Home: Renewable Energy News: Monday 12 May, 2008

Renewable Energy News

MONDAY 12 MAY, 2008 |

A proper solar feed-in tariff in Victoria - 10 Reasons Why

The Victorian State Government recently introduced a net metered feed-in tariff. While a start, the initiative is not likely to create a massive uptake of domestic solar systems for Victorian roofs. A gross metered feed-in tariff would be needed to achieve the outcome of more solar powered homes.

Briefly, agross metered feed-in tariff can:

deliver over 500 MW of clean peaking electricity generation capacity
immediately attract private investment
develop a high-tech solar industry with enormous export potential
create 2,600 jobs across Victoria
save over 750,000 tons of CO2 each year.

The gross metered solar feed-in tariff provides an incentive for consumers to own grid-connected solar PV systems. The premium is paid on each unit of the clean electricity generated by the consumers’ solar PV system. It is set at a higher level than current electricity tariffs to account for all benefits of solar electricity not recognized in today’s market. The premium is reduced every year and is funded through a marginal levy on retail electricity bills, exempting the energy intensive industry.

DELIVERS OVER 500 MW OF CLEAN PEAKING CAPACITY BY 2017

Solar PV generates clean electricity when and where it is needed most, matching typical summer demand and high NEM prices. By guaranteeing a revenue stream to solar power investors, the installed capacity of solar PV in Australia can grow to 100 MW within five years and over 500 MW by 2017, reducing the need for costly peak electricity infrastructure. Over four per cent of total generation capacity can be met by solar PV, helping Victoria achieve it’s renewable energy target.

ATTRACTS PRIVATE INVESTMENT TO VICTORIA

The rules of a gross metered feed-in tariff permit long term financial planning, create new, local investment opportunities and provide security for institutional investors. This has the potential to attract significant investment from interstate and overseas for a high-tech-industry in Victoria.

ENSURES AN UNSUPPORTED, GLOBALLY COMPETITIVE INDUSTRY

The proposed support level falls by 5% per annum, ensuring rapid reduction in the installed cost of solar PV. Economies of scale will be passed on to the consumer. The mechanism of the solar feed-in tariff could also be applied to other renewable energy sources, with differentiated tariffs for each renewable energy technology.

REDUCES ENVIRONMENTAL FOOTPRINT AND CO² EMISSIONS

The will prevent the emission of over 750,000 tons of CO2 per annum by 2017. In addition, it will improve Victorian air quality by reducing local pollutants.

COSTS LESS THAN A CUP OF COFFEE

The gross metered solar feed-in tariff would be funded by an average increase in electricity costs of less than 1%; equivalent to a cup of coffee per year for a typical resident.

DOES NOT AFFECT ENERGY INTENSIVE INDUSTRIES

The gross metered solar feed-in tariff is by design competitively neutral to electricity retailers and the NEM. Victorian energy intensive industry will be exempted from the solar feed-in tariff charges, ensuring endorsement from key sectors of the Victorian economy - as successfully implemented in Germany.

ENSURES ENERGY SECURITY AND PRICE STABILITY

The gross metered solar feed-in tariff enhances electricity supply security and price stability against summer peaks by having solar electricity available to the grid at the same time when air-conditioning creates peak load issues.

UTILISES LEADING LOCAL RESEARCH TO ACHIEVE WORLD CLASS MANUFACTURING

World-leading research facilities in Australia, e.g. UNSW, developed the technologies which form the basis of today’s $14 billion global solar photovoltaic industry. The gross metered solar feed-in tariff will allow the State to benefit from the commercialisation of locally developed technologies by enabling a strong domestic industry, creating 2,600 new jobs.

SUCCESSFUL WORLDWIDE APPLICATION OF THIS POLICY

The gross metered solar feed-in tariff is based on the ‘feed-in tariff’ laws which are now the dominant support mechanism for renewable energy deployment worldwide. Some 40 countries, states and provinces have now enacted feed-in laws. Driven by those mechanisms, the global market is expanding fast (70% in 2006) and expected to grow to over $40 billion by 2010.

CREATES A NET ECONOMIC BENEFIT TO VICTORIA

To adequately compare solar electricity with other generation technologies, several additional value components have to be taken into account. Solar electric power eliminates the complex supply chain and geographic distance between electricity generation and consumption. It spreads economic benefits such as technology investment, jobs and environmental effects into communities across the state. These and other additional values will be achieved through a gross metered feed-in tariff.

The net present value of a gross metered feed-in tariff to the Victorian economy is expected to be positive.
A gross metered feed-in tariff in Victoria would deliver clean peak generation capacity, economic expansion, job creation in high-tech industry, low-cost energy diversification, and the potential for the state to lead Australia in accessing the rapidly expanding $14 billion solar PV export market.

Solar PV sparkles on Magnetic Island

Queensland’s Magnetic Island has taken its first step in becoming one of Australia’s “solar suburbs” under the federal government’s Solar Cities initiative.

The home of local resident Lindy King is the first of 500 houses on the island to receive “smart meters” and solar panels installed on rooftops, along with energy-efficient appliances and measuring devices, all part of a trial aimed at reducing greenhouse gases and preventing climate change.

“We have all got to do our bit for the Earth by conserving energy and I couldn't normally afford solar panels so I am very glad I was chosen to help the environment, reduce greenhouse gases and put back power into the grid,” Ms King said.

Her home is one of over 500 homes and businesses who registered for a free energy assessment and the opportunity to host solar PV systems on their roof. A further 1500 residents will receive smart meters that measure electricity consumption and encourage energy conservation.

Project leader Ergon Energy is providing the solar photovoltaic (PV) systems free of charge, as part of an assessment of the solar suburb trial.

Queensland Minister for Mines and Energy, Geoff Wilson, said Lindy King’s home was to be, “The first in a major roll out of solar systems that will transform Magnetic Island into a solar suburb.”

Switching 500 Magnetic homes to solar energy is estimated to save over 50,000 tonnes of greenhouse gas emissions in the next seven years.

“That's equivalent to taking 1700 cars off the road for the same period,” Mr Wilson said.

“These days, we're all conscious of the importance of caring for our environment and the use of renewable energy such as solar power, is a responsible and efficient way to go about it.”

The Townsville: Queensland Solar City consortium will receive a combined total of up to $30 million in funding from both the state and federal governments to begin installation of the solar arrays.

PV solar power systems to become cheaper

The price of solar photovoltaic (PV) panels is tipped to fall in the next year as the so-called “solar module supply bubble”, which has seen demand exceed supply, bursts.

The biggest problem facing the solar electric industry over the last five years has been a shortage of silicon, the most common ingredient in solar PV cells. This shortage is the reason costs of solar-electric modules has remained relatively high, with most individual rooftop solar energy panels costing over $1000 each.

But according to a report from Lux Research, a US group specialising in nanotechnology, the silicon shortage will ease in 2009 and that, combined with other breakthroughs in solar technology, will combine to drive costs down. This will affect the bottom-line of existing renewable energy companies, especially those who fail to adapt to new ways of converting sunlight to electricity. In a reaction to the silicon shortage, several solar power companies have begun making photovoltaic cells from cadmium tellurid instead.

“The market is now approaching a tipping point: We project that the supply of solar modules will exceed demand in 2009, leading to falling prices and a shakeout among companies that aren't prepared to thrive in this new environment--particularly crystalline silicon players that haven't invested in new thin-film solar PV technologies,” the report said.

However, the global solar power industry is approaching a boom period, as demand for photovoltaic panels and cells increases. Annual growth of solar in the US will hit 27% this year, becoming a $70 billion market by 2012.

Analysts are predicting a solar shakeup, with companies either dropping out of the market altogether or merging. Consumers will be the winners in the upcoming shakeup, as manufacturers of solar panels are forced to lower prices to compete for market share. In a recent Australian presentation by Suntech one of the largest solar module manufacturers it was predicted that within five years the cost of electricity supplied via the energy retailer will be on parity with the cost of electricity supplied by solar power systems.