In my last solar article: 20 Solar Questions Answered (when I asked 20 questions from Brett the QLD State Manager of Green and Gold Solar here in Australia), I concluded by stating not to be surprised if in 6 months to read about my own solar installation. Well, I’m pleased to announce that’s exactly what I’m writing about in this article – my very own photovoltaic (PV) system.
Over the past two years, I have seen the price for a 5kW solar system plummet from 20k plus, down to around 13k in June/July this year (2012). Before that, but still not so long ago, I remember seeing 5kW systems being advertised for above 30k!
My 5kW solar system on shed roof (image above)
At the present moment, and only 6 months from my last price check at 13k, my system has cost me considerably less than that again; and yes, I can now finally and proudly say for Christmas this year we have given ourselves our very own 5kW solar system. Merry Xmas to ME!!!
The war on solar
I detail all the costs of my install in the article: My Solar Installation 5Kw System On Shed Roof (Installed By Green & Gold Solar) but in this article, I want to explain what tipped me over the edge and convinced me to buy my solar system now and not wait any longer.
The other day, a little birdy told me whilst the residential solar industry is booming and ultimately going from strength to strength, the inside “word” is that many people in the industry are becoming anxious and are starting to wonder if solar will become a victim of its own outstanding success.
The solar industry calls it “the war on solar” and basically this means solar companies and advocates are worried about recent changes in Government attitude and even more so, changes in policy which have deliberately been made to take the “shine” off the solar industry. Things like State and Federal Governments dropping or reducing feed in tariffs (back the grid tariff rates), solar credits, and lump sum bonus rebates on systems.
This worrying trend comes at a time when here (in Australia) the Australian Federal Government has only just introduced a carbon tax, which supposed primary aim was to “save the planet” by reducing carbon emissions through making energy more expensive in the hope we all use less carbon intensive energy and more green energy. Why then, are they taking away solar incentives that encouraged people to install green energy and at the very same time making electricity more expensive by taxing it?
I’ll tell you why, it’s because the Federal Government was never serious about climate change and their carbon tax decision was a political, power bribe, money making racket sold to the people under the guise of environmental responsibility. Because if they really were serious about climate change they would be making it even easier for people to install solar panels rather than harder.
Nah, I smell a rat and it stinks like short term politics to win an election by securing cross-bench support from minor parties, independents, and other green groups. And, just when “main stream” people are turning to solar to help curb their exponentially rising energy costs, governments abandon them.
State governments aren’t blameless either. They’ve won elections kicking out the previous lot on the back of promises to help reduce the cost of living by tackling things like rising power prices, only to do little, deliver their own solar cut backs, and leave us all in despair.
The good news is, regardless of the drop in government assistance, solar PV systems and installation costs are still coming down worldwide… so get that one up ya!
Is solar becoming too good?
But, before we rejoice too much about cheap solar becoming our power bill super hero, could “back to the grid only” solar installs be introduced by governments? I really hate to be the one to seem alarmist, however, I did hear another rumour from within the solar industry walls here in Aussie land (and I must stress rumour is all this is), about some murmurings by bureaucrats from within governments, and other interested parties, on the thought of introducing a totally new solar scheme one which includes a solar cut-off date making premises who install solar systems in the future feed all their generated power back to the grid, then buy it back from the utilities… I’m not kidding.
If the Government did try to bring in this scenario retrospectively for all who have already installed solar, I think there will be hell to pay and I’d be one of many signing up for the class action.
The scenario was explained to me like this – Power prices keep rising and the solar industry continues to boom, more and more residential properties and businesses install solar thus weakening the revenue streams of the electricity utilities because people and businesses aren’t paying these exorbitant prices anymore as they start generating more of their own power. The electricity CEOs start to whinge and whine to the Government (State and Federal), “boo-whoo,” they say, “we’re losing money and we’re not as filthy rich as we once were, we’ll start sacking people and making the grid unstable if you don’t make us into a cash cow once again.”
So, the Government (caving-in to corporate pressure) introduces a “new solar scheme” with a cut-off date stating – any systems installed on or after this date will have to be wired directly to the grid. In other words, the power generated by their solar system will go directly to the power provider instead of through their premises first. The resident or business who installs such a system will then be eligible to buy electricity from their provider at a reduced rate below market costs. Essentially, they will get discounted electricity rates for installing a solar system.
A good analogy given to me was, it’s like a person who grows their own tomatoes but isn’t allowed to eat them. Instead, they must first give them to the supermarket and then later go and buy them back from the supermarket at a reduced rate. Others who don’t grow tomatoes are required to pay full price at the supermarket to buy them.
Sure, this could all be alarmist rumours (and I really hope it is) but historically when things are too good for the consumer, governments or corporations have found ways to make them pay again and whilst people may call it scaremongering I called it calculating all possibilities and not be the one left holding the ball.
Timing for solar was right
Therefore, it’s for that reason and several others which convinced me to get a solar PV system a few days ago (6th Dec 2012). I felt the timing was right with electricity price rises showing no signs of slowing and governments lacking the will to actually do anything about it – they’ve had long enough to sort out rising energy costs and they’ve talked lots with no action; also the price for solar seems better value now (especially from when I first started investigating solar prices), and on a finance plan the payments and interest are actually offset against savings gained by the solar system so it’s a win-win really.
Environmentally, I’ve always been keen to become a producer of clean energy; unfortunately, the cost of solar has been too prohibitive for me and many others in the past even with fair feedback tariffs and government rebates. It’s only now that the window of opportunity arose where competition in the solar industry, and lower manufacturing costs, combined with government incentives gave me the chance to install my system at a fair price.
Feed in tariff
Luckily for me, we purchased our solar system before the Government/s reduced incentives further and we received a good feed in tariff rate with a $1000 (one-off) rebate. The feed in tariff means extra electricity generated by our solar panels goes back into the grid at a feed in tariff of 44 cents per kWh. In other words, my electricity provider pays me for extra electricity I generate. The feed in tariff rate has since changed for where I live (in Queensland, Australia) and is now just 8 cents per kWh, which is a substantial drop and the $1000 rebate has also been scrapped.
But, what does this mean for residents and businesses who buy solar/PV systems now – is it still worth it after the incentives have dropped? Getting a solar system is certainly still worth the cost in my opinion. It’s just that, how they use their solar systems is a little different to those who have locked in higher feed in tariffs by purchasing systems earlier.
For example, those who have a reasonable feed in tariff are better off limiting their power usage through the day (whilst their systems are producing electricity and pumping it back into the grid) because they are getting paid good money for the power produced. In my case, I’m better off getting paid for my generated electricity (at 44c/kWh) through the day and then buy my electricity back by using most power at night charged at a current 24c/kWh.
On the other hand, those who have low feed in tariffs (or none at all) are better off using as much of their power as possible through the day rather than losing it into the grid and then limiting their heavy power usage at night time (when their solar systems are hibernating). So, running the dishwasher, cooling systems, washing machines, and any intensive appliances through the daylight hours where possible makes more sense for someone who installs a PV system with little or no feed in tariff.
Will PV systems reduce further in price?
Do I think solar panel installs will reduce further? Yes, but where do you draw the line? My thinking was, if I wait another 12 months in the hope the cost of installing a 5kW solar system will reduce, I may save a few thousand but spend more than that on power bills anyway. I’d rather be paying my system off than paying a utility giant through the nose.
In a nut shell, I moved to purchase my solar system to beat further reductions in government solar incentives, to take advantage of recent PV system price reductions, to offset the costs of my solar system against fast rising electricity costs, and to become a greener energy user.
Deep down though, the push for us to get solar was driven mostly out of sheer frustration from being constantly ripped-off by paying extreme prices for a commodity which really should be ¼ the price. Fair dinkum, the rise in electricity charges for Australians in the past 5 years has been extraordinary!
Like many other people, we’ve cut back on our electricity usage and I can show significant drops in the number of kW/h our household uses from one year to the next all printed on our own bill from the provider. Yet, whilst consumption has dropped out bills have risen. Collectively as a society, the statistics demonstrate we have listened to the government sponsored ad campaigns patronising us on how to save electricity, but the government didn’t listen to us when our utilities were rising faster than a rabbit out of a hole with a bull-ant on its tail.
The time to get solar for your home or business is right and I hope everyone gets it installed. If the price in a few years is half what I paid for my system, I will be even happier because it will mean more and more families, pensioners, retirees, and small businesses, will have solar within reach and way smaller, cleaner, greener, electricity bills into the future. Let’s just hope the stupid Government’s don’t try ruining it for everyone by blaming those with solar on rising electricity costs for others who don’t have it just so they can justify finding a way to get solar users to pay more.
Anyway, for the first time EVER I’m looking forward to my electricity bill coming in the mail! I feel like I’ve beaten the system, no longer a slave to high power bills, no more electric bill shock, my dream of generating my bit of clean green energy has arrived, and I’m feeling smug and excited all at the same time. Self-sufficient solar… Yes!
In the future, I will be detailing exactly how much my new solar system is saving us in relation to our power bills – I envisage this will take around 12 months to create an accurate assessment. So keep posted and checking back to see how it goes.
How much did my system cost and how did my PV system installation go? I answer these questions and more in my next post: My Solar Installation 5Kw System On Shed Roof (Installed By Green & Gold Solar).
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Thanks for reading and thanks for your support.
Look, and see the Earth through her eyes…
Mark Valencia – Editor SSM
Disclosure: This article is not a paid advertisement and although it mentions my installer (Green and Gold Solar) I was not given any payments, discounts, or special treatment, for stating them is this story. Brett, the manager of the company is a friend of mine and a fellow tennis club member at our local sports centre.