The current Liberal government tries hard to sell it’s Direct Action policy on Climate Change, but apparently all that Direct we-give-you-money-to-create-less-carbon rhetoric only applies to big corporations. Incentives for small scale solar, wind and thermal brought in by the previous Labor government have been slashed, perhaps because they worked too well.
The history of small scale energy generation began in 2009 when Labor used a kind of small ‘d’ direct action policy to encourage private individuals, community groups and business to go ‘green’. Not only would we receive a generous rebate for the cost of the energy generation systems we installed, those systems would then be connected to the grid and the excess energy they generated would be sold to electricity retailers! Win-win.
This description of the Premium Feed-in Tariff is taken from the Victorian government’s own website:
The Premium Feed-in Tariff (PFIT) started in late 2009 and closed to new applicants at the end of 2011.
The scheme offered eligible households, businesses and community organisations with small-scale solar systems of five kilowatts or less a credit of at least 60 cents per kilowatt hour for excess electricity fed back into the grid.
More than 88,000 Victorian households, small businesses and community groups are now benefiting from the PFIT.
60 cents per KWH. That’s more than twice what we were paying the retailers for electricity back then, and those lucky enough to join the scheme during this initial phase will continue to receive 60 cents per KWH until 2024.
Then, from December 2011 to December 2012, small scale generators were offered a reduced tariff of 28 cents per KWH. This was more or less on a par with the cost of electricity generated from coal.
But from January 2013, the FIT plummeted to 6.2 cents per KWH. Now have a look at this pricing schedule published by Origin Energy:
So let’s say you’re on the Residential 5-Day Time of Use plan. From 7:00am to 11:00pm, Monday to Friday, you will pay 39.732 cents for every KWH you use. But any electricity you generate and feed into the grid will only earn you 6.2 cents per KWH.
Yes, your eyes did not deceive you – your electricity created no carbon, but it is worth 6.4 times less than the dirty stuff produced in the La Trobe valley.
Proponents of coal-fired power say that solar, wind and thermal are no good because they do not provide baseload energy, but what exactly do they mean by that?
As I understand it, baseload energy is essentially the capacity to produce the minimum amount of energy required during a 24 hour period.
At the moment, baseload power is provided by coal fired power stations that are belching out carbon pollution at peak capacity, all the time, because:
- it takes so long to get them going, and
- it’s cheaper to run them full on, all the time
There are other energy production systems that are more flexible, but they tend to be more expensive to run. Here in Victoria I believe we rely almost exclusively on coal fired energy.
Now, while it is true that green energy is produced at the whim of the elements, and hence not completely predictable, it can reduce energy consumption at the local level. In fact, the installation of solar panels on roofs since 2009 has reduced demand for baseload energy. So why isn’t it being valued? And why aren’t governments bending over backwards to get more of it?
The problem, essentially, is a clash of cultures. At the moment, coal is king because the operators of coal fired power stations do not have to factor in the cost of the pollution created by that coal. If pollution became a cost like any other, a number of interesting things would happen:
- the price of energy would go up in the short term,
- everyone would scramble to minimize their use of this expensive energy source
- and new technologies would spring up to make other energy generation systems more cost efficient – this would include not only renewables but also batteries capable of storing energy produced from all sources, including coal. [Because coal fired power stations run at full capacity all the time, much of the power they produce is actually wasted].
Unfortunately, none of this is likely to happen in the near term because we are still only paying lip service to the problem of Climate Change. Once the $hit hits the fan, things will change in a hurry, but it won’t be efficient change, and all the forecasts suggest it will be a LOT more expensive than voluntary change now.
So in terms of you and me, are solar panels worth doing any more? From a purely financial perspective, probably not. 😦 You will still save some money off your energy bills by using your own energy, but the truth is we all use more than we generate, and it often tends to be at times when solar is not available [e.g. at night]. So then you have to balance up the savings against the cost of the solar panels and their installation…
When I installed my solar panels and solar hot water, I hoped to have everything pay for itself in about five years years. Not gonna happen, folks. I started out getting the 60 cents per KWH then a strange administrative ‘blunder’ meant that the paperwork proving I’d joined in time disappeared. Now I’m on 28 cents per KWH but apparently that will only last until December 31, 2016. After that I’ll get next to nothing.
Am I bitter? Yes, I am. The Liberals are going to give large corporations lots of money for doing the wrong thing while I am going to lose money for doing the right thing. I really truly wish the Libs would throw some of that Direct Action loot in my direction for a change. 😦