SOLAR PV MYTHS AND FACTS Household solar power in Australia

SOLAR PV MYTHS AND FACTS Household solar power in Australia Many myths exist about solar power – around what it costs, what it can do and whether gov...
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SOLAR PV MYTHS AND FACTS Household solar power in Australia

Many myths exist about solar power – around what it costs, what it can do and whether governments should support households and businesses in going solar. This fact sheet helps set the record straight.

THE COSTS OF SOLAR TO CONSUMERS

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very expensive. e ar s el an p r la o S MYTH: ecoming more b d an ve si en p ex s are in FACT: Solar panel ay. lly over affordable every d s fallen dramatica

an wer systems ha today are more th installing solar po d an g in uc talled on rooftops od pr ins ming ls co ne ll pa sti e lar ar The cost of so e 50s and costs es to fall. Th 19 inu dnt mi co e d th an of s, lls ar ou ce recent ye first solar w it costs ab t produce than the as a small car; no to r ch pe mu ea as ch st es co tim 500 stem could ars ago a solar sy down fast. Four ye TV. the same as a big gas? , such as coal and traditional energy to e ar rn on mp co lar including the retu But how does so ed power source by the ell to fu ilse ss clo fo is a lar up st of setting its entire life, so er ov ce an en If you count the co int ma w years. ion costs, fuel and r option within a fe investment, operat will be the cheape d an gy er en d se ba coal and gas. cost of fossil fuelof fossil fuels like sts co ing ris e th ce policy against Solar is an insuran

Costs are falling fast The global market price for solar panels fell about 40 per cent last year. The 10 largest silicon panel manufacturers globally doubled their capacity in 20101.

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Polysilicon Glut Worsens as Supply Surge Cuts Prices 93%, Bloomberg New Energy Finance, 10/11/11

The Clean Energy Council (CEC) is the peak body representing Australia’s clean energy sector. It is an industry association made up of more than 600 member companies operating in the fields of renewable energy and energy efficiency.

visit cleanenergycouncil.org.au

Last update: May 2012

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SOLAR PV MYTHS AND FACTS Household solar power in Australia

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’ are d ‘green schemes an r la so r fo s ie d si MYTH: Sub s are going up. why electricity bill account for only er w o p r la so c ti for domes ity bill FACT: Subsidies ousehold electric h e ag er av e th f o around 6 per cent 02. 2 0 2 y b ll fa to st reca of electricity bills. now and this is fo a small proportion nt of bills) ss Australia is just 3

ro 0 to 50 per ce ying renewables ac is network costs (4 ls bil The cost of deplo ty ici ctr les and wires to ele of component ucture such as po str ra inf n tio bu By far the largest tri dis transmission and . – that is, upgrading ce old equipment pla re d an e nd ma de ak pe ing for electricity is th ris le hand ar when demand ye a e es or M tim . w sts fe e co r driving up ak demand’ – thos er) is a major facto st a ju r mm The growth in ‘pe fo su e in tim ys da me w sa e hottest fe used at the ing be all s, few et e dg es highest (usually th ga other outs during th conditioners and m. To avoid black ste at sy th e th ue houses, more air iss on al ain This is the re puts enormous str considerable cost. at – few hours a year, s nt pla r we build extra po power price rises. hours we need to if we want to stop nt ro nf co to s ed price of electricity Australia ne ls is the wholesale bil ty ici ctr ele of t e rising costs. mponen policy against thes The next largest co 4 Solar is an insurance . ls) bil of (20 to 30 per cent

Energy Supply Association of Australia (ESAA):

Energy Users Association of Australia (EUAA):

“Power prices are rising due to a number of factors. Population growth requiring network extensions, ageing infrastructure coming to the end of its 40-year life and rising peak demand, caused by higher use of air conditioning and electronic household appliances, are all putting upward pressure on energy costs”.

“Network prices – the prices charged to transport power across poles and wires make up half of the electricity bill and have been by far-and-away the main contributing factor to the price increases”. EUAA media release, 6 November 2011

ESAA media release, 7 November 2011

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CEC analysis

The Clean Energy Council (CEC) is the peak body representing Australia’s clean energy sector. It is an industry association made up of more than 600 member companies operating in the fields of renewable energy and energy efficiency.

visit cleanenergycouncil.org.au

Last update: May 2012

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SOLAR PV MYTHS AND FACTS Household solar power in Australia

of average Price breakdown electricity bill ehold Australian hous 2%

ie. the cost of Wholesale price tion from sources era gen al tradition gas and like coal

6% 21%

Network charges Other costs

30%

rt Government suppo

41%

for solar

rt for large-scale Government suppo renewable energy energy eg. hydro, wind, bio

Source: CEC analysis

SOLAR AND THE GRID

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MYTH: Solar panels are often installed badly. FACT: The solar industry is well regulated and safe. Solar panels and inverters (the component that converts the power generated by the panels into a form compatible with the electricity system) have to comply with the relevant Australian Standards, and every solar installer must first be qualified as an electrician, and then undergo additional training and accreditation in solar systems. The Clean Energy Council has a free consumer guide on its website to help people ask the right questions and to get a quality product and installation5.

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www.cleanenergycouncil.org.au/resourcecentre/Consumer-Info/solarPV-guide

The Clean Energy Council (CEC) is the peak body representing Australia’s clean energy sector. It is an industry association made up of more than 600 member companies operating in the fields of renewable energy and energy efficiency.

visit cleanenergycouncil.org.au

Last update: May 2012

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SOLAR PV MYTHS AND FACTS Household solar power in Australia

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r expensive

s drive the need fo MYTH: Solar system grid upgrades.

by rising peak n ve ri d is es d ra g r grid up the electricity in t FACT: The need fo en m st ve in t en ffici demand and insu last 20 years. ssion network over the grades to transmi

st of up ses are decades wer bills is the co s which in some ca ason for rising po re re wi st d ge an ist lar les po gle e sin The ample, th r bill, and would ex rastructure (for ex e household powe ag er av e th of nt and distribution inf r ce 6 about 40 to 50 pe old). This makes up wer systems. po lar ally so of ion dit ad e th t (for example, on re ou th wi with or g the day and year r of rin ive du dr es y ke tim a ak is pe s) ty supplies at air conditioner ici eir ctr th ele r on ion ou rn lat tu on pu d ll po an The ca m work thanks to ople come home fro d it’s getting worse an ’ il nd ta re ma of de nt ak ce hot days when pe r pe n as ‘pe 7 It is estimated that 25 ases. This is know 8 g power price incre ungry appliances. s per year. Meetin -h ur gy er ho en 40 of an e th us s ing les ris er e ov a th r d cu on an oc ed growth ly turn events that at is sometimes on e created by peak in infrastructure th t electricity costs ar en tm es inv us ires enormo this demand requ ar. to handle solar. ye a es few tim grades are needed up k or tw ades. ne s, ce iring network upgr in some remote pla grid without requ e th to On rare occasions d te ec nn solar can be co But in most areas,

It is estimated that the installation of a 2 kilowatt reverse-cycle air conditioner costs a consumer around (on average) $1500 yet imposes costs on the energy system as a whole of up to $7000 when adding to peak demand. The $7000 system-wide cost must then be spread across all other customers.9

CEC analysis Department of Employment, Economic Development and Innovation, Queensland Energy Management Plan, Queensland Government, Brisbane, 2011 8, 9 R. Fraser, ‘Demand side management’, paper presented at the Australian Institute of Energy symposium, NSW’s Electricity Future 2020 (and beyond): What will it look like and how do we get there?, 24 May 2010, Sydney 6 7

The Clean Energy Council (CEC) is the peak body representing Australia’s clean energy sector. It is an industry association made up of more than 600 member companies operating in the fields of renewable energy and energy efficiency.

visit cleanenergycouncil.org.au

Last update: May 2012

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SOLAR PV MYTHS AND FACTS Household solar power in Australia

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cut expensive way to an e ar s el an p r la MYTH: So issions. greenhouse gas em solar’s benefits. f o e n o st ju is s n issio s resulting from FACT: Cutting em ed electricity price to help impacts of increas

t the do nothing households offse of carbon reduction s rm fo r Solar power helps pe ea ch r , while many othe a price on carbon e carbon price. to the impact of th ice per tonne of st ju households ad ice, the effective pr pr on rb ca o things e nn to $23 per pensive. But the tw Commonwealth’s power can look ex ty, lar ici so ctr ale ele Compared to the -sc es all s and produc issions through sm ich it reduces emission s: wh t ing reduced carbon em fse th of o tw on rb es e a ca Solar power do mpany can purchas are not the same. alth’s scheme a co ctricity. we ele on th wi mm s Co an e ali th r whereas unde help supply Austr t no es do t bu s ission s. reduces global em ts a lot of local job benefit: it suppor r he ot an s ing br ustry cing emissions, The solar power ind st a method of redu ju t no as ll we up s tically solar stack omic benefits. When viewed holis her social and econ ot ng idi ov pr ly us but of simultaneo

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MYTH: Solar can only ever make a small contribution to our energy needs because it doesn’t produce power at night. FACT: Solar already makes a significant contribution and it’s just getting started. Solar power and energy efficiency schemes are helping cut our overall demand for electricity. Data released in 2011 by the Australian Energy Market Operator (AEMO) shows that overall demand for electricity in Australia actually fell for the first time in decades.10 “The drivers behind this change vary from state to state, however it is becoming apparent that electricity consumers are changing their energy use in response to rising electricity prices, adopting energy efficiency programs and the installation of rooftop solar photovoltaic systems,” AEMO Managing Director Matt Zema has said.11 Solar systems can also be a perfect fit for many businesses that use a lot of power during the day, but almost none at night. Finally, battery and other storage technologies are rapidly coming down in price, with some household systems already sold with storage batteries included. Cost-effective large scale energy storage technologies are just around the corner.

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Statement of Opportunities, August 2011, AEMO AEMO reports power usage dip, Climate Spectator, 6 March 2012

The Clean Energy Council (CEC) is the peak body representing Australia’s clean energy sector. It is an industry association made up of more than 600 member companies operating in the fields of renewable energy and energy efficiency.

visit cleanenergycouncil.org.au

Last update: May 2012

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SOLAR PV MYTHS AND FACTS Household solar power in Australia THE ECONOMICS OF SOLAR

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ly mpete economical co t n’ ca y g er en MYTH: Renewable for power. with burning coal ed. is heavily subsidis ry st u d in m el fu il ss sed electricity syste FACT: The fo The fossil fuel-ba

rnment el playing field. inue to enjoy gove stralia is not a lev Au in et rk ma d fossil fuels cont gy an ed , es wn -o idi The ener nt bs me su rn nt at the gove built on governme in NSW revealed th price y e th uir we have today is of Inq nt lin ce er r pe mb ughly 30 ample, the Ta ns ‘at cost price’ (ro nerators and assistance. For ex al to power statio co : ‘...State-owned ge ld at so th t ne an mi me al ich wh ), em had they et th Cobbora co rk to ma le tors on the open ve been availab ra ha ne uld ge r wo he an ot th by paid er price 12 cess to coal at a low process.’ gentraders [had] ac er nd te a h ug ro th al co d it is just one ch su ce had to sour of the contracts, an life e th er ov n lio $4 bil subsidy of around This amounts to a the bill. ing ot fo e gases ar s er ay taxp for the greenhouse example of where not having to pay by d se idi bs su e. ey caus il fuels have been mental impacts th On top of that, foss health and environ r he ot e onomic th r fo d lculated that the ec they produce, an onomic Review ca al pollution) Ec n loc d ica an er cts Am e pa th im recently in rms of health te (in ing rn bu Analysis published al co air pollutants from 13 damage caused by oduced. pr ty ici ctr ele e th of lue va e th s exceed

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MYTH: All the solar panels are made in China so there are few Australian jobs in solar. FACT: Thousands of Australians are employed in the solar industry It is true that most of the solar panels in Australia are produced overseas. However, there are thousands of Australians employed in the local solar industry. It is estimated that there are 39 jobs directly supported in Australia for every 1 megawatt (MW) of solar installed. In 2011, 500MW were installed, taking the national total to over 1000MW. This equates to around 14,000 jobs.

Jobs in the Australian solar industry: Research and Development – 3 per cent Installations and customer service* – 64 per cent Other (financial, legal, training etc) – 21 per cent

Manufacturing – 3 per cent Distribution – 6 per cent Utilities – 2 per cent

*includes companies performing installations, though this likely understates the utility staff supporting installations through call centres, billing, system inspection and meter changes.14 Due to rounding figures do not add up to 100 per cent. Special Commission of Inquiry into the Electricity Transactions, p.9. Environmental Accounting for Pollution in the United States Economy, American Economic Review, Vol. 101, No. 5, August 2011 14 Review of the Australian solar PV industry 2011, Clean Energy Council, p.18. 12 13

The Clean Energy Council (CEC) is the peak body representing Australia’s clean energy sector. It is an industry association made up of more than 600 member companies operating in the fields of renewable energy and energy efficiency.

visit cleanenergycouncil.org.au

Last update: May 2012

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SOLAR PV MYTHS AND FACTS Household solar power in Australia

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MYTH: We need b ig breakthroughs in solar research an development to p d ush the price dow n fu rt her, so government subsi dies in Australia m ake no difference . FACT: Governmen t subsidies help b uild local econom scale, not reduce ies of technology cost. While there have been so

me important tech primary driver for nology breakthrou the recent cost re ghs over recent ye ductions in solar ha ars, the a result of compet s not been technic itive pressures an al, it has been d economies of sc ale. An independent re port published re cently by the Unive assessment: Phot rsity of Melbourne ovoltaics (PV) and confirms this wind power have of cost reductions historically shown have come from th that a large propor e learnings and ec large-scale global tion onomies of scale deployment – not associa just improvements in technical efficien 15 ted with In other words, wi cy. nding back or shut ting down govern much impact on th ment assistance in e global price of so Australia will not lar panels, but it wi installation costs have ll have a substant by affecting the sc ial impact on the ale of the industry the market. local and therefore levels of competition in

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MYTH: Green schemes help the rich buy solar, subsidised by the poor. FACT: Lower and fixed income households are driving the solar boom. The suburbs with the highest percentage of solar installations are overwhelmingly low- to middle-income suburbs and places with a high proportion of retirees. These are the households that are the most concerned about rising electricity prices. Over 1 million Australians live in a house with solar panels installed.*

In 2012 the top 10 solar postcodes are: Dubbo, NSW – 28 per cent of houses with solar Caloundra QLD – 27.3 per cent Victor Harbor, McCracken, Hindmarsh Valley, SA – 25.9 per cent Pinjarra, Oakley, Ravenswood, WA – 24.7 per cent Currency Creek, Goolwa, Hindmarsh Island, SA – 24.7 per cent Aldinga, Port Willunga, Silver Sands, SA – 24.1 per cent Jimboomba, North & South Maclean, QLD – 23.9 per cent Ellenbrook, Brigadoon, The Vines, WA – 23.8 per cent Hallett Cove, Sheidow Park, SA – 23.6 per cent Ormeau, Jacobs Well, QLD – 23.2 per cent

Renewable Energy Technology Cost Review, Melbourne Energy Institute, March 2011, p.1. 500,000 installed systems multiplied by average Australian occupancy rates (2.5) adjusted down (to 2) to account for high prevalence of retiree households with solar but below average occupancy rates. 15 *

The Clean Energy Council (CEC) is the peak body representing Australia’s clean energy sector. It is an industry association made up of more than 600 member companies operating in the fields of renewable energy and energy efficiency.

visit cleanenergycouncil.org.au

Last update: May 2012

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