Feeds

Solar lays hands on Holy Grail

Industry claims Australian PV electricity now at ‘grid parity’

High performance access to file storage

While the solar industry continues its campaign against the new NSW state government, which in its first budget cut back further on subsidies to solar installations, another landmark event has passed with much less notice: various experts and analysts now put PV power cost at parity with the cost of buying electricity from the grid.

The claim has been quietly emerging for a few weeks now. The Sydney Morning Herald said so in this piece, and yesterday Business Spectator attributed the same claim to Muriel Watt, chair of the Australian Photovoltaic Association.

Ms Watt told the Ecogen 2011 conference in Brisbane that the unsubsidized cost of solar is now at $1.22 per Watt, which equates to 25c / kWh. That’s low enough, at least in some service areas, to make the whole-of-life cost of solar cheaper than buying your electricity from the grid.

She acknowledged that the price falls reflect the impact of subsidies provided to the industry in recent years, which created demand sufficient that Australian customers got the benefit of economies of scale (a rising dollar hasn’t hurt, either); and Australia’s climate, which delivers more watt-hours per dollar spent than in many parts of the world.

At the same time, energy network costs have been soaring, attributed by politicians to a carbon tax that doesn’t yet exist, but by industry analysts to catch-up investment required to update transmission infrastructure.

Comment: “Parity” depends, of course, on your assumptions. When the Herald published its story in August, I got in touch with Professor Andrew Blakers of the Australian National University’s Centre for Sustainable Energy Systems. Not only was Professor Blakers the source for the Herald’s report, he kindly provided me with a copy of the data model on which that ‘grid parity’ claim is based.

Professor Blakers’ model provides a great illustration of the complexity that lies behind a statement that PV is at grid parity. The claim depends on an estimate of the unsubsidized system cost (which we can assume the industry understands); where you want to install the system; the discount rate you apply to the capital required; system efficiency; and the likely impact of carbon pricing in Australia.

For example, a system in Hobart is not yet at grid parity because it has fewer hours of sunlight per year than Sydney; other cities aren’t at grid parity because their electricity is cheaper than in Sydney.

But the big assumption in Ms Watts’ speech is that systems are at parity over a 25-year system life.

This is reasonable and defensible in terms of how long a PV system can be expected to function, but it may not reflect how long a customer might actually own a system, because of the frequency with which Australians move house.

On the upside, Professor Blakers’ model suggests Sydney (for example) has reached parity on a system life assumption somewhere between 18 and 19 years (if I’m interpreting it correctly).

All of this would suggest that there’s no need for subsidy: the industry could now compete on its own.

However, there is still the issue of up-front capital. It takes a big chunk of lettuce to put solar panels on the roof – and that suggests that some kind of funding model is needed to help overcome sticker-shock (whether that comes from the industry looking at vendor-finance models or the government supporting the capital outlay).

But the big opportunity for the solar industry is in its pitch to industry: there’s lots of spare roof space in industrial parks all over the country; businesses – particularly property owners – have a better idea about how to access capital than householders; and a 25-year system life is similar to the investment life of the property that the system will sit on. ®

High performance access to file storage

More from The Register

next story
Video games make you NASTY AND VIOLENT
Especially if you are bad at them and keep losing
Elon Musk's LEAKY THRUSTER gas stalls Space Station supply run
Helium seeps from Falcon 9 first stage, delays new legs for NASA robonaut
Solar-powered aircraft unveiled for round-the-world flight
It's going to be a slow and sleepy flight for the pilots
Russian deputy PM: 'We are coming to the Moon FOREVER'
Plans to annex Earth's satellite with permanent base by 2030
LOHAN's Punch and Judy show relaunches Thursday
Weather looking good for second pop at test flights
Discovery time for 200m WONDER MATERIALS shaved from 4 MILLENNIA... to 4 years
Alloy, Alloy: Boffins in speed-classification breakthrough
India's GPS alternative launches second satellite
Closed satnav system due to have all seven birds aloft by 2016
Curiosity finds not-very-Australian-shaped rock on Mars
File under 'messianic pastries' and move on, people
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.