Many years ago, I heard it said that Aboriginal people tread lightly when they walk because they perceive the earth as their mother, and to stomp around on her would be disrespectful, insensitive. That awareness of the earth as mother has been with me ever since. I’m not claiming that I pick my way along like a water bird stalking the shallows, but I do recoil from the attitude that the planet and the creatures on it are ours to take for granted, to exploit and tread all over as we like. And like many others, I have grown ever more conscious of our desecration of the natural environment, and my personal responsibility to “do the right thing”.
I do my best, within reason, to minimise my carbon footprint. No aircon, no bar fridge or freezer, small shared 4-cylinder car, lawn replaced with waterwise natives and organic vege beds laid with sub-mulch drip irrigation, all vegetable waste composted or dispatched to the worm farm.
OK, “within reason” for me might seem extreme to some. It so happens that I find the sustainable living concept attractive, regardless of any climate change factor. I don’t like waste and excess. I do like picking herbs and veges from the back garden and cooking – and eating! – my own organic produce.
I do not seek to present myself as some sort of noble environmentalist making sacrifices for future generations. I enjoy living the way I do. It is no sacrifice. And my topic here is not myself or my lifestyle choices, but hard economics – specifically, in the context of installing solar photovoltaic (PV) panels. Yes, even for people like me, practising sustainable living as far as is practicable in an urban environment, choices come down to the bottom line at some point.
Last year, I decided to investigate the viability of installing solar PV panels on the roof. Since we qualified (sadly, very easily) for the Federal Government’s $8,000 rebate for households with incomes under $100K per annum, I assumed the PV panels would pay for themselves within a few years. It seemed a win-win, environmentally and personally – if we could afford the initial capital outlay, we could look forward to smaller energy bills not far down the track, perhaps even no bills at all! Perhaps Synergy would be paying us (such are the claims that are bandied about by some who have taken the plunge and installed solar panels).
Oh yeah? Do the homework and you’re in for a jolting reality check.
Detailed calculations follow, but to cut to the chase: installing the required minimum of 6 solar PV panels, it would take just over 21 years to break even! Yes, this is with the $8,000 rebate + cashing in the 21 RECs (Renewable Energy Certificates) you receive when you install 6 panels.
Calculations in detail
Synergy currently charges 13.94c per unit (incl. GST).
A 1.05KW System of 6 x 175W panels produces estimated average energy of 4.4 units daily. @ 13.94c per unit, this represents a saving of 4.4 x 13.94 = 61.33c per day.
Annually, this translates to a saving of $223.83 (that is, 61.33c x 365 days).
Cost of the solar PV panels was $4,736.00. Therefore, breakeven point is 21 years (that is, $4,736.00 divided by $223.83).
OK, the point should be made that there are cheaper solar PV panels around than the Sharps, and cheaper inverters than the Fronius expandable for which we were quoted. I figure you get what you pay for, and with a long-term investment like solar PV panels it makes sense to go for quality. Even if you chose the cheapest possible options, though, you’d still be looking at around $3,000 installed – and 14 years to break even! This is for bottom-range Chinese solar PV panels, which are less efficient than quality options like the Sharps and subject to more rapid deterioration over time, and a basic inverter that will not enable the addition of further panels in the future.
We wanted solar PV panels. We really wanted them. We did the calculations once, sat back bemused, and did them again. Emailed our figures through to the guy who’d quoted us. He confirmed that our figures were correct. We scratched our heads, considered this and that future scenario, and came to a regretful conclusion that it was simply not economically sensible to install solar PV panels at this time. Only an environmental idealist with money to spare or someone who hasn’t done their sums properly could logically conclude otherwise!
The government’s $8,000 rebate offer is clearly inadequate as a standalone incentive to encourage mass domestic installation of solar PV panels. If people like me, more committed than most to sustainable living practices, are not prepared to wait 21 years to break even, will yer average Joe be willing to fork out? I don’t think so.
So, whaddayado? Well, for a start, wonder why sun-deprived countries like Germany should have a far greater domestic uptake of solar PV panels than Australia. It doesn’t take much research before the answer is staring you in the face. Their government has made a serious commitment to solar energy; ours hasn’t.
The outstanding success of Germany’s solar PV uptake comes down to a simple policy: the feed-in tariff. The German government pays 4 x the market rate to anyone who generates electricity from solar PV, wind or hydro – and this payment is guaranteed for 20 years.
Power is far more costly in Germany than in Australia (about 35p per unit, according to this report from The Guardian, or 78c Australian… 5.5 times the 14c per unit we’re being charged in Western Australia). If the Australian Government were to match the German feed-in tariff on a dollar-for-dollar basis, they would be paying solar PV panel households a feed-in tariff of about $3.12 per unit.
The feed-in tariff currently being sought from the Federal Australian government by solar PV advocates is 80c per unit. This is about 5.7 x the current cost per unit (as opposed to the German 4 x), but factoring in the relative cheapness of power in Australia, an 80c per unit feed-in tariff here works out at only about 25% of the per unit contribution paid by the German government. Reasonable, surely?
An 80c feed-in tariff would slash the breakeven period for the system we were quoted on from 21 years to 3.7 years (less, of course, for cheaper systems). And after that breakeven point, at current rates we’d be paid $1,284.80 per year for the electricity generated by the 6 solar PV panels. Add more panels down the track and it is quite conceivable that you could cover your household energy costs and make some carbon-free profit from the sun hitting your roof! Thus, with an 80c feed-in tariff, investing in domestic solar suddenly makes a whole lotta sense.
The government is canning the means-tested $8,000 rebate mid-year and replacing it with a more complicated system. Even if the current rebate was halved to $4,000, add an 80c feed-in tariff to the equation and breakeven is only 6.8 years away. Still viable by most reckonings, I would think.
Seems to me a no-brainer that our government should adopt a similar domestic renewable energy strategy to that which has been so successful in Germany. With a feed-in tariff of 80c, solar PV panels would become a compelling investment, both financially for the individual and environmentally for the community as a whole. Further, at a time when recessionary forces are threatening jobs, substantial employment would be created by increased demand for solar PV panels. This is not mere postulation. In Germany, the push for renewables has spawned a quarter of a million jobs and strengthened the economy (see here). With our climatic advantages, why are we dawdling so?
The approach to feed-in tariffs here is a dog’s breakfast. Each State government has a different policy, ranging from 60c in Victoria to zilch in WA and NSW. See here for a good State-by-State summary.
We need a simple nationalised feed-in tariffs program, based on the successful German model. Why reinvent the wheel? Both major parties went to the last Federal election promising feed-in tariffs – where’s the action to back up the rhetoric? Give them a poke!
If the arguments presented here make sense to you – and why would they not? – TAKE ACTION NOW.
Write to your local Federal Member of Parliament requesting they honour their pre-election commitment and move to introduce gross feed-in tariffs as soon as possible to increase solar power use in Australia. You may wish to direct your email to the Minister For the Environment, Peter Garrett. His email address is [email protected]
Finally, help to build momentum by sending links to this post and/or the feed-in tariff petition to everyone in your address book. No matter how acute the selective deafness of politicians, the roar of the people will get through if it’s loud enough.