Lining up: AGL's Nyngan solar array awaits PV panels. Photo: Supplied.
Australians considering putting solar panels on their roofs might want to get a hurry-on, with prices for a typical system looking set to rise by 50 per cent.
The Abbott government is widely expected to cut the formerly bi-partisan renewable energy target (RET) this year, a move the clean energy industry fears will hit small-scale and utility-sized renewables alike.
Under the RET scheme, the upfront payment for anticipated future power generation lowers the price of a typical 3-kilowatt photovoltaic (PV) system from about $7500 to $5000, according to Melbourne-based Ric Brazzale, president of the Renewable Energy Certificates Agents Association.
Just add panels: AGL's Nyngan solar plant under construction. Photo: Supplied
Despite a rollback in state support and lower feed-in prices, installers were still putting in about 3500 solar panel systems a week during the first half of 2014, although the rate was down by about 1000 from a year earlier, according to Australia Solar Council data.
Hugh Bromley, an analyst at Bloomberg New Energy Finance, says the scrapping of the RET would slash solar panel installations by 20 to 30 per cent in the short term.
“The energy companies hate solar, particularly the gentailers,” said Mr Brazzale, referring to the big three – AGL, Origin Energy and Energy Australia. “Solar eats their lunch on lower demand but also reduces the amount of electricity that retailers sell to consumers.”
AGL's first installers: (L-R) Ray Donald, Bogan Shire Mayor; Ivor Frischknecht, ARENA, CEO; Kevin Humphries, Minister for Western NSW; Brian Stanley, First Solar Senior Vice President; Mark Coulton, Federal MP for Parkes; Scott Thomas, AGL executive; Leslie Williams MP, NSW Parliamentary Secretary for Renewable Energy. Photo: Supplied
The tale is more nuanced, for AGL at least. The owner of Loy Yang brown coal-fired power plants and the main bidder for NSW’s black-coal-fired Macquarie Generation, is also the owner of the country’s biggest wind farm at Macarthur in Victoria.
Last week the portfolio came closer to including large-scale solar with the first panels installed at AGL’s $290 million Nyngan Solar Plant, the largest in the southern hemisphere.
The 250-hectare former wheat farm now sprouts about a quarter of the 150,000 poles that will support 1.35 million shiny black panels, enough to stretch almost from Melbourne to Sydney and back again.
Artist's impression of AGL's solar plant when complete. Photo: AGL
Nyngan and an AGL sister plant at Broken Hill of about half the size beat regional competitors including Mildura in Victoria.
The appeal of solar includes the lack of issues involving water, moving parts and dust associated with other sources of energy.
"It's really nice to come to a facility that doesn't have someone chained to it," said Nationals MP Mark Coulton, whose electorate of Parkes takes in coal mines, gas and wind.
Bogan Shire mayor Ray Donald welcomed the project that will bring 300 jobs to the central plains region at its construction peak and supply power to about 33,000 homes.
In Donald’s view, there’s “far more potential” to develop solar plants such as Nyngan “than might be happening with the coal industry”.
“Coal-fired power plants have a sunset on them – not these,” Donald said, after helping to plug in one of the first panels.
The RET has been crucial to supporting big solar, said Robert Bartrop, a director of US-based First Solar which is building AGL’s solar plants.
Any change in the settings “would make it very difficult for projects like this to be replicated,” he said.
Replication is important. A boom in solar PV for roof tops in recent years has made Australian installers highly efficient, said Danny Kennedy, a former Greenpeace activist turned California-based entrepreneur.
Installers here “are better than most if not everyone,” said Kennedy, founder of Sungevity, a firm providing finance to help spread PV to more homes in Australia, the US and the Netherlands. “They do an install twice as fast as in the US.”
Solar’s spurt – which extends to about 1.2 million Australian homes – supports at least 14,000 workers in communities across the country. Coal-fired power plants employ fewer than 10,000, Kennedy said.
The Nyngan and Broken Hill plants have also provided new revenue streams for companies such as Geelong-based auto parts maker IXL.
The firm, which is battling to diversify away from the shrinking car industry, is supplying the steel posts holding the panels up and was a “surprising” success in the tender, Bartrop said.
Government support, though, has been crucial for the solar plants, with the Australian Renewable Energy Agency (ARENA) granting $116.1 million and the NSW government chipping in $43.3 million for Nyngan.
The Abbott government’s plan to scrap ARENA has been blocked in the Senate with new Victorian senator Ricky Muir lately playing a pivotal role.
ARENA say ongoing uncertainty about their future – not to mention a halt in fresh funds for several years - means its pipeline of potential projects has been blocked.
The Abbott government’s hand-picked panel reviewing the RET – led by former Caltex chairman and climate change sceptic Dick Warburton – this week reportedly asked for more time to complete its recommendations originally due at the end of July.
Prime Minister Tony Abbott and other senior ministers have repeatedly blamed the RET for raising electricity prices.
Even the most ardent RET opponents, though, say the RET costs the average household about $1 a week – far smaller than other imposts such as network overbuild. Taking into account other benefits, such as lower peak demand and near-zero carbon emissions, those costs are outweighed, supporters say.
Should the Abbott government take the axe to the RET, Bromley says the underlying economics of residential and commercial solar will mean the industry eventually will recover.
“Politicians and utilities may try to slow the growth, but it would be extremely difficult and unpalatable to stop consumers who are looking for cheaper sources of power,” he said.
“By 2030, Australian home owners and businesses could own more solar capacity than the combined coal fleets of AGL, Origin and EnergyAustralia.”
Peter Hannam travelled to Nyngan as a guest of AGL.