Physical Insights

An independent scientist’s observations on society, technology, energy, science and the environment. “Modern science has been a voyage into the unknown, with a lesson in humility waiting at every stop. Many passengers would rather have stayed home.” – Carl Sagan

The Australian Government’s domestic solar PV subsidy…

with 2 comments

The federal government has recently announced it will scrap the unpopular means test for the federal subsidy for domestic solar PV arrays, which restricted the rebate to households earning less than $100,000.

The size of the rebate was, formerly, $8 per watt of installed nameplate capacity, up to a maximum of $8000. The rebate will now be smaller; $5/W, up to a maximum of $7500.

Sounds good, right? But it’s horrendously expensive – the government is in effect paying $5/W for the cheapest, nastiest polycrystalline silicon PVs on the market.

There are scores of companies jumping on the bandwagon to sell these little 1-1.5 kW rooftop PV systems, advertising and promoting and installing them – because they’re making a fortune from the increase in business resulting from the subsidy.

The government rebate does not cover the full cost of such a system – therefore, in order to get as much interest as possible, the vendors are trying to keep the costs of such systems as low as absolutely possible, so that the cost that the customer pays is as small as possible. Therefore, all such systems are exclusively cheap, inefficient, basic polysilicon devices. After all, an advanced solar-concentrating collector with a high-efficiency CdTe cell or stacked heterojunction cell or sliver cell or whatever does not attract any higher subsidy than the basic polycrystalline Si device.

Advocates such as the Australian Greens say that such a scheme “supports the solar industry” – but all it does is supports the environmentally-damaging low-cost manufacturing of polycrystalline silicon in China, and doesn’t support innovation in advanced PV technology or anything like that.

What if the same amount of subsidy might be better spent elsewhere? Here’s a hypothetical idea to think about.

1. Go and find a suburb or a city or a community which has about 31,000 households. I’m certain there are 31,000 households in this country who support what I’m about to elucidate.

2. Get each household to put up AUD $1200 or so, temporarily.

3. Take that 25 million US dollars and purchase a 25 MWe Hyperion Power Module, or something similar.

4. At 25 MWe divided between 31,000 households, that’s a little over 25 GJ per year, which is a little more than Australia’s present average household electricity consumption. This doesn’t just generate a fraction of your household electricity needs – it generates 100% of it, and there will be no more electricity bills.

5. That corresponds to a nameplate capacity of 807 watts per household. Since the government hands out a subsidy of $5/W for solar photovoltaics with a 20% capacity factor, they should hand out $22.50/W for nuclear energy with a 90% capacity factor, right?

6. Collect your $18,157.50 rebate from the government. Less the $1200 investment, that’s $16,957.50 immediate profit in your pocket. This is exactly the same rate of payment per energy produced that presently exists in the form of the PV subsidy.

7. Go to the pub. Got to stimulate that economy, you know.

I wonder how many ordinary Australian households would support nuclear energy if you paid them $17,000 for doing so?

To replace one Loy Yang type coal-fired power station* with solar cells, we would need 6,082,342 homes equipped with 1.5 kW solar photovoltaic arrays.
With an $7500 rebate for each one, that would cost the government 45.6 billion dollars per each large coal-fired power station.

* (Loy Yang generated 15,995 GWh in 2006.)

Solar photovoltaics typically have a capacity factor of about 20%, and we’ll suppose the panels have a lifetime of, say, 30 years.
Therefore, this scheme costs the government 9.5 cents per kWh generated.

If the government purchases nuclear power plants, they will cost, say, 10 billion dollars (let’s be conservative) for a nuclear power plant with two 1100 MW nuclear power reactors which will operate with a 90% capacity factor and a lifetime of 50 years. The capital cost of plant dominates the overall cost of nuclear energy.

Therefore, the nuclear power plants would cost the government 1.15 cents per kWh – 12% percent of the cost of the solar rebate scheme. That’s the government’s rebate alone – without the rest of the price of these systems.

All this solar rebate is is another mendacious political enterprise involving renewable energy which can’t be scaled up, which hands out free money to the public, makes a bunch of money for the solar panel vendors (including many dangerous fossil fuel vendors such as British Petroleum), and mendaciously makes the government look like they’re actively getting the country running on clean energy.

ASIDE: I’m going to start cross-posting some blog content on the Daily Kos. I think it’s a nice site to engage with many, many readers – many of whom perhaps aren’t already so convinced of the virtue of nuclear energy – so, there’s plenty of engaging, active discussion, and the opportunity to maybe convince some people – even if that’s just a few people it’s still a very positive thing.

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2 Responses

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  1. There are some additional points to consider with solar PV. I suspect the installed cost remains around $6-8 per watt after rebates eg a 2kw inverted grid tie system costing $20k – $8k rebate. Fixed (non tracking) polycrystalline panels are robust and may need no maintenance for a decade. Some States (alas not mine) now offer unsustainable feed-in tariffs up to 45c per kwh on top of the Federal installation rebate. Note Germany has followed this path for years and the economics are questionable. In Australia it may be more effective to design houses to cope better with summer heat rather than generate more solar electricity.

    The subject of feng shui or harmonious siting I think particularly applies to nuclear technology. Hyperion Modules might go over well in mining camps or military bases but I doubt the suburbs are ready for them any time soon. Like it or not I think we will have to have 1000 MW plant in God-forsaken places with transmission losses and water problems.

    John Newlands

    December 18, 2008 at 7:35 pm

  2. I am really glad that I have found this post and I thank you for letting us know about this information.This is a big help for sure!! Thanks!

    Solar panels Melbourne

    April 5, 2014 at 7:22 am

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