Energy Expert Questions Solar Panel Rebate

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Monday, 30 June 2008

New Zealand-based sustainable energy consultant Frank Pool has questioned why grid connected PV systems on residential rooftops are being supported with government subsidies ahead of measures such as insulation, solar shading and energy efficient appliances, which are more cost effective options.

The Federal Government's decision to means test the solar panel rebate has drawn criticism from solar companies and Shadow Environment Minister Greg Hunt, who introduced a Bill to parliament last week to reverse the decision.

Under the government's amendments outlined in the May Budget, only households earning under $100,000 a year qualify for the rebate of up to $8,000.

But Parsons Brinckerhoff consultant Frank Pool said in an interview with Environmental Management News "the real question is not whether it is reasonable that the PV subsidies have been means tested but rather why is grid connected PV in Australian cities being supported at all?"

He said while solar panels are the more visible, flashy options in comparison to "boring and invisible" systems such as heat pump water heaters, the reality is grid connected rooftop PV for households will not be a cost effective options for another 10-20 years.

In the meantime, PV systems should be installed in remote mining camps and in communities served by diesel generators, where solar energy is cost effective at current diesel prices. PV systems for these purposes are larger scale and hence produce electricity at a lower cost per unit.

"It seems logical to me to let Germany spend money on PV subsidies, alongside worldwide economies of scale, to eventually reduce the cost of PV over time until it is cost effective on urban roofs, and don't spend scarce Australian government funds on grid connected urban PV when remote grid PV is already economic," Pool said.

For renewable electricity in Australian cities, the lowest cost option is currently grid connected wind power, and in Queensland sugar cane bagasse co-generation, according to Pool. The next most cost effective renewable electricity generation option is then most likely to be large scale solar thermal.