rss
5

Debunking middle class welfare and other rooftop solar myths

Print Friendly

Is rooftop solar really just for the rich and comfortably well off, as its detractors would have everyone believe? Or is it, as some in the industry suggest, already approaching mass market commodity?

It’s a question RenewEconomy sought to address in July, using data from the US, which pointed to the fact that rooftop PV had moved well beyond the niche markets of technology enthusiasts and the upwardly mobile. It found that the average income of solar households in the US was just $US57,000, thanks to the solar leasing model which dominates sale in that country, and allows installations for no up front payment.

Anecdotal evidence suggested the same thing was occurring in Australia – despite some utilities successfully convincing federal and state politicians on both sides of the fence otherwise. Now, analysis from the REC Agents Association provides some pretty conclusive evidence that rooftop solar is proving more popular in struggle street than it does in the boulevards of affluent suburbs.

The RAA – in its submission to the Climate Change Authority’s review of the Renewable Energy Target, says just over half of the 1.48 million solar systems (both PV and solar hot water) installed in Australia are located in regional and rural communities. And in the capital cities, the suburbs with the highest penetration were typically in the out metropolitan mortgage belt.

It noted that the average income of the most popular areas in regional areas was between $43,000 and $49,000. The suburbs with the highest penetration in the cities had an average income of $69,000.

“A broad range of communities have accessed solar under the RET scheme and the … figures explode the myth that the RET is supporting metropolitan middle class welfare,” the RAA submission says.

This table below illustrates its findings.

The RAA analysis also found that the suburbs with the highest income levels did not correspond to those with highest penetration. If anything, the opposite was more likely.

“Solar penetration has been higher in those suburbs with lower incomes,” it says. “In terms of solar system installations in capital cities, wealthy inner suburban suburbs are under-represented …. the (small scale renewable energy scheme) SRES is clearly delivering a clear equitable return to those suburbs by enabling them to reduce their exposure to rising electricity prices.

It would be good if politicians understood this, rather than railroaded and snowballed by networks and energy retailers seeking to protect their own business models, despite their protestations that they are here to save the consumer. As we pointed out in this article, the falling upfront cost of rooftop solar – courtesy of cheap modules and innovative financing – could be a big issue in an election campaign focused on cost of living.

This graph illustrates the point.

The RAA also provided further data which debunks some of the myths about rooftop solar. These are useful to repeat, because as Bill Clinton told the US solar industry last week, the biggest challenge is to make politicians, and the general public, aware of the facts.

Some of these statistics include:

- Around 18 per cent of Australian families now have solar systems. For PV, it is roughly one in ten, although in South Australia, the state with the highest penetration, it is one in five.

- Up to 2,200MW of solar PV will be installed by the end of 2012.

- Solar PV and solar hot water systems accounted for nearly half of the 3.2 per cent reduction in electricity consumption on the National Electricity Market since 2008, delivering both environmental and economic benefits to the Australian public.

- This lower level of consumption helped wholesale power prices to their lowest levels in more than 10 years, and will reduce peak power consumption, in turn lowering network investments and costs to the public.

- The solar industry currently employs approximately 25,000 people driving an investment in skills from the installation and manufacture through to the financing of such systems.

 

RenewEconomy Free Daily Newsletter

Share this:

  • Warwick

    I’m not sure the figures explode any myths…it’s a long bow to draw the conclusion that poorer households are the ones installing PV. Just looking at the average income in a suburb and then comparing it to the percentage of households installing PV is falling into one of the most common logical fallacies in statistics, that “correlation equals causation”. i.e. Just because a wealthy inner class suburb does not install many PV’s may actually have to do with the type of dwelling (such as apartments rather than free-standing homes) that is prevalent. Also, assuming that the average income is reflective of the PV owner’s household income is not necessarily representative.

    It’s all very well to criticise the retailers or networks and some of it may be warranted but there is still a genuine equity issue that has been raised. Essentially those on a low income or are renting a home are unlikely to have the privilege of installing solar. If you look at the recent ABS data for PV installation in Victoria (http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/4602.2October%202011?OpenDocument) and look at the percentage of households by income quintile, you will see that the poorest 20% of households only have 3.1% of homes with PV. If you look at each of the increasing quintiles, you’ll observe 5.5%, 5.8%, 5.6%, 6.2% and 5.4% So, in Victoria, in actual fact, the poorest 20% of households only have half the rate of installations of the rest of society. You could observe that wealthiest 20% install less PV than all but the poorest quintile…so yes, the wealthiest aren’t the highest installers of PV but the poor don’t have high uptakes of PV.

    • http://cleantechsydney.org Richard Hayes

      It would be trivial for the government to allow solar hot water / PV in most Department of Housing properties. As of about 18 months ago the Department did not allow it.

      My company and assume others as well would be very happy to install pv on a 20 yr power purchase agreement at the current discounted retail price that pensions pay.

      In the UK where the solar resources are very poor compared to Australia there are many programs similar to this one.
      http://www.businessgreen.com/bg/news/1869909/bright-future-social-housing-solar-schemes

  • Photomofo

    Ditto to Warwick’s comments and then some. If the opposition is saying PV is middle class welfare let them. So what if they’re right… Don’t argue against the opposition – argue for your proposition. Be forward and pick your field and force the opposition to argue the points on your ground.

    We know that PV in high quantity pushes prices down in the wholesale market. Everybody, whether they have PV or not, should benefit from those lower wholesale prices. This should be a leading argument on our side.

    PV starts out as an option that lowers electricity cost for the entity that installs the system. In the beginning the PV systems are subsidized so there are costs that are spread out into the larger community. PV in Australia grew through the “in the beginning” stage like bamboo on steroids. PV is now growing into a utility.

    Utility: Noun, The state of being useful, profitable, or beneficial

    I see PV as becoming a utility. Utilities aren’t free. We all recognize that utilities need to make a profit but that’s ok because they provide a service that’s worth paying for. Why not frame PV as a utility? The people that install PV get to make their profit but they also share a useful service with the community.

    And oh yeah… No smoke is involved in PV… No Sulfur oxide… no nitrogen oxide… no mercury… no particulate.

    I don’t think the argument for PV should lead with the green aspects but I think they are great closing arguments.

  • http://bigpond Ian Franklin

    While there are traps in inferring causation from correlation, often such data can offer valuable clues. Certainly, these data offer no support for the oft repeated assertion (by climate denier trolls) that PV subsidies are a form of taxation on the poor in favour of the rich. In SA, where solar power has a much greater penetration than in Victoria, the highest frequency of PV installation is in Victor Harbour, where around 40% of houses have solar panels. This is, largely, a retirement community, and I suspect that those who are retired, and who use power through the day, and very likely own their houses, find PV very attractive. While driving around Adelaide I have been struck by the installion of PV in middle class areas, and the paucity in many of the richer suburbs. The inhabitants of these richer areas may well be so well off that they can afford not to install solar panels.

  • Concerned

    “Climate Denier Trolls”
    I thought everyone was allowed an opinion.You demean the argument.