Canberra solar PV gross feed scheme is a foolish and expensive experiment with our electricity system

As reported here and there are many other reports online, The Australian Capital Territory (ACT) Labor Govt. with the applause of the ACT Greens, nows pays about 50c/kWh for electricity generated from solar photovoltaic (PV) panels or wind power. This is a GROSS feed in tariff, not NET and is the most generous in Australia. There is also a Federal Govt subsidy ~$8000 to install PV panels, if you qualify.
This compares to typical ACT power charges of say 15c/kWh, which is plenty high enough considering large industrial users can pay half that and coal fired generators can produce power at about 4c.

There has been criticism of the scheme in letters to the Canberra Times including this example, “Tenants to pay cost of solar panels for the well-to-do” on the 12th of February.
How did the ACT Labor Govt. settle on what appears to be such a socially regressive scheme and how do the ACT Greens justify this raid on the pockets of the less wealthy ?

Let us look at some possible numbers, keeping things simple, the Canberra population is say 300,000 – let’s say there are 75,000 households, say a third take up the scheme and on average put in a 2KW set of panels, producing say 10kWh perday at 50c = $5.00. Over a year each household could be credited with $1825, which works out to $46Million savings on powerbills across the 25,000 households.
There can be no doubt that the 50,000 households (including most tenants), who can not afford the high cost of buying and installing rooftop solar panels will pay this $46Million through increased electricity charges, which on these figures will be $920 per year or $17.30 per week.
Solar power is not sufficient for the important morning and evening peaks, as the sun is not shining then. So ACTEW will have to keep sourcing grid power from NSW generators, increasingly requiring peak period power as presumably the solar power fed-in from rooftops will mean ACTEW will buy less NSW grid power during sunshine hours. Normal commercial dealings would tell you that the NSW generators will want a higher rate from ACTEW seeing they will buy less and are more picky about when they want the power. Then how about a dull day, all of a sudden ACTEW puts an order in, it seems obvious that under normal commercial principles higher rates would apply to erratic and unpredictable demands for supply.

OK, given that the Federal Govt. wants to source more low carbon electricity, surely the most efficient way for Australia to do this is to start at the remote regions of the various State grids where electricity is the MOST expensive and solar will be most able to compete, requiring a lower subsidy. Probably better sunlight- plus cheaper land upon which to build large scale solar arrays which would be half the cost of roof top installations. This way we gain a better fund of knowledge about the ways to make solar generated electricity as cheap as possible.
But what are we stuck with ? A half baked scheme, paid for by our taxes & increased charges on the less well off, driven by the wish of the bosses of our Green-Labor Soviet to appear greener-than-thou.

There are other disadvantages to a multitude of tack-on rooftop schemes. High wind gusts near thunderstorms are common near the ACT and you do not need to be clairvoyant to predict wind damage to roof-top panels and or roofing. Roof timbers were designed to carry say tiles or roofing iron, not the stresses from large area solar panels that could act as a sail in high winds.
Then of course there is hail damage.
In addition to the added costs for owners of these panels if they are damaged, there is the issue that if a Canberra wide weather event causes damage to a high proportion of panels, then ACTEW has to suddenly replace that electricity from the grid. This would probably be at higher rates than normal steady base load rates.
If the ACT feed in rate was to spread to NSW then all these problems would accentuate and the risk to our grid supplies would be hightened.
It can be seen that in many ways we are entering a period where there will be;
[A] a more expensive electricity supply,
[B} greater risk to our electricity supply with the quality of our electricity declining and power cuts / brown outs becoming more common,
[C] more busy people will own emergency generators – noisier neighbourhoods.
[D] a price structure with sharper variations through the varying time zones through the day and week, which must lead to lifestyle changes for the less well-to-do.

11 comments to Canberra solar PV gross feed scheme is a foolish and expensive experiment with our electricity system

  • Geoff Sherrington

    Here is an illustration of a more mature alt energy sheme going into reversal.
    “Scandinavian power price surprises. Finland has announced its intention to put a tax on nuclear and hydro power sources built before 1997 because in the operation of a carbon trading market they will make good profits. The tax will apply to 2182 MWe of nuclear capacity and about 3000 MWe of hydro at a rate of up to EUR one cent per kWh. It will thus counter the incentive to maximise the utilisation of non carbon-emitting base-load plant.

    Denmark trades power in the same Nord Pool, which has announced that from October the spot floor price for surplus power will drop from zero to minus EUR 20 cents/kWh. In other words, wind generators producing power in periods of low demand will have to pay the network to take it. Nord Pool said that “A negative price floor has been in demand for some time – especially from participants trading Elspot in the Danish bidding areas. … Curtailment of sales may give an imbalance cost for the affected seller and thus creates a willingness to pay in order to deliver power in the market.” This is likely to have a negative effect on the economics of wind power in the region, since a significant amount of Denmark’s wind power production is affected.”

    WNN 1/4/09, Nord Pool 4/2/09.

    www.world-nuclear-news.org 10 April 2009

  • Romanoz

    In the Australian, a Brisbane couple is complaining about the poor returns they are getting on their investment of $20,000 on PVs. This is after the $8,000 subsidy from the Federal Govt.
    They are putting 400kWh into the grid every quarter for which they are getting 3 cent/kWh. Thats a return of 0.25%/pa.
    Welcome to the brave new world of Green economics!

  • Romanoz

    Apologies, but I did not factor in the amount of electricity they consumed in that period which came to 1384 kWh – I assume all this was obtained from the PVs. At say 15 cents a kWh that comes to about $207 which, together with the $13 from the power they uploaded, makes for a grand saving of $220 per quarter a return on $20,000 of 4.5%. This assumes constant output over the year, ignores the $8,000 subsidy from other taxpayers, maintenance costs eg inverter, batteries, damage to panels, loss of efficiency, etc. They dont say how much power they used from the system in periods when the PVs were inactive (evening/overcast/very hot) or during high current loads eg air-conditioning.

  • WSH

    Another minor point, I read where PV panels have to be kept clean to keep up efficiency. It is common to get dust around Canberra so there is another creeping drag on output. I am surprised I have not been able to find data for average monthly – hour by hour solar radiation profiles for Australian localities. I have some detailed data from Atlanta which is a similar latitude but can find nothing for Oz. There are large seasonal variations of course and I notice on overcast days now my little solar garden lights barely come on at night.

  • David Brewer

    Another bonkers ACT government idea. Rooftop photovoltaic power is totally uneconomic in a sizeable city like Canberra. Apart from the astronomical cost, it is most plentiful when it is least needed – in the middle of the day in the middle of summer when half the population is down at the coast. On cold winter evenings when consumption peaks – nothing.

    What drives the policy is not science, economics, or common sense. It is the need of half-educated intellectuals to feel good about themselves, to feel that they are “making a difference”. It is the result of having “self-congratulation as the basis for social policy” (Tom Sowell).

  • Uri

    I see the Canberra Times is quoting the ACT Independent Competition and Regulatory Commission agreeing with much of what you say.

  • Solar eneragy is the future for the world.
    solar energy facts

  • WSH

    I see headlines today indicating we have another GreenLabor generated scandal developing over shoddy installations of rooftop solar panels. After the ceiling insulation scandal – what would you expect, sounds normal for anything the Govt touches.

    Solar subsidy sparks surge in complaints and Complaints about dodgy solar panels on rise

  • cementafriend

    While I do not believe in AGW, like most people I see no reason to refuse a free offer when governments are handing them out. I accepted the “Pink Bat” offer but made sure that I had fibre installation and not foil. I made sure that the installers did a proper job and I inspected the finished work in the roof. It appears to have made some difference in the winter months and the summer months (roof is metal and has two large rotary vents). I have just signed up for the solar panels on the basis of pre-sold renewable energy certificates giving a discount so that on the basis of present energy costs I hope to get a better return on my investment than leaving the money in the superannuation fund. (System 1.5kW with 3kW inverter cost $3000 assumed electricity replacement price $0.20/kWhr. The down side is if the panels do not work as well as indicated and there are less sunshine hours (I assumed 7hrs for 360days and 80% efficiency giving a return of about 20%). The upside is that the BOM average sunshine hrs are slightly higher, they garantee 90% efficiency for the first 5yrs, the feed in tariff is $0.43/kWhr for any excess and that the electricity prices have been announced to increase by 40% in the next two years.
    However, I go along with Warwick. There will be scams. One is the quoted price of the electricity replacement. It is not the feed in tariff.

  • bowking

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  • Beachgirl

    You said above “..we are entering a period where there will be….greater risk to our electricity supply with the quality of our electricity declining and power cuts / brown outs becoming more common..”
    Did you see where John Holliday the boss of the UK National Grid says that wind will increase six-fold by 2020-2030 and read his words at the James Delingpole article.
    “The grid is going to be a very different system in 2020, 2030. We keep thinking that we want it to be there and provide power when we need it. It is going to be much smarter than that. We are going to change our own behaviour and consume it when it is available and available cheaply.”
    Hear him towards the end of this 2min clip on BBC 4 radio. He seems to have no plans for nuclear – just unpredictable blackouts when the wind is calm.

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