 5kW ‘just in case’.)

–Update 23 August, 2011–

The SA Government has put up an extremely informative and detailed web page explaining eligibility requirements for and frequently asked questions about the 44c/kWh feed-in tariff. A must-see for potential solar customers in South Australia!

–Update: 16 August, 2011–

Please note that, according to ETSA, if you wish to take advantage of the 44c/kWh feed-in tariff scheme, you must have approval to connect to the grid from ETSA by the 30 September deadline. Pre-approval is usually granted at the time of application.

Current turnaround times for applications are:

-48 hours+ for systems 4kW or below (possibly longer as the deadline approaches and queues for approval get longer).

-Longer periods for systems 4kW or above, especially in regional areas of the state. If a larger system is not approved immediately, the applicant may potentially still be eligible for approval to install a smaller system–although this is not guaranteed.

ETSA does not guarantee the 44c solar feed-in tariff for those who do not make the deadline. A feed-in tariff of approximately 22c/kWh is expected to be offered through the transitional scheme that replaces the current scheme. Get in now to avoid disappointment!

You will also find a wealth of information about the details of the SA solar feed-in tariff in the comments section below. Thanks to everyone who left a comment and cheers to ETSA and the SA Energy Advisory Service for the answers.

Solar Choice will provide more information in our blog as it becomes available. For updates as soon as they come up, click the link below to follow us on Twitter.

Written by Lydia Robertson and James Martin

© 2011 Solar Choice Pty Ltd

Sources and links:

Related Solar Choice article: Changes to South Australia Solar Feed-in Tariff regulations passed through state Parliament 

Renewables SA, “Investor information: Solar feed-in scheme”

*–Clarification–

A clarification on ETSA the criteria for defining nominal system capacity: This question was a minor problem previously, as there was no standard practice for determining whether solar system capacity was based on solar panel array peak output or peak inverter output (which effectively limits solar panel array output). Please note that ETSA defines nominal capacity by peak solar PV array output.

If you believe everything you read in the press, you’d think that solar power in NSW was dead and buried. There is reduced upfront federal assistance (RECs, STCs) for homeowners to buy solar systems and a reduced solar feed-in tariff from the sudden conclusion of the NSW Solar Bonus Scheme. Others have an optimistic outlook. They’d have you think you’re mad for not getting a system.  The truth is somewhere in the middle.  There is actually a well defined  ˜sweet spot’ for solar, depending on your patterns of electricity use. (By Stuart Gordon, Solar Questions.)

(Get a free comparison of solar quotes of the installers who operate in your area!)

In NSW, whether to get a solar system now depends on when you use your electricity

Put simply: solar power is economical for you if your solar system produces enough electricity to power your daily household power demand.

The following are graphs that illustrate usage patterns for three types of home and a business.  The first two show usage for families that are out during the day. By identifying which one is closest to your daily use, you can identify if a solar power system might be economical for you in NSW–even without a feed-in tariff.

Household A: Lower power consumption during the day, higher at night. (All occupants outside the house during the day.)

Household B: Even higher electricity usage at night. (More occupants than household A.)

Household C: Fewer occupants at home during the day, more at night. (Stay-at-home parents, home office.)

Business: Occupants arrive in the morning and leave in the afternoon. Power consumption is steady throughout the daytime.

Let’s compare these usage patterns to 1.5kW and 3.0kW solar systems. Numbers are approximate, as actual system output depends on factors such as system size and effectiveness (orientation, shading) but the pattern is always the same bell shaped curve. When we overlay two of these, we can see the impact.

As an example, the graph below shows a 3kw system (which will produce about 12kWh per day on average, depending on where you live) and a 1.5kw system displayed in comparison with Household A’s pattern of electricity use.

Overlay of Household A electricity consumption against a 1.5kW solar system (yellow) and a 3.0kW solar system (purple).

Offsetting your power consumption by consuming the power directly from your solar system: net metering

As you can see, if you use a lot of power then the ˜export to the grid’ may not even happen: you’ll consume it all yourself, thereby saving yourself the money you would otherwise pay for electricity from the grid. There are many homes that use 40 kWh or more a day. If this is the case for you, you are still taking advantage of all the power generated from a 3kw system (around 12kWh/day) during the day.

If you are using this power then you’ll find that the actual cost of power plus the expected rises in energy prices will give you a great return on your investment, in many cases a pay back time of about eight years.

Consider how you are billed for your electricity usage in the long-term:

Many homes are on a tiered, two-step pricing billing plan “ they pay a lower price for the first allocation of power then a higher rate. For example you may pay 22c for the first 1300kwh, then jump to 25c above that. By using solar power, you might stop yourself being charged that higher rate, thereby increasing the financial benefit for home.

If you compare this to the situation of people who bought systems in 2010 and who are set the 60c tariff until the scheme expires in 2016, you’ll see that current purchasers of larger systems are doing nearly as well. Despite lower upfront assistance, some larger systems are less expensive than before–thanks to cheaper panel prices and a record-high Aussie dollar. Because peak power prices are as high as 40c per kWh now, (and within 3 years may be as high as 60c) there is good reason to invest in solar power.

In fact, because the lifetime of an average solar system is 25 years+, the longer you have the system, due to the expected higher electricity prices, the return on investment rises over time. For example, by the 10th year of ownership, the return on investment on your original purchase price will probably be 15% per annum or more.

————

Are you a New South Wales resident interested in going solar to offset your electricity bills? Solar Choice offers free, impartial advice and Solar Quote Comparisons: Our goal is to help you find the system that best suits your needs. 

Want to know more about Solar Power in New South Wales first? The following articles might be of interest to you:

- 30c/kWh Feed-in Tariff offered to NSW customers through a Solar Choice Network Installers

- Solar Power reaching grid price parity in parts of NSW

Written by Stuart Gordon

For a more in-depth analysis about the economics of buying a solar power system in NSW, please see the full version of this article on the SolarQuestions website.