Australian Solar Power Industry Not The Electricity Price Rise Villain


By Jeremy Rich
Managing Director
Energy Matters
Today there will be a public rally in Sydney challenging the NSW Government, organised by the solar power industry. By contrast in Victoria it will be business as usual as hundreds of homes are signed up to the solar revolution. What does this show? Don’t blame badly managed government policy on the solar industry.
When the NSW Government last week announced its decision to slash its state’s solar feed-in tariff from 60 cents to 20 cents per kilowatt-hour for households it tried to turn the solar industry into the villain.
NSW Premier Kristina Keneally took aim at the cost of the Solar Bonus Scheme in making the cuts. This encouraged certain sections of the NSW media to describe the solar industry as the cause for recent electricity price rises and accused the industry of being elitist and other myths
At the heart of the debate is whether subsidies to assist the solar industry are the cause of pushing up the overall prices of electricity to households. This is not true. 
The overwhelming majority of electricity price rises being felt by consumers are due to the need of electricity generators and distributors to fund network infrastructure upgrades in a system that has been neglected for decades. Improvement to the grid requires an investment of $42 billion across Australia over the next five years. 
If we can take more load off the grid by people installing solar panels on roofs it will in the long-term actually reduce the cost of electricity by decreasing the need for transmission infrastructure or expensive upgrades to the grid.
Some have even turned the debate into a ‘rich vs. poor’ issue – the argument is that the rich can afford solar panels and the poor cannot, so the wealthy benefit from the energy rebates.
The truth of the matter is that most small solar power system owners are not rich – they are average families trying to help the environment and shielding themselves against rising electricity costs; costs that will skyrocket with or without solar power in Australia’s energy mix. We know that because we know the people who sign up with us.
In NSW, everyone knew the old solar tariff scheme was being badly managed as it raced towards full capacity – but don’t kill the industry for poor policy implementation, even if the tariff rates were right. By slashing the Solar Bonus Scheme so aggressively, the Keneally Government have now endangered hundreds of jobs and the ability of households to do something pro-active about the environment.
Compare NSW’s knee-jerk reaction to what happened in the ACT when it decided to extend its scheme as recently as September as the ACT government issued a target of generating 240 megawatts of power from solar energy in our nation’s capital.
We know there is a strong appetite for people to install solar panels at their homes – households want to contribute to reducing the reliance on coal-fired power stations. Last Wednesday Energy Matters signed up a record 278 customers to solar in NSW before the old Solar Bonus Scheme was killed off, totaling over 800kW removed from the grid or the equivalent to 17,000 tonnes of CO2 offset or 3,500 cars taken off the road over a 15 year period
Let’s for a moment have a look at the Victorian solar feed in tariff system – which is a net system – meaning it only pays the household for the net contribution back to the grid after household consumption – rather than NSW’s gross payment system.
In Victoria it pays households 66 cents per net kilowatt-hour of solar power generated. The result is a sustainable system of encouraging industry development while reducing greenhouse gases.
Most industry analysis calculates that Victoria’s feed-in tariff adds less than $1 per year to average electricity bills. In return solar power in Victoria cuts up to 1,550 tonnes of CO2 per gigawatt hour. It is a very good, effective outcome for everyone.
If it’s smart, Victoria can now assume NSW’s mantle of state leadership in supporting the solar industry. We look forward to announcements to support the industry in the upcoming Victorian State Election.
It is clear that all forms of government – state or federal – have to play a role to help promote the solar industry if we want to grow a sector that is critical for addressing our environmental problems in the future. Ultimately we’d like to see a nationally consistent gross tariff scheme in Australia matching countries like Germany. 
It’s interesting that Germany is a country that gets a fraction of the sun that Australia receives; yet it has become the largest market for solar power in the world. What does that mean? Germany has created a thriving solar manufacturing industry employing thousands of people that is now making some of the most efficient solar panels in the world. 
The result is solar panels being constructed in Australia are struggling to keep up with these technological advances or cheaper alternatives from China and imports are taking over in Australia. 
What the Australian solar industry needs right now is vision, not politicians headed towards their next election worried about opinion polls or ill-informed discussions about the causes of electricity price rises.
I’m reminded of the vision of Thomas Edison who was quoted in 1931 telling auto industry magnate Henry Ford about the use of fossil fuels: “We are like tenant farmers chopping down the fence around our house for fuel when we should be using natures inexhaustible sources of energy – sun, wind and tide. … I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”
At the moment it’s the politicians “chopping down the fence” – now is the time for all politicians to embrace the solar power industry and not abandon it. The NSW Government needs to improve its revised Solar Bonus Scheme and make it more balanced to the solar industry rather than try to kill it off.
It’s taken nearly 80 years, but finally Edison’s vision of a solar energy revolution has begun in earnest on rooftops across our country – now let’s keep it going.
Energy Matters is an award winning solar power solutions provider, based in Victoria and with branches throughout Australia. Energy Matters is active in the community in providing education and advocacy to address challenges that prevent access to clean energy sources for all.