Solar facts

Facts about Solar and the Small-scale Renewable Energy Scheme 

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Solar on more than 2 million roofs – More than 2 million solar installations have been supported by the Renewable Energy Target as of 31 January 2014 – 1,176,000 solar PV systems and 845,000 solar hot water systems. This means that 24 per cent of the 8.4 million occupied private dwellings in Australia have a solar system.

More than $1.7 billion invested by Australians in solar PV in 2013 – Data published by the Clean Energy Regulator for PV installations in the first half of 2013 showed that the average investment (net of the value of certificates) of $2,000 per kW. More than 850 MW is estimated to have been installed in 2013 which means that Australian households and businesses invested more than $1.7 billion in 2013 in putting solar PV on their roofs. This is money invested in Australia that will continue to provide returns for Australian households and businesses for more than 20 years.

Solar PV installed capacity amounts to nearly 6 per cent of Australia’s generation – More than 3,161 Mega Watts (MW) of solar PV had been installed on Australian homes and businesses that had been supported by the Renewable Energy Target as at 31 January 2014. This amounts to 5.6 percent of the 55,983 MW of generation installed in Australia.

Solar PV generation amounts to 2.2 percent of total electricity used – More than 3,161 MW of solar PV will produce approximately 4,400 GWh of electricity per annum. The Electricity Supply Association of Australia reported in their publication Electricity Gas Australia 2012 that total electricity supplied by transmission and distribution companies amounted to 202,950 GWh in 2011. Electricity supplied to residential customers in 2011 amounted to 60,150 GWh (30 per cent of total electricity supplied).

Solar PV generation at 4,400 GWh per annum represents 2.2 per cent of total electricity supplied through networks. Residential PV installations (95 per cent of total PV generation) supplied 7 per cent of total residential power needs.

Solar PV and solar hot water are reducing electricity consumption by 0.4 per cent per annum – The contribution of small-scale solar to energy supply (incorporating solar PV and solar hot water) is seen as a demand reduction and its contribution is expected to increase to 3.5 per cent of total demand by 2016. Another way to look at this is that solar is contributing to more than a 0.4% reduction in electricity consumption each year;

Solar PV contributes to meeting peak demand – During the heat wave experienced by South Australia and Victoria in mid-January 2014 solar PV output contributed to reducing the peak demand by nearly 5 per cent. Both South Australia and Victoria would have achieved record peak demand if it had not been for the contribution of solar PV. contribution.pdf

Solar is not “free-riding” on the electricity system – Solar PV systems produce electricity in the middle of the day when demand for electricity is at its highest. Air-conditioning systems are using electricity at peak times in the middle of the day in the middle of summer. Those customers with large air-conditioning systems are being subsidised by other customers without air conditioners. The Productivity Commission found that households with air conditioners were being subsidised $350 per annum from consumers who don’t have one.

Households and businesses that have solar PV or have reduced their energy consumption through efficient appliances and efficient lighting should not have to pay for electricity that they do not consume or for electricity services that they do not use.

Currently, a low-income household without an air conditioner is effectively writing cheques to high-income users who run air conditioners during peaky periods. For example, a household running a 2 kilowatt (electrical input) reverse cycle air conditioner, and using it during peak times, receives an implicit subsidy equivalent of around $350 per year from other consumers who don’t do this. (Productivity Commission Report Electricity Network Regulatory Frameworks, April 2013, Page 18)

More than 17,700 people employed in Australia’s solar PV industry in 2013 – The solar PV industry was estimated to have employed 23,500 people at its peak in 2012 when more than 1000 MW of solar PV was installed. When we include employment in the solar hot water and solar thermal sectors more than 24,800 people were employed in solar – equivalent to full time employees of 18,450. More than 4,300 businesses are active in the solar industry across Australia.

In 2013 employment in the solar PV industry reduced 17,700 as the level of solar installed fell by more than 20 per cent. Full time equivalent employees across all solar sectors in 2013 is estimated to be 13,500.

There is no net cost to customers for the SRES – The cost of the RET that gets passed through to residential customers currently amounts to a modest 1.12 cents per Kilo Watt hour (kWh) or 4 per cent of the average residential electricity bill. The cost of the Small-scale Renewable Energy Scheme (SRES) that supports residential and commercial solar systems currently accounts for 0.54 cents per kWh or 2 per cent of a customers bill and is expected to more than halve over the next two years to account for less than 1 per cent.

The RET provides downward pressure on wholesale electricity prices and as a result wholesale prices are considerably lower than would otherwise be the case. The reduction in the wholesale price due to the RET is estimated to be $6.70 per Mega Watt hour (MWh) equivalent to 0.67 cents per kWh. In the case of the SRES the reduction in the wholesale price (40 per cent of the total RET contribution) cancels out the future cost increase that gets passed through to customers. In fact, residential customers will be better off in the future with the operation of the SRES as the reduction in the wholesale price exceeds the cost pass-through on customer bills. – Final.pdf

Network costs have driven higher power prices not the RET – The Productivity Commission undertook a review of Electricity Network Regulatory Frameworks dated April 2013 and found that spiralling network costs in most states were the main contributor to rising power prices.

“Average electricity prices have risen by 70 per cent in real terms from June 2007 to December 2012. Spiralling network costs in most states are the main contributor to these increases, partly driven by inefficiencies in the industry and flaws in the regulatory environment” Final.pdf

Solar is improving our energy security and reducing our dependence on high priced gas – With the export of LNG to international markets gas is being diverted from the domestic market and this is leading to dramatic increases in gas prices. AGL recently announced that it is seeking to increase its residential gas price by 20 per cent due to rises in the wholesale price of gas.

AGL said the planned export of gas from Queensland was forcing the wholesale gas price to about $6-$7 a gigajoule, up from $4.70 at present. Already, the price in Queensland is estimated at $9.40 a gigajoule. The surge in the Queensland gas price is forcing gas retailers to look to obtaining increasing volumes of gas from Bass Strait suppliers, where the wholesale price is put at $6.25-$6.50 a gigajoule. But supplies from Victoria are constrained by a lack of pipeline capacity.

Solar is installed throughout middle Australia (September 2012 Report) – most solar systems (53%) were installed in regional and rural communities with only 43% installed in the major capital cities. Of the systems installed in capital cities, those suburbs with the highest penetration (number of systems installed in suburb divided by the number of dwellings in that suburb) were typically in the outer metropolitan mortgage belt.

There was a slight inverse relationship between average incomes and solar penetration levels with the suburbs with the highest income levels did not correspond to those with highest penetration, the opposite was more likely. The suburbs with the highest penetration of solar systems in each states tended to be either regional or outer metropolitan.

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