SRES – Will solar rebates increase the cost of electricity?

Will solar rebates increase the cost of electricity? Yesterday The Australian newspaper published an article titled ‘Households’ $2bn solar hit’ which hypothesises that every Australian household will have to stump up $195 to help subsidise the subsidies. Is this rubbish? What impact does the SRES really have on electricity prices? Let’s read on…

SRES – Will solar rebates increase the cost of electricity?

Ketan Joshi via Renew Economy wrote a great article titled “How a ridiculous falsehood about solar power self-replicated in media”. You can read it on Ketan’s blog (ketanjoshi85) by clicking here. The “$2b solar hit” is a sum which has been basically made up through some extremely shoddy extrapolations.

The article in the Australian was run with by a number of Australia’s most trusted media outlets – News.com.au, 7 News, Sky News, the Today Show, and the consistently atrocious Daily Mail – who titled their article about the rebates thusly: 

“Climate change farce: How every Australian household contributes $200 a year to those lucky enough to be able to afford to put solar panels on their roof”

Energy Minister Angus Taylor decided to blame the big electricity retailers:

‘The big cost is the profits being taken by the big energy companies in the wholesale market, without innovation or new products, and it is time for them to deliver a fairer deal for their customers,’ he said.

‘According to the Australian Energy Market Commission, the small-scale technology certificate cost is less than three per cent of the bill, whereas 46 per cent is going to the big generator retailers.’

The Renew Economy article notes that, for FY18 and FY19 respectively, Australians paid/will pay $19 / $32 towards the scheme. This is a stark contrast to the $134 / $195 which was reported. It appears that the figures are so badly skewed for a number of different reasons including the assumption that 100% of electricity costs are passed on from businesses to households. They also haven’t factored in the Small-scale Technology Percentage, which will be set by the Energy Minister in March – and the effect this will have on STCs is quite marked. Installing solar power systems becomes cheaper if the STCs are higher, so you can see how this would have an impact which could be measured erroneously. It’ll be interesting to see how this impacts on solar grants moving forwards. 

The Small-scale Renewable Energy Scheme (aka SRES) is scheduled to run until 2030. If you’d like to read more about it please visit the Clean Energy Regulator’s website – where they have plenty of information about the scheme. 

We’d also recommend Ketan’s article for a more in depth exploration of the issue.

Read More Solar News:

True Value Solar to shut down in Australia

True Value Solar, a German owned solar installation company in Australia, will shut down over the coming months as it struggles to compete in the local marketplace.

True Value Solar Shutdown

True Value Solar
True Value Solar

True Value Solar was once Australia’s biggest solar installation company, so this comes as a bit of a shame. With that said, their heavy discounting and price-focused product range led to its own issues as well. The company has 3.2 stars on ProductReview and has been sinking rapidly as the solar race to the bottom continues – as the old saying goes, good price, quality, and speed – you can pick two. Unfortunately this has now claimed another scalp and True Value have decided to exit the market. 

The company had been owned by German company M+W Group since 2011, when they invested in a controlling stake. They bought out the entire True Value Solar company in 2013 and have since rebranded as Exyte.  

Exyte, who turns over $4 billion per annum, have decided to exit the country and shut up shop. A map on its website with over 20 countries where Exyte operate no longer shows Australia .

True Value solar MD David McCallum hasn’t made any comment yet, nor has Exyte said anything official, but comments in One Step Off The Grid note that the status of the company (i.e. the upcoming closure) was ‘confirmed’ by RenewEconomy today. The current ~30 employees have already been informed of plans to shutter the company.

It’s understood that the winding down of True Value will be a gradual process so they are able to honour existing contracts and warranties as much as possible. No word yet on how it will affect their commercial solar arm. 

If you want to remember the good old days, please have a look below which shows you a ‘typical True Value Home Installation’.

Read More Solar News:

Hornsdale Power Reserve saves $8.9m in 6months

Hornsdale Power Reserve – also known as the Tesla South Australia battery, the 129MWh solar/energy storage battery has saved the state $8.9m in six months, according to Renew Economy and their analysis of spot market pricing in 2018.

Hornsdale Power Reserve

Hornsdale Power Reserve
Hornsdale Power Reserve (source: hornsdalepowereserve.com.au)

The cost of the Hornsdale Power Reserve hasn’t been made public, but at ~$800 per installed kWh the cost comes out to around $100m (with around $50m paid by the government), which fits the whispers we’re hearing around the traps.

The partnership between Tesla and South Australia was inked in July last year as Elon Musk and then-Premier Jay Weatherill decided on Neoen’s Hornsdale wind farm as an installation spot. The Tesla Battery was then completed on November 24, ahead of its December 1 operation deadline (Musk made a bet with Weatherill/South Australia that Tesla would install the Powerpack batteries by December 1 or the project would be free).

According to an analysis undertaken by RenewEconomy and investigated further by Clean Technica, The battery saved $5.7m in its second quarter of operation. It bought power at an average price of $79/MWh and sells it at $191/MWh (a figure somewhat distorted by a very power-hungry January – with that month removed the price goes down to $141/MWh). The estimated savings for the full 2018 are expected to be around $18m. 

It’s important to note that the battery is still trading 30MW (of its total 100MW) of capacity so there is space to expand operations should the government be so inclined. 

If you’d like to read a more detailed account of how much money the Hornsdale Power Reserve has saved South Australia in 2018 click here to read Stephen Parker and Bruce Mountain of the Victoria Energy Policy Centre investigate the economics of energy generation/storage.

If you’d like to see more stats on how the HPR is going, price-wise – there’s a rolling 72 hour graph of each battery charge/discharge with spot price data available via this link.

 

 

Read More Solar News:

World’s biggest solar farm planned for Saudis

World's biggest solar farm - Vision Fund

Japanese technology conglomerate SoftBank will team up with Saudi Arabia’s sovereign wealth fund to provide initial equity for the world’s biggest solar farm in Saudi Arabia. Softbank and the Saudi Arabians have said that their project will have a gigantic 7.2GW capacity in 2019 and this will grow quickly.

World’s biggest solar farm

World's biggest solar farm - Saudi Arabia
World’s biggest solar farm – Saudi Arabia (source: albawaba.com)

By 2030 they are hoping to have a titantic 200GW of power – this would take up a massive amount of the desert, equivalent to a million football fields, according to Renew Economy.

For scale, worldwide total solar deployment is around 400GW, with the current biggest solar farm in China (the Tengger Desert Solar Park at 1.5GW). Australia’s biggest is the 220MW Bungala Solar Farm in Port Augusta.

According to Softbank and the Saudi Arabians, the Saudi Arabian solar project will be built in two stages next year (in separate projects of 3GW and 4.2GW), and they aim to have 200GW by 2030. This would be a huge change to the country which currently uses 60% oil, as they enjoy the lowest cost of oil production worldwide.

For comparison, Australia only uses 20GW per year so this is an absolutely massive undertaking.

Crown Prince Mohammed bin Salman and SoftBank chief Masayoshi Son say phase one will cost $5 billion, with $1b of this money coming from the Vision Fund and the rest will be through project-financed debt. 

The plant will be able to supply enough electricity for Saudi Arabia and ‘much of the middle East’ via exporting – with projected savings forecast to be up to $40b per year. The manufacturing of the solar farm in Saudi Arabia will also result in the creation of 100,000 direct and indirect jobs. 

Masayoshi Son says the projected will “fund its own expansion” so it’s really exciting to see how a project of this size manages to become profitable/cash flow positive so quickly – we’ll be watching it closely. This is the biggest project we’ve covered and it’ll be great to follow it along as it’s built and starts providing power to the Middle East! 

World's biggest solar farm - Vision Fund
World’s biggest solar farm – Vision Fund

 

 

Read More Solar News:

Australian solar installs new record in November

Australian solar installs reached an all-time high of 120MW in November, eclipsing the 100MW in October and the record of 110MW set in June 2012, which was ‘artificially’ (for want of a better word) inflated as it was the last month before Queensland cut off the $0.44c premium feed-in tariff. These are massive numbers when compared with the previous few years and a fantastic indicator for the future of renewable energy in Australia. 

Australian Solar Installs in 2017

According to RenewEconomy and The Green Energy Markets’ Renewable Energy Index, for most months in 2016 solar installs were below 60MW and January 2016 had a measly install amount of 45MW. The reason for the big drop in numbers was due to the end of the premium feed-in tariffs and also the federal government’s substantial cutback of the amount of STC rebate certificates it provided. This means the cost of solar (and payback period) increased substantially, dropping the number of installs and casting doubt upon the industry as a whole.

Over the past 12-18 months, however, there’s been a perfect storm of the gigantic rise in the cost of wholesale electricity, better quality and price of solar panels and storage due to technology advances, and excitement about renewable energy have helped raise the numbers of solar uptake. Public perception and interest in the technology due to such projects as the massive Tesla battery in South Australia, German company sonnen’s ‘free power’ offering via sonnenFlat, and the Powerwall 2 battery have all led to Australia’s domestic and commercial solar uptake reaching this all-time high.

Australian Solar Installs 2017 - sonnen's sonnenFlat and sonnenBatterie
Australian Solar Installs 2017 – sonnen’s sonnenFlat and sonnenBatterie (source: sonnen.com.au)

The Renewable Energy Index for October 2017 showed that Queensland leads the way for Australia, with jobs coming via renewable energy projects (both large-scale and rooftop solar) almost doubling over four months from 3,634 at the end of 30 June 2017, to 7,194 in October.

 Amazing news for solar contractors and solar installers – although things may slow down a little over the Christmas period we can’t wait to see what 2018 brings to solar power in Australia. 

Read More Solar News: