Australia cuts solar subsidies, and not before time
It's becoming competitive, and doesn't need support
Before anybody denounces me as being “anti-solar” I want to put this on the record: I own 16 solar panels, a largish inverter, and because the system was built in the days before grid-connect arrived in Australia, a decent-sized bank of batteries.
Australia is now host to a lively – in fact, heated – debate over the way governments are winding back various solar power subsidies. Last year, the NSW government reduced the “feed-in” tariff that consumers would be paid for power coming from their solar panels; this month, the federal government cut the subsidy it will pay for installing solar power.
That subsidy, which peaked at more than A$6,000, will now be around A$1,200 for a 1.5 kW system.
That is, of course, a trigger for doom-and-gloom statements from interested parties, environmental lobbies, and the solar power industry – but I wonder whether things are as bad as they seem.
One thing that people forget is just how far the price of some solar components has fallen in recent times.
I have on hand a 2008 price list from a solar components supplier. In that price list, a 130-watt panel from Kyocera costs A$1,100. Today, from the same retailer, the best price is under A$800 – a fall of nearly 30 percent in just three years.
That is a pretty dramatic reduction in price – not so much as you might expect if you were accustomed to the computer industry, but significant. And that price deflation has happened in the presence a significant subsidy, which would tend to put a floor under prices.
The removal of the subsidy should tend to drive down prices. Retailers need to keep the stock turning over, and if the prophets of doom are correct, they will have to do so in the face of bankrupt stock hitting the market sometime soon.
Of course, panels aren’t all there is to a solar installation. The other big-ticket items are inverters (grid-connect or standalone, depending on system type) and batteries (for off-grid systems).
Grid-connect inverters have seen some small price deflation – about 10 percent; standalone inverters haven’t fallen at all; and battery prices have risen. Note that standalone inverters and batteries are characteristics of off-grid solar, which doesn’t attract the same government support as grid-connected systems.
All this combines to suggest to me that the market dynamics here are more complex than “subsidy equals success, no subsidy equals disaster”.
Next page: Grid-connect system cost
Component Margins & restrictive practices.
I buy electronc components wholesale. One of my suppliers sells grid connect inverters. The wholesale price for a 2KVA is about $1.6K. Recommended retail is $3.2K. So 100% markup to the installer without counting the installation fee.
Now my issue is that although I'm a qualified electronic engineer and work with 'normal' battery feed inverters for emergency power to fire-stations I can't buy these 'solar' inverters. I have to be a recognised solar installer.
Worse, to become one requires me to do three extremely very expensive courses in site assessment, panel design, and actual installation and then get certified by some self-appointed trade body.
The system is rigged to produce very expensive parts and double rigged to exclude normally competent engineers - who FFS design these bloody systems in the first place!
Price still the blocker (in UK)
Here in the UK, Solar is still not achieveable.
Quite simply - until full installs cost £2,000 not £20,000 (the uk climate makes this a risky proposition, compared to sunny climates), we're really not interested.
We - as a nation - would still rather fork that amount on extensions, patios and conservatories.
A shame - I've got £2k here for anyone that can fit me a grid-linked 1kw PV system, on a east coast, south-facing Central Belt Scotland home. Some sensible prices for vertically-drilled geo-therm would be nice too...
Welcome to the world of electric engineering
The same happened in the UK (with lesser numbers involved) after the annual re-certification+courses for electrical engineers became mandatory about 5 years ago. Prior to that all you need to do was to have an IEE membership which most geeks already had. The markups went through the roof and the quality of work tanked. And the engineers started behaving like complete and total primadonnas.
I am still fixing the "damage" done by one such muppet 3 years ago on my house extension. I had to redo cable runs, unscrew nearly every socket and sort out the cabling in it, move sockets and extensions where they should go, hide cables run in plain sight for everyone to see across walls and along the floor - you name it.
Unfortunately, I had no choice but to employ the aforementioned muppet to do the work because you cannot get a "competed to the building standard" certificate without a muppet signature.