A report released by the Energy Users Association of Australia (EUAA) has criticised solar panel based electricity generation as being expensive in terms of subsidised carbon abatement, but the findings are based on old data.
The EUAA, whose members include Anglo Coal Australia, BP, Caltex and Rio Tinto, says for renewable energy generation systems “commissioned by the end of 2010, each tonne of CO2-e emission abatement that that plant will achieve over its life has required $76 of subsidy. This can be compared to a proposed emission tax of $23/tonne.”
The EUAA report, entitled “Renewable electricity in Australia: outcomes and prospects” states “the high abatement cost is largely attributable to the fact that the least efficient technologies have attracted a disproportionate share of the subsidy”, and goes on to identify solar PV as one of those technologies.
It’s not uncommon for fledgling industries to receive substantial initial subsidisation in order to become competitive. The fossil fuel sector, which could hardly be described as “fledgling” now, still enjoys substantial support and the burning of fossil fuels is the source of our greenhouse gas emission woes. It’s this ongoing support of polluting fuels that have contributed to subsidies for home solar power systems being needed in the first place.
However, since the end of 2010 much has changed when it comes to solar panel rebates and incentives. At that point in time, the Solar Credits rebate was far higher than what it is now. Feed in tariffs have also been reduced in most states for new participants entering the schemes.
The cost of PV solar power has dropped substantially since the end of last year – half what it was in the EUAA report according to the Clean Energy Council.
The higher initial subsidies have helped reduce the cost of installing solar panels and it’s happened in a short space of time. The solar industry says further cost reductions, both in terms of outlay and carbon abatement, will continue to occur as long as support is tapered off in a responsible way.
Australia’s solar PV sector has also become a major employer – thousands of Australians now have green collar jobs directly connected to solar panel uptake.
Additionally, households installing solar power systems aren’t just taking more control over their energy choices and consumption, slashing their electricity bills and greenhouse gas emissions; they are also playing an important role in distributed electricity generation and the nation’s future energy security.
Ten percent of Australian electricity infrastructure capital expenditure reportedly goes towards responding to peaks in electricity demand occurring only 20 hours a year. Uptake of solar power in New South Wales has delayed the need for baseload fossil fuel based electricity generation capacity needing to be added for around 3 years.
Cost should always be considered in conjunction with overall value – and PV solar has plenty of value to offer in addition to carbon abatement.