CEC SolarPV Myths&FactsReport V8

Household solar power in Australia
SOLAR PV MYTHS AND FACTS
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
ry expensive. Solar panels are ve MYTH: oming more expensive and bec s are in FACT: Solar panel ay. lly over affordable every d s fallen dramatica
an r systems ha today are more th stalling solar powe talled on rooftops producing and in are still coming The cost of e solar panels ins Th d costs continues to fall. the mid-1950s an recent years, and e first solar cells of w it costs about as a small car; no to produce than th cost as much times cheaper 500 stem could ars ago a solar sy down fast. Four ye TV. the same as a big s? ch as coal and ga ditional energy, su on lar compare to tra luding the return But how does so power source by inc lar is close to the up a fossil-fuelled e life, so st of setting ance over its entir If you count the co a few years. , fuel and mainten per option within t, operation costs investmen ll be the chea sed energy and wi ba al and gas. cost of fossil fuelfossil fuels like co the rising costs of 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.
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 Australias clean energy sector. It is an industry association made up of more than 550 member companies operating in the fields of renewable energy and energy efficiency.
visit cleanenergycouncil.org.au
Last update: August 2012
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are d green schemes sidies for solar an MYTH: Sub s are going up. why electricity bill count for only tic solar power ac for domes y bill FACT: Subsidies usehold electricit of the average ho 2 around 6 per cent 0. cast to fall by 202 of electricity bills. ow and this is fore n a small proportion nt of bills) ss Australia is just
ro 0 to 50 per ce ying renewables ac is network costs (4 The cost of deplo and wires to of electricity bills ture such as poles component By far the largest tribution infrastruc dis transmission and that is, upgrading old equipment. mand and replace electricity is the le rising peak de hand when demand for ore e few times a year driving up costs. M ak demand thos a ) is a major factor The growth in pe w days in summer same time for just e hottest fe used at the ese few highest (usually th gadgets, all being g th other oid blackouts durin conditioners and the system. To av houses, more air issue that enormous strain on st. This is the real puts nsiderable co few hours a year, wer plants at co build extra po wer price rises. hours we need to we want to stop po eds to confront if ice of electricity Australia ne is the wholesale pr costs. t of electricity bills mponen ainst these rising The next largest co insurance policy ag bills)4. Solar is an of (20 to 30 per cent
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Energy Supply Association of Australia (ESAA):

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. ESAA media release, 7 November 2011
Energy Users Association of Australia (EUAA):

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
2, 3, 4
CEC analysis
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of average Price breakdown electricity bill ehold Australian hous

2%
ie. the cost of Wholesale price sources al generation from tradition and gas like coal
6% 21%
Network charges Other costs
30%
rt Government suppo
for solar
41%
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.
www.cleanenergycouncil.org.au/resourcecentre/Consumer-Info/solarPV-guide
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nd just tinkering rou ousehold solar is MYTH: H arket. of the electricity m
the edges
rall ing reduce our ove hold solar is help FACT: House y. annual forecast demand for energ by five per cent its
vised down Market Operator re e Australian Energy Recently, th that . oftop solar power for energy demand eater uptake of ro mand include a gr d this decline in de The drivers behin power network. is ce the call on the uson that this trend has helped redu inister Martin Ferg Federal Energy M ound half of what g, are ar le including , roughly speakin It is agreed by peop ctricity prices which ing wholesale ele suppress count s ago. not taking into ac they were five year r prices, they are lar. regulators set powe ke of household so when state reased upta ver, unfortunately ctors including inc e impact of Howe flect th ed by fa understand and re olesale prices caus il prices to better the reduction in wh how they set reta review Regulators need to wholesale prices. lower s to do this; dy started a proces the same. regulator has alrea an gulators should do The South Australi ves other state re Council belie the Clean Energy
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s drive the need fo MYTH: Solar system grid upgrades.
r expensive
y rising peak grades is driven b r grid up the electricity FACT: The need fo ent investment in ffici demand and insu last 20 years. ssion network over the grades to transmi
up s are decades r bills is the cost of which in some case on for rising powe ist e poles and wires single largest reas The ample, th bill, and would ex rastructure (for ex household power nt of the average and distribution inf r ce 6 about 40 to 50 pe r systems. old). This makes up ally dition of solar powe (for example, on re without the ad with or the day and year peak times during s) is a key driver of oner ctricity supplies at on their air conditi ion The call on our ele thanks to populat from work and turn d its getting worse people come home ak demand an hot days when r cent of retail n as pe 25 pe 7 is estimated that ases. This is know 8 power price incre gry appliances. It r year. Meeting use of energy-hun s than 40 hours pe and the rising occur over les ts that growth only turned on a ated by peak even that is sometimes ctricity costs are cre t in infrastructure ele estmen ires enormous inv this demand requ handle solar. few times a year. ades are needed to . ces, network upgr network upgrades in some remote pla without requiring On rare occasions nnected to the grid 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, NSWs Electricity Future 2020 (and beyond): What will it look like and how do we get there?, 24 May 2010, Sydney
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t pensive way to cu lar panels are an ex MYTH: So issions. greenhouse gas em lars benefits. ns is just one of so issio s resulting from FACT: Cutting em ed electricity price to help impacts of increas
t the do nothing households offse carbon reduction Solar power helps r cheaper forms of , while many othe . a price on carbon of the carbon price per tonne of just to the impact , the effective price households ad ings tonne carbon price $23 per ive. But the two th Commonwealths r can look expens Compared to the es electricity, all-scale solar powe produc issions through sm ces emissions and reduced carbon em two things: it redu on offset which Solar power does n purchase a carb mpany ca are not the same. alths scheme a co ctricity. s with ele e Commonwe supply Australian whereas under th but does not help global emissions a lot of local jobs. reduces nefit: it supports brings another be ustry cing emissions, The solar power ind a method of redu up well as not just s tically solar stack ic benefits. When viewed holis r social and econom usly providing othe but of simultaneo
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MYTH: Solar can only ever make a small contribution to our energy needs because it doesnt produce power at night. FACT: Solar already makes a significant contribution and its 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.
Statement of Opportunities, August 2011, AEMO AEMO reports power usage dip, Climate Spectator, 6 March 2012
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THE ECONOMICS OF SOLAR
ete economically energy cant comp MYTH: Renewable for power. with burning coal . heavily subsidised m ssil fuel industry is sed electricity syste FACT: The fo The fossil fuel-ba
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ment playing field. e to enjoy govern alia is not a level fossil fuels continu gy market in Austr The ener rnment-owned nt subsidies, and e gove built on governme W revealed that th we have today is erlin Inquiry in NS r cent of the price ice (roughly 30 pe example, the Tamb and tions at cost pr assistance. For r sta owned generators sold coal to powe ant that: ...StateCobbora coal mine market), which me le to them had they availab rators on the open would have been paid by other gene a lower price than 12 ] access to coal at gentraders [had er process. it is just one coal through a tend the contracts, and had to source such lion over the life of $4 bil subsidy of around This amounts to a the bill. ses ayers are footing taxp the greenhouse ga example of where having to pay for subsidised by not e. caus il fuels have been ntal impacts they On top of that, foss alth and environme omic d for the other he lated that the econ they produce, an omic Review calcu pollution) the American Econ impacts and local recently in s of health Analysis published al burning (in term co air pollutants from damage caused by uced.13 the electricity prod s the value of exceed
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.
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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
MYTH: We need b ig breakthroughs in solar research an development to p d ush the price dow n further, 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
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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.
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CEC SolarPV Myths&FactsReport V8

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Household solar power in Australia

SOLAR PV MYTHS AND FACTS

THE COSTS OF SOLAR TO CONSUMERS

Costs are falling fast

Last update: August 2012

Household solar power in Australia

SOLAR PV MYTHS AND FACTS

Energy Supply Association of Australia (ESAA):

Energy Users Association of Australia (EUAA):

Last update: August 2012

Household solar power in Australia

SOLAR PV MYTHS AND FACTS

of average Price breakdown electricity bill ehold Australian hous

Network charges Other costs

Source: CEC analysis

SOLAR AND THE GRID

Last update: August 2012

Household solar power in Australia

SOLAR PV MYTHS AND FACTS

nd just tinkering rou ousehold solar is MYTH: H arket. of the electricity m

Last update: August 2012

Household solar power in Australia

SOLAR PV MYTHS AND FACTS

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

Last update: August 2012

Household solar power in Australia

SOLAR PV MYTHS AND FACTS

Last update: August 2012

Household solar power in Australia

SOLAR PV MYTHS AND FACTS

Jobs in the Australian solar industry:

Last update: August 2012

Household solar power in Australia

SOLAR PV MYTHS AND FACTS

In 2012 the top 10 solar postcodes are:

Last update: August 2012

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