Make money while the sun shines
FLICK the switch and the light — or the heater, or television, or airconditioner — comes on, courtesy of the national grid that delivers electricity to the vast majority of Australian homes. But the traditional model of a oneway flow of power is changing, as governments seek to encourage the use of nonfossil energy sources and to decrease the amount of power drawn from the grid system. Feed- in tariffs ( FITs) provide the possibility of consumers with excess power being able to contribute it to the grid as a way of defraying the cost of their power bill.
The idea is linked to the growing use of solar- energy photovoltaic cells to provide supplemental power by households, such as for hot water systems. FITs means that any power generated by PV cells that is not used by the consumer is, in effect, sold back to the grid to cover peak demand. The system works on a net basis, with meters to calculate the gap between power generated and power used.
So far, only South Australia has a FIT system in operation; and it is South Australia which has the highest penetration of grid- connected PV cells. According to figures derived from data provided by the Australian Greenhouse Office, at the end of last year 38.3 per cent of customers of ETSA Utilities had the capacity to return excess power to the grid.
The state with the next highest proportion of power consumers with PV cells was Victoria, with 22.4 per cent, followed by NSW with 20.6 per cent and Queensland with 10.8 per cent.
In the case of South Australia, ETSA Utilities estimates that in the 12 months to February 2008 there was around 2.2 gigawatts of electricity generated by PV systems fed into the grid on a FIT basis.
The feed- in tariff, which is paid by the electricity retailer as an offset to total costs, is set at a minimum rate of 44 cents per kilowatt hour, substantially higher than the retail price of electricity. The average PV system installed in South Australia is 1.6 kilowatts in capacity and would usually generate over 2000 kilowatt hours a year; on average around half the electricity generated by solar electricity systems is returned to the grid. If 1000 kilowatt hours were returned to the grid, the owner would be eligible to receive an offset of $ 440.
Mindful of the success of the South Australian experience, the Queensland Government has introduced a FIT system, which will begin operation on July 1 and will also pay a FIT rate of 44 cents per kilowatt hour. Another aspect of the scheme will provide an equivalent financial bonus for any solar- generated power used by a consumer. Like the South Australian FIT system, the Queensland scheme is guaranteed for 20 years.
‘‘ The upfront cost of a solar power system puts a lot of people off,’’ says Queensland Premier Anna Bligh. ‘‘ We hope that the Solar Bonus Scheme will help offset the initial cost over time. The quarterly bill will show how much electricity a household has used and how much electricity has been fed into the grid, and if there is excess credit in an account at the end of each year, retailers will pay cash to the customer.’’
There are plans to introduce a FIT system in the ACT, after the Territory government announced that it would support a plan put forward by a backbencher; the proposed legislation has received bi- partisan support. The ACT system will be a little different to the South Australian and Queensland models, with consumers who put power into the grid receiving direct payments from the retailer rather than a reduction in their bill. This is meant to make the value of their contribution clearer and therefore stimulate the adoption of alternative energy options.
All of these schemes have been applauded by Brooke Miller, regional director for BP Solar Australasia, which operates the largest manufacturing plant of PV panels in the southern hemisphere, at its facility in Sydney’s Olympic Park.
‘‘ In Queensland, we expect that the number of homes with solar power will increase dramatically simply by recognising the true value provided by residents who generate solar power,’’ she says. ‘‘ As a decentralised technology, solar PV generates power when and where it is consumed. It saves on infrastructure costs such as for poles and wires required to transport electricity long distances, which can be very significant — thousands of dollars to accommodate the installation of an airconditioning unit, by some estimates.
‘‘ We have seen from overseas experience that FIT systems can be very successful in promoting solar energy. A FIT system in Germany, for instance, saw the level of solar energy installed grow from six megawatts in 1992 to over 840 megawatts at present.
‘‘ What we now need is action by Australia’s other governments if the risks posed by both the growing demand for peak energy and environmental concerns are to be met.’’
Empowered: Brooke Miller says solar power saves grid electricity as well as infrastructure costs, such as for poles and wires