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WA solar shocker could be foretaste of an Abbott government

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The Conservative government in Western Australia has stunned solar households in the state and industry bodies after announcing that it would retrospectively slash the feed in tariff that it had introduced in 2010.

In another potential foretaste of the treatment of renewable energy sources by a federal Coalition government, WA said the 40c/kWh export tariff from around 75,000 households would be cut to 30c, and then to 20c next year. The decision was announced in a few lines of the state budget, delivered on Thursday afternoon.

Its decision to make a retrospective cut follows a similar move by the O’Farrell Coalition government in NSW in 2011. That decision was overturned after a huge backlash. It is yet to be seen whether solar households in WA will fight the decision with a similar determination.

However, while the NSW Coalition acted to correct what it saw as bad policy making by a Labor government predecessor,  the WA Coalition’s position is all its own work. It was the LNP government that introduced the tariff in August, 2010, after entering a bidding war with Labor in the state election campaign.

The LNP was warned by industry bodies at the time that the tariff was too generous and a sliding scale would be more appropriate, but it ignored the advice and ploughed ahead anyway, and eventually lost control of the scheme before closing it to new applicants less than a year later after it had soared above the initial 150MW cap.

The decision raises fears that further retrospective policy action could be taken. Since the premium feed-in-tariff ended, another 65,000 households have added rooftop solar in the state, seeking to offset the soaring cost of grid electricity.

There has been speculation – so far denied – that the state government is considering a “bi-directional” tariff, which would mean that households would have to pay the grid operator to put solar back into the grid. A similar decision was taken by the cash-strapped government in Spain recently at the urging of its influential fossil fuel lobby.

Numerous industry bodies spoke of the “sovereign risk” that was created by the decision, be it for residential or even large scale developers, and the potential for further rule changes after an investment is made – and all for the sake of saving an estimated $50 million. The issue of sovereign risk is an important one for investors and developers, because the fear of sudden and retrospective policy changes, usually raises the cost of capital – adding to the cost of a project.

The state-owned network operators have been complaining about solar and its impact on the grid – there is currently 310MW of rooftop solar in the state – accounting for up to 10 per cent of generation at certain hours on sunny days.

But unlike Vector, the network operator in the New Zealand city of Auckland, which is encouraging customers to install solar and battery storage because it can reduce network costs and investments, the installation of battery storage in areas controlled by Western Power is not allowed.

WA’s newly appointed Energy Minister is Dr Mike Nahan, a former head of the notoriously anti-renewable conservative think tank, the Institute of Public Affairs. He recently expressed surprise at the rapid take-up of rooftop solar by the state’s households – and was quoted as saying that 2,000 households were applying to install solar each week (although official data suggests it is 2,500 a month)

He said recently solar PV is “actually putting downward pressure on electricity costs” because people were using less power and generating electricity themselves, and causing less electricity to be generated from coal. But at the same time he warned of further tariff changes to try and recover some of those costs. He flagged a possible interest in fixed charges to households as one answer.

The LNP government has not been an enthusiastic adopter of renewable energy – particularly large scale. WA has made it clear that it believes it has enough fossil fuel capacity in the state and is not encouraging any new large scale wind or solar farm, despite the state’s excellent resources. On the opening of the Greenough River solar farm last year, the Premier said he hoped that the renewable energy target, which provides the primary incentive for such projects, would be removed.

That antipathy to large scale renewables is shared by the federal Coalition, which insists on holding yet another review of the national renewable energy target, but only after dismantling the Climate Change Authority, the independent institution that recommended in December that fixed 41,000GWh target should be retained.

Opposition to the renewable energy target is based around the same issue identified by Nahan with solar – it reduces the revenues and the profits of incumbent generators. The CCA concluded that scrapping or diluting the RET would deliver no cost savings to consumers. A report by the Climate Institute released on Friday underlined the importance that the RET would play in meeting abatement targets.

And while a federal Coalition government is not responsible for state-based feed in tariffs, it will be influential – along with the four state conservative governments – over the pace of reform of electricity markets which most experts say is needed to prevent further gold plating of networks, and to claw back the costs of over-investment in generators and poles and wires that have been passed on to consumers.

Condemnation of the WA decision was widespread: “Households were promised in writing that they would receive a set price for the electricity they exported for ten years. Now they will not even get a third of that. It’s a huge betrayal of public trust, and they have every right to be angry,” said Sustainable Energy Association chief executive Kirsten Rose.

Australian Solar Council CEO John Grimes also said it was a “gross breach of faith” with WA families that raises issues of sovereign risk, while the Clean Energy Council said the decision strikes at the heart of the mortgage belt, where most systems were installed.

Geoff Evans, campaigns manager for Solar Citizens, a grassroots campaign, said nearly $1 billion had been invested by WA families and businesses into rooftop solar. Much of this was done so because of the set tariff.

“The WA Government should be telling more people to make the move to solar, not betraying those who already have,” he said.

Meanwhile, the Greens expressed horror that state-owned generator Verve Energy had allocated $287 million for investment in fossil fuel generation over the next four years, and just $2.5 million in sustainable generation. This included another $200 million on the ageing Muja power station. The government has already spent $266 million trying to upgrade Muja’s A and B before deciding that it was a waste of money.

In 2013/14, Verve will spend $105 million on its fossil fuel generation plant, and just $130,000 on its sustainable energy portfolio, with a small upgrade to its four-turbine wind-diesel generation facility at the remote town of Denham, north of Shark Bay.

“This is a disaster – in the same week that the Australian Senate and the American Meteorological Society both released reports detailing the links between greenhouse gas emissions and extreme weather events, the Barnett government continues to sit on its hands and pretend it’s someone else’s problem,” Greens WA spokesperson Robin Chapple said.  “This budget allocation flies in the face of common sense.”

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  • Warwick

    This presents an interesting dilemma for households in WA…How can you argue both that the networks (that are state owned and you effectively own) should be written down and get a lower return (and less government revenue) yet also argue that your own private investment in PV be protected despite declines in demand for grid power?

    • Paul

      Yeah that’s the paradox.
      At least the WA Govt had the guts to face the music and do the deed before the grid reached a (unreliable) tipping point.

      • Giles

        Well, if that is there intention then they are not very bright, because this particular measure will not impact new installations. It may be simply that they using solar to recoup the costs of its failed coal stategy and the Muja over-runs, which now up to $330m.

        • Paul

          And it may also be they’re mindful that in retrospect it was too generous, on top of that expected demand growth hasn’t materialized, yet variability in the network has doubled and forecasting is becoming guesswork.
          PV is becoming so affordable how do you prevent it overwhelming the networks?

          • Albert Sjoberg

            A process similar to the Controlled load switch that allows the utility to wind down production will prevent the grid becoming unstable, as could an insistence on zero export.

            These problems are not insurmountable.
            Choosing the ‘big stick’ of government increases acrimony, as evident in these comments, rather than making use of inclusive consultation that could increase buy-in.

          • Chris Fraser

            Perhaps by the time PV overwhelms networks on a regular basis it will be possible to store PV electrons economically. Either that, or the network operator can deploy automatic step changers to prevent high voltages in reticulation parts of grids. The second method would have to be used when local storages are full and will indicate to generators that demand has dropped and they are putting too much centralised generation out there.
            Any preference that a network operator has to say that installation of PV must be stoppped because it makes the grid unstable would appear to be very lazy or anti-renewable.

          • RobS

            You may be confused, they are not changing the current FiT in any way, they are changing the FiT for systems installed between july 2010 and July 2011, this change will not impact new solar installations in any way.

      • Ken Fabian

        Intermittency is potentially a problem, even with timely efforts by grid operators to get the grid to cope, but it will definitely be a problem if they continue to resist efforts to do so because irresponsible governments continue to offer them a deny-the-problem-is-serious, do nothing, least cost option on transforming our energy infrastructure.

        Even if storage or grid improvements don’t arrive as quick as we want it won’t be the end of the world – time of use metering looks inevitable and it will do much to shift a lot of demand from evening to daytime. And I expect that switching of energy intensive appliances will end up synched via smart home systems to operate when electricity is cheapest.

        And, if intermittency creates a big enough difference between solar feed-in price and evening peak price demand for in home storage will soar. Of course that should be something grid operators could do cheaper at larger scale, but only if they have the foresight to see that solar is going to be everywhere, like it or not, and their role will increasingly be that of distribution, storage and backup.

    • Giles

      Warwick. quite easily actually. A write-down of assets is the only way to ultimately align the interests of the grid and the consumer. Without a write-down, there is no avoiding that death spiral.

      • Warwick

        But ultimately the network is a social good often owned by the consumer (in the case of state owned networks such as WA) so it is not that clear that “writing it down” is in the consumer’s interest. It’s all very well to argue about what a state government does with its money but these profits are ultimately used to fund other services.

        If PV is reducing demand for grid electricity should people be surprised that their exports to the grid are less valuable and hence their Feed-In-Tariffs are reduced?

        Based on history I suspect we may see a similar situation with battery storage mirroring PV where there are generous subsidies at first and prices start to fall…eventually, when there are significant amounts of storage and less (if any) difference between peak and off-peak prices, people may find that the value of storage is reduced to levels below what they expected.

  • Eb

    I assume a court challenge to this breach of contract would fail, any lawyers out there want to briefly explain why? The Corporations Act is Federal law and if you could get this into a Federal court would the odds be better?

    • RobS

      I would be shocked if the Government hadn’t inserted a clause into the contracts to provide for changing the conditions in the future so that they could do exactly what they have done without breaching the contract.

      • Miles Harding

        So, they win the legal case, but lose the moral one.

        *Sigh*, but no newspaper headline reading: “Colin Barnett lies to the People” because It’s not news and nobody would be surprised by such a headline.

  • Roy Ramage

    The full horror of government ineptitude glaringly displayed. The depth and breadth of their incompetence is breathtaking and will make for massive social unrest. Only the poorest houses dont have computers. Only the poorest houses will not have solar panels. The technology is proven, becoming cheaper, has no moving parts and has gained ready public acceptance. It offers “block power companies” the ability to share free energy with those people who cant afford panels. Major social change initiated by a technology completely beyond the understanding of politicians whose funding comes from outside their party.

  • Motorshack

    The bastard step-child in these situations is efficiency, which no one talks much about.

    However, those of us who take it seriously are barely concerned with this sort of political food fight. We just don’t spend very much on energy in the first place, so we don’t much care which dead horse any given politician wants to whip. Let them do as they please.

    So, good luck to all of you who want to argue over pennies when there are hundred dollar bills just lying there for the taking.

    • RobS

      The thing you are missing in your scotomic efficiency only approach is that solar costs have fallen so much that many efficiency measures like expensive insulation retrofits, double or triple glazed windows are actually more expensive per kwh saved then a solar system wold be per kwh generated. Put another way it is often cheaper to generate kwhs with solar then save them with efficiency upgrades.

      • Motorshack

        Interesting word, scotomic. I’ve never seen anyone but an optometrist use it, but, in any case, no, I would not say that I am blind to the other possibilities that are out there – if that is what you are suggesting.

        Rather, my point is that I make a sharp – and very useful – distinction between accomplishing something by omission and by commission, and in this case there are a great many efficiency measures that can be achieved by avoiding an expenditure altogether.

        So, you are talking about different ways to spend large sums of money, but I am talking about the difference between spending money and not spending it.

        For example, I don’t bother with a car, so I avoid a huge expense, without needing to make any alternative capital investment of any size – in this case a $500 bike, which is less than most people spend on their cars in a single month. And I’ve now ridden the bike for years, with trivial maintenance costs. A few tires and tubes is about it.

        Similarly, my dwelling is very small, so things like insulation are quite cheap – and in my case I recycled a big load of the stuff that was taken out of another building during a renovation project. So, that was free in any event. The contractor even brought the stuff to my door, just so he could be rid of it.

        Also, when I do spend a bit of money, it is my money, not money borrowed from a bank at interest. That cuts my costs dramatically, while still getting the full benefit of the purchase in question.

        Rather than taking a narrow view of my options, what I am doing is to consider all that I can find, but then to rank them in terms of their cost-benefit ratios, so I get the largest payoff for the least investment.

        And this is why I find the whole argument about solar PV subsidies so funny to watch. Any honest, competent solar contractor will tell the client first thing to cut down the load as aggressively as possible, and only then to invest in a solar PV system.

        And my point is that I got so aggressive that my electric bill is less than a dollar a day in the first place. Moreover, if I am not doing any heating or cooling, my daily electric cost is only about 33 cents. So, the power company could triple their rates, and I would still hardly notice the cost. One soda a day would cost me more.

        Furthermore, the local market in which I live is already partially decarbonized, and moving further in that direction on a steady basis. About 28% comes from nuclear, about a third from gas, and only about 12% is still coming from coal. In addition, there is a big project to import lots of nice clean hydro from next door in Quebec.

        In short, I cannot reduce my carbon footprint all that much by investing in solar PV, although I would not need a very big system to meet my needs. As it is, my carbon footprint is already down about 90% in comparison to my fellow citizens, and I have hardly spent any money at all to get to that point. Indeed, my expenses are down dramatically as well.

        Also, my biggest single energy load is winter heating – about 976 KWH last winter – and if I wanted to cut that out of my electric bill, the best way would be to buy a hundred dollars worth of materials, and to build a DIY solar hot air heater to go on the south wall of the building. That would effectively reduce the number of degree-days seen by my heating system, and probably cut my heating bill in half – which is to say, from twenty dollars a month to ten. I could also expect a full payback in one or two heating seasons, and there would be no interest paid to the bank.

        However, with a heating bill that hardly comes to a dollar a day, on average, it is a lot of trouble for a rather small savings, in absolute terms. To be sure, it would pay, but it is hardly a big financial killing. I have already gotten most of the savings that are possible, without spending any money at all.

        Finally, all of this is under my personal control, with no need to hope that corrupt politicians will ever do anything honest or conscientious. I have just gone and made my own choices, without any need at all to get embroiled in futile, infuriating political arguments.

        So, yes, I am laughing, and quite hard, at discussions like this one. No doubt about it. But it is not because I am too blind or too rigid to see any alternatives. Rather, it is quite the opposite.

        I trust that answers any questions that you might have had. If not feel free to rephrase and post again.

        • RobS

          I am by no means suggesting efficiency measures have no role to play, my use of scotoma is to suggest a degree of tunnel vision focusing on one solution to the exclusion of others. I fully support cheap efficiency measures. However you sidestep my point by using examples of phenomenally cheap efficiency measures, if you can cut your heating bill by half with a $100 device then of course that is worth doing. My point is that most people would have to spend thousands of dollars on having foam insulation injected into their walls and added to their ceilings or similar amounts on installing more efficient heating devices like ground source heat pumps to achieve that.

          My bigger point is that as most efficiency measures, or at least the ones to which I am referring are relatively expensive, as the cost of generating kwhs with solar or other renewables fall we must be aware that at some point each potential efficiency measure will reach a point where the $ per kwh saved is more expensive then the $/kwh generated by a renewable source. You make the point “any honest, competent solar contractor will tell the client first thing to cut down the load as aggressively as possible” and I agree that since solar was developed this was absolutely a true statement, primarily because solar from it’s inception has been so expensive that almost any efficiency upgrade was cheaper then the additional panels needed to generate an equivalent amount of power. My point is that this assumption will not remain true forever.

          Just say a new heat pump is going to cost $3000 and save 20,000kwh over its lifespan vs your current heating, this means that this purchase will cost 15c/kwh saved. If I can buy a 5kw solar array for $20,000, that solar array can generate ~160,000kwh over its lifespan, this means that this system can generate power for 12.5c/kwh. Therefore if you “aggressively” pursued efficiency by upgrading your heat pump you would be worse off then if you simply installed a little more solar capacity to generate those additional Kwh.

          The era where “aggressive” efficiency upgrades were always cheaper than additional solar capacity is over, each potential measure must be assessed by looking at $/kwh saved against the $/kwh generated of available solar systems.

          • Motorshack

            Once again, by “aggressive” I mean aggressive avoidance of expenditure. Period.

            You cannot do better than spending zero dollars, and that is my target: zero cost, or as close as I can come, while still getting the desired effects.

            Thus, the sort of comparisons that you are talking about are simply irrelevant in my world.

            I do not care how cheaply I might buy a KWH from one source or another if I do not need the energy in the first place.

            Actually, by my standards, spending a whole $160 a year on heat is rather extravagant. I went a number of years without spending anything at all, but that was a trifle spartan for New England, so now I am spending a bit more than I did in those days – but still vastly less than most of my neighbors. In fact, by a factor of about fifteen or twenty.

            Also, I have to say that I am quite fascinated that most people find this notion so hard to comprehend, because it is really very simple: just do not spend the money – on anything.

            However, as soon as I say that, the reaction, if there is one at all, is usually much like yours. A long complicated analysis, full of unspoken assumptions that, on close examination, are simply not true.

            For example, you talk about spending thousands on a big heat pump, but why would I do that? The capital expense would cover about twenty years of my heating costs, at today’s prices, and it would take decades more to get a full payback.

            Instead, I keep looking at ways just to reduce the amount of energy I need in the first place, which, so far, I have managed with almost no financial cost at all.

            In effect, you are saying to me that it would be smarter to invest thousands in a PV system to generate lots of energy, apparently on the assumption that I will need that much energy – but I just don’t need it.

            So, what would be the point of spending the money?

          • RobS

            I don’t see the point of discussing something which essentially applies to you alone and you find ridiculous. In the real world people are making decisions about whether to have their house double glazed or have higher grade and more expensive insulation installed. Between CFL’s and LED lights. I presume when you say you have been able to reduce your heating bill by simply running your thermostat colder or scrounging insulation on the cheap from surplus building supplies etc. either way most people are not willing or able to consider such options and efficiency measures in the real world come with a cost and I am simply talking about the need to analyse the cost efficiency of those upgrades versus the cost efficiency of renewable generation.

          • Motorshack

            My thermostat is set at perfectly normal temperatures, slightly above 70F in winter, and in the high 70s during the summer cooling season.

            In general, my lifestyle is about like that of a college student in a normal dormitory, except that I do not have to put up with a roommate. I have all the modern conveniences, and about 35 square meters of total floor space – not counting considerable cold-storage elsewhere in the building.

            Again, you are making completely erroneous assumptions about how I live, apparently because the word “efficiency” has certain connotations for you that do not apply to me.

            What I find frustrating is that much of what I do is easily applied to any household or small business, but I cannot get people to pay attention to what I am actually saying. Instead, they react to what they assume I am saying, and they are therefore not reacting to the real story.

            At least 90% of the energy flowing through the average house is a dead waste. Period.

            At least 90% of the stuff that is sold today is in a landfill within six months. Period.

            I just do not spend money on stuff that was never necessary in the first place. That’s all there is to it.

            As I said before, efficiency is not spending thousands on an unnecessary heat pump (for example).

            Efficiency is a matter of staying comfortable on a tenth of the usual energy. And simply not buying the other 90%.

            Efficiency is not buying a car with better mileage, and paying for it 100% of the time.

            Efficiency is paying for a car only for the 2% of the time that you actually need it.

            How is this applicable only to me?

            And why should it provoke an argument?

            These things are cheap, they are easy, they pay spectacular returns, and they are just about 100% guaranteed to work.

            So, what’s the problem with that?

            Seriously.

          • RobS

            The real world is the place where all the people who you can’t get to listen to you live. You get annoyed at me for “making assumptions” then completely confirm them by saying you live a like a college student, you consume 90% less than the average household and most people are not willing to pay attention to your methods. The reality is that most people will not make the sort of cuts you are talking about without being forced to. You laughing at them doesn’t help either. I acknowledge that some efficiency measures like turning off light when not in use cost nothing and therefore have infinite return on investment. However other efficiency measures like upgrading to LED lighting do come with costs that must be considered. They may not be efficiency measures that you are interested in, but they are ones that I and many others are interested in. You have decided on a range of measures that work in your life, for example renting a car when necessary, your flaw is stating that they will work “just about 100% of the time”, for example your car suggestion would not work for me because I am on call as a doctor and require a car with no notice in the middle of the night frequently. Therefore for me the viable efficiency option is the better mileage car.
            You say people won’t consider all their option, however I am supporting all of the options you have mentioned if they work for you and I support other options like improved heating, mileage and lighting upgrades if they work for others. It seems that you are the one ruling out options not I.

          • Motorshack

            Okay, fair enough. Let’s take a careful look at your car and your function as a physician (which also explains a vocabulary that includes words like scotomic). My father happens to be a doctor, and I was once a pre-med student for a few years, so I think I can get into a bit of realistic detail here.

            If we assume that, at least some of the time, a doctor and patient need to be in the same place together, and that they don’t normally hang out together anyway, then, obviously, someone will have to move around a bit to make the meeting possible.

            You then leap immediately to the conclusion that you personally must have a car at your disposal at all times. However that conclusion only makes sense if there are several other assumptions in play.

            For example, you assume that there is no conceivable system in which ad hoc transport is sufficiently responsive, but there is nothing inherently true about that assumption. It is true enough in many places today, but not inherently so.

            Certainly on the patient’s side of the situation, there are services that will get the patient to the doctor at a moment’s notice. So, if we can manage ambulance services, why not a specialized taxi service for the doctors as well?

            Now, this is the point at which most people will say the idea is preposterous, and will never happen. However, that is not the same thing as saying it could not be done, or that it would not be cost effective if it were done.

            In other words, “has not happened yet” is not synonymous with “will never happen”, but most people take it that way, without even thinking about it.

            And that is the sort of hidden assumption that I hear in your statement that you must have a personal car at your disposal at all times. Perhaps that is effectively true today, but it is not true in all conceivable worlds.

            This may sound like mere logic chopping, but, as an engineer, I can tell you that this is precisely the sort of careful analysis that is used to solve any number of seemingly “intractable” technical problems. What we want is not possible in the existing world, so we start to imagine what sort of world we would need in order to have it be possible.

            Actually, as a physician in your personal car, you cannot move as fast as an ambulance can, because you have no siren or lights, but suppose that a specialized taxi did operate like that. Not only would you not need to pay for your own car all the time, but when you did need to get somewhere in a hurry, you could actually go much faster, as well.

            Of course, this is why we have emergency rooms with doctors standing by 24/7, so that once the ambulance gets the patient there the transport problems are fully solved.

            Anyway, the abstract logical point here is that detecting and analyzing unexamined assumptions is tricky business, and is in fact something of a conceptual scotoma. People do not go looking for their blind spots, because they are not aware that they have them.

            However, it is precisely in these blind spots that great opportunities are often hidden, and that is what I am trying to get across. As a computer software designer, I spent decades, first cross-examining my clients to find out what they were trying to accomplish, and then helping them to break out of the conceptual boxes in which they were often trapped.

            And this is why I can live so cheaply and comfortably now. It is not that I am a hard-ass who is willing to put up with almost anything to save a dollar. It is rather that I know how to look in lots of odd corners until I find the hundred dollar bills that no one else is seeing.

            In particular, most people are caught up mentally in a horrible rat-race that hardly leaves them with the time and energy to look for useful alternatives, much less any skill for that sort of thing. In contrast, I have always left many hours a day for calm consideration of such questions, and it has always paid handsomely.

            The first benefit, and arguably the biggest, is simply that I am not caught up in the rat-race, so my life is a lot more pleasant, even before I start to profit from my approach to problem-solving.

            And then, I managed for years to earn a substantial income working only six to eight months of the year, and even when working my average work day was really only four or five hours, even if I was in the office longer than that.

            Again, this was possible because I stopped to think carefully about what I was doing, why I was doing it, and how it could best be done. Nor was there anything exotic about this process, any more than studying a map before starting the car is exotic. I just did not go anywhere until I had the trip properly planned, and, as a result, I only rarely had to back up, or otherwise waste any time, money, energy, or materials.

            So, the clients would assume that a given task would take, say, a month, because that is what most people needed, given their inefficiencies, but I could get it done in a week with careful planning, so naturally, if I delivered in two weeks, I tended to be something of a hero, even though I was working at half speed.

            And this is all that I am saying to people like you. Just develop the habit of thinking harder and longer about what your choices really are. Include lots of seeming weird or impossible ideas, just to see what you can make of them.

            The self-described “realists” in the crowd are forever dismissing ideas that they “know” are ridiculous, but they are not actually thinking about them, even though there might be huge rewards for doing so. Instead, they are merely assuming what they want to prove, which is logical nonsense.

            I literally used to make millions of dollars for my clients, and the irony is that I have very little use for money myself, as you have already heard. However, that is perhaps why I can do clever things with money and other resources. I am emotionally detached from such questions, so it is easy to think clearly and creatively.

            Anyway, the net result is that I walk through a social world in which nearly everyone I see spends the majority of their time banging their heads against the nearest brick wall, and I fail to understand why people do that. It is obviously very painful, and, since I do not enjoy pain, the obvious conclusion for me is to avoid the head banging.

            And I suppose it comes off as unkind to laugh at folks like that, but every time I ask someone why they are doing it, I get such ludicrous answers that I pretty much have to laugh.

            Constant slapstick, as far as the eye can see.

            And, of course, doctors are deeper into the rat-race than almost anyone else. It appears to be a point of pride, in fact, so perhaps that is why you have trouble understanding my whole approach to things. I am seriously laid back about money, and most other resources.

            I am formally retired now, and collecting a pension, but for the five years prior to retirement I worked an average of one day a week, and did just fine. My income was a fraction of what most people here think they need to earn, but I was apparently the most secure guy in the crowd. No mortgage, no car payment, trivial utility bills, etc.

            And constantly dumbfounded by the rat-race swirling all around me.

            Anyway, I remain pretty convinced that all the folks commenting on this website, and many others, have not yet begun to consider the full spectrum of options out there.

            Not even close.

          • RobS

            I am an anaesthetist, sometimes people die if I take 3 minutes longer to get somewhere.

          • Motorshack

            Okay, so we let the gas passers keep their own cars. No problem.

            However, I grew up in a town that was intersected by two different train tracks, one north-south and one east-west, and we had mile-long freight trains in both directions several times a week at unpredictable times.

            So, if it is really that tight, I’d be considering a small helicopter.

            The general point is that there is no general case. You always have to look at the details of the particular situation, both to understand the particular obstacles, and to find adequate alternatives.

            You are presently in the position of using a very special case to justify a very general conclusion. After forty years in the logic business, that strikes me as dubious.

            My only real point here is that there are almost always far more opportunities in a situation than most people normally realize.

          • RobS

            I hear where you are coming from, our new anaesthetic machines are fully computer controlled. When I started an anaesthetic machine was a series of pipes, visual analogue gas flow meters, manually controlled valves, mechanical anaesthetic vaporisers and mechanical ventilators. The new ones are a giant white box full of miles of computer controlled gas pathways and tens of miles of wiring. We used to spend hours pulling them apart to pinpoint leaks and troubleshoot flaky behaviour, eventually if we couldnt find the issue we’d call in the biomed technicians. Nowadays you need an IT guy not an anaesthetist or even a biomed guy to diagnose and fix most of the things problems. I dread to think what havoc the thing could wreak if its programming told the thing to do one thing whilst it told us it was doing another.

            I also agree that everyone is different and need solutions to match their specific circumstances, I think you are a perfect example of someone who is willing to de-energise their home and lifestyle in a commendable way. The reality is though not everyone is willing or able to achieve that in their lifestyles. If other solutions work for them like cutting their lighting bill by 80% using LED’s I don’t think that’s any less valid or commendable. Similarly not everyone has the time or inclination or plumbing license for that matter to construct their own solar hot water system as both you and my father did, I do have the financial resources to cut my hot water heating electricity use by 90% by having a commercial solar hot water system installed.
            I spent three years cruising on a sailing cat, our power needs were supplied by 360W of solar panels and 400W micro wind turbine, a modest battery pack with ~2 days autonomy and a small diesel genset to take up the slack if low wind and solar inputs lasted more then a day. I know how fulfilling life can be living such a lifestyle and fully intend to do more of it in the future. However at this point in my life with a partner and teenage children it is not my highest priority, but that doesn’t mean I don’t try and build efficiency into our current lifestyle where possible.

          • Motorshack

            Yeah, I used to think it was scary to be a doctor’s son, and to go to the hospital after hearing about any number of bad mistakes in the course of family dinner conversations, but now I cringe at the thought of getting in an MRI machine. There is a classic case, some years ago now, of a badly written keyboard handler causing a gigantic radiation overdose, and killing a patient. No urban legend there; I got the story from a text on safe software design methods. Not much on airplanes either, for the reasons already mentioned. I could literally write a book on the subject, and many have. Unfortunately to less good effect than one might hope.

            Anyway, after close to thirty years of thinking about really scary design problems in complex systems, I got pretty good at looking in odd corners, and thinking about very indirect chains of events, and that is what bothers me about a lot of the discussion of public issues. I don’t really expect all that many people to be anywhere near as aggressive as I am about that sort of thing – most have never had that sort of practice – but I do wish that more people would at least listen for a few minutes, and actually try on an idea in some detail, instead of just reflexively saying, Oh! I could never do that.”

            In particular, people seem to go on at great length about their problems, most of which appear to be self-inflicted. The most common is to finish school, start borrowing money from banks, and then to struggle for the rest of their lives to service the ever-growing debt. Some of us – not very many – avoid all that simply by not borrowing the money. It is stupidly simple, but almost no one will do it. Why, I don’t know.

            You commend me for “downsizing” my life, but I see it as not loading myself up with seriously burdensome junk. My actual life – that is to say my physical and mental existence, as opposed to any property that I might own – is entirely normal for all practical purposes. I have all the physical necessities, certainly, and my mental life is absolutely crammed with interesting stuff. I have raised a family, traveled the world, read thousands of books, done interesting (albeit scary) work. Nothing small about my life at all.

            I just do not waste time, money, and energy on stuff that I do not need or like.

            So, I have very few complaints.

            Rather, I have quite a wealth of methods for solving problems that seem to plague a lot of people, even though I scarcely bother with money, which is what most people seem to think is the key problem-solving resource.

            I will spare you further commentary on these points. I appreciate the kindly-intended words in your last post, but you still phrase some things in ways that make me think I am being stereotyped in a less than productive manner. I’m not suggesting anything blameworthy, but, as one might say in math class, you seem to have the sign wrong. My life is not characterized by what I avoid doing, but rather by what I can afford to do because, unlike most people, I have the time at my disposal.

            Everyone wants to be rich so they can afford to quit work, and do what they please, and then most never get rich. So they get the worst of both worlds.

            In contrast, I first freed up the time by deliberately and arbitrarily working less, and then I ditched enough non-essential economic junk so I could actually afford to take that much time off work, and do more interesting stuff.

            Even billionaires probably have less free time than I do, because they have to manage all that money, run a staff of servants, and all the rest.

            I am barely above the official poverty level in terms of money, but I am fabulously wealthy in terms of discretionary time.

            We all know that time is the one resource that we can never recover once it is wasted, but how many people actually make that their highest priority? Apparently damned few.

            So, my basic question for all of you is: are you happy with the way you are spending your time?

            And if you are not entirely happy, what are you going to do about it?

            Just one last clue: bitching about politicians is probably not relevant to those two questions.

    • Giles

      Enjoying the discussion. Interesting points all round. Motorshack, I know of a few people with your philosophy, and taking similar actions. I admire it, though it’s not for everyone (yet). But here’s a challenge. Transport yourself to NSW, where you are paying more than $1 a day just to have grid connected. And this will likely double if networks have their way. So imagine starting point is $2 a day to connect, and then add your $1 a day of consumption. Will you cop it, or take other action. And what will it be?

      • Motorshack

        Hi, Giles,

        Glad you are enjoying the discussion, and in fact I have given some thought to precisely that. It’s not that tough a problem, in that someone with a load as small as mine could easily go off-grid entirely. So the short answer is: screw the incumbents and their gold-plated network. They did not consult me about their misguided plans, so I feel no compulsion to bail them out.

        I stay on the grid here because prices are not that high, and our generators are relatively green already. However, I have considered any number of contingencies quite carefully.

        First, just by moving to NSW my heating bill would largely disappear, so there is a third of my electrical demand gone right there. According to Wikipedia your summer temperatures are also quite mild, so I would also need less cooling, perhaps none at all. Plus, I would rent a basement apartment, if I could, and be instantly sheltered from most temperature extremes from the outset. If I had my own property, then I would build partly underground in the first place. Thus, about half my electrical load disappears just by moving, and by choosing the right sort of dwelling.

        Second, two dollars a day is $730 a year, after taxes, even before actual consumption charges, so that alone is a good start on paying for a small PV system with storage. Plus, I have the technical competence to do most of the work myself, and I can muster the cash to buy the components without borrowing from a bank. So, let’s say 1KW of panels, and three KWH of storage, plus controls, etc. Off the cuff that ought to be possible for something like $3K, so the avoided connection charges alone pay for it in about four years. More than adequate payback. Even if the cost is $6K, the payback is still quite reasonable.

        Third, people get sweaty about storage giving out if they go too long without enough sun, so they feel compelled to stay connected to the grid (or to buy lots of storage), but that does not happen very often, and it is probably even less frequent in NSW than it is here. So instead of staying connected or buying too much storage, I would just buy a little 1KW gasoline generator for backup, and, if necessary, run it for an hour or two to top off the batteries on the rare occasions that it is necessary. People here have these in case of winter ice storms, even though they are otherwise getting their power solely from the grid, and they work very well. The combination of a generator and storage is cute, because you can run the generator for just a couple of hours at full load, and then shut it off for the rest of the day. No need to run it 24/7. The noise very obnoxious if you run round the clock, and it is relatively poor efficiency as well. Better to run full tilt for a little while and then to shut down entirely.

        Fourth, solar air heaters reportedly do a great job of heating a space, so I would depend upon something of that sort for the little heating that I might need. Also lots of options for cheap thermal storage – pile of rocks, tank of water. All very cheap, all very simple and reliable. There are also clever designs that keep the house at a steady 70F and do it completely passively, but that is a much bigger design process. A little air heater, with some cheap storage will probably do well enough.

        Fifth, solar hot water for bathing and washing. Again, perfectly well understood technology, known costs, lots of DIY plans, etc. $1K for all the hot water you need. It is a lot cheaper than most people would suppose from looking at commercially available systems. Those are often grossly overpriced. Works for space heating as well.

        So, there is a quick sketch, which is obviously not all that precise, but should be the right order of magnitude for costs and benefits. About $5K altogether, and maybe a hundred hours of personal labor.

        Additionally, I would perhaps buy a very small scooter for longer-distance transport, if I were not living close to shopping, libraries, etc. However, since I would be moving anyway, it would make sense to choose my my location carefully in the first place.

        In fact, that is apparently the biggest problem most people seem to have. They have gotten themselves stuck living too far from work, and they do not want the hassle of moving or changing jobs. However, my son just spent a few months finding a new job a mile from home, and he wangled a raise as well, so it is well worth considering, because he dropped about $400 a month in commuting costs by changing jobs. He not only got a raise in salary, but about $5000 in annual savings, in after tax dollars, which is to say a six or seven K boost in disposable income, or saved work time, just from the avoided commuting.

        Anyway, the short answer is that those prices would be more than enough to make me go off grid, and, as I say, given my tiny load, it would be very cheap.

        The key is the tiny load, which is at the heart of this whole discussion.

        Otherwise, the prices I am quoting (off the top of my head) are quite standard, and dropping steadily, as we all know. My real advantage is that the small load makes adequate storage quite feasible at a reasonable cost. The batteries are still somewhat expensive per KWH, but I just would not need very many of them, so the required capital remains modest in absolute terms.

        Indeed, the high fixed connection charge would give me great financial incentive to get off the grid, even though being charged purely for my consumption would not. So, I would get a fast payback on a relatively small system, which is the best of all possible worlds.

        This is, in fact, why I do not understand the attitude of most of you folks. In effect, the network has just offered you more money to go off-grid, so why argue with them? Just go ahead and collect the money by going off-grid.

        So, I’m still inclined to laugh. They are dumping money in your lap, and you are all crying about it. Doesn’t make sense to me.

        • Giles

          Well, that was the response i was anticipating. The networks continue to provide the economic incentive for people to dump them and look after themselves. Couple of quibbles though with your scenario – not many basement apartments in NSW (and why would you with this lovely weather), and as soon as you get 10kms inland the sea breeze doesn’t do much anymore, so people turn to air-con. Still, i’m a little over 10kms inland and i do without air-con. There’s about 12 hours a year when i think that’s a really bad idea.

          • Motorshack

            Yes, below-ground apartments are fairly common here, but I wouldn’t know about NSW. However, the general point is that there are lots of ideas like that for managing ambient temperature that are very low-cost or free. I just tossed out one example that I know from personal experience can work very well.

            The basement of my current building ranges from slightly below freezing in winter to about 65F in late summer. The first winter I stayed here, before I had properly moved in, I actually had a bed tucked in a corner of the basement, with no heat, and all I needed to stay comfortable at night was a cheap sleeping bag.

            Of course, I had only myself to consider, and, as a former Boy Scout and former soldier, sleeping in slightly unconventional places is a very ordinary thing for me. Others might well be more squeamish, even though in practice one can be perfectly comfortable. It’s just the superficial appearance of the thing that is a bit odd, and is therefore enough to discourage many. Or so it would appear.

            Also to emphasize a point that I did not note yesterday, using savings instead of borrowed money to buy a small system will cut enough of the overall costs to get you effective grid-parity right now. And needing only a small system also makes the investment more feasible than it would otherwise be.

            And this is the ultimate reason that I am so aggressive about cheap efficiency measures. It gives me a lot of maneuvering room that other people cannot arrange for themselves.

            Nor do you really need huge leverage in many cases. The stage magician Harry Houdini used to escape from a strait jacket by dislocating his shoulder, thus giving himself enough slack to wiggle out. So, in similar fashion, I don’t worry about grand, one-shot, strategic solutions to problems. Rather, I keep looking for little bits of slack, wherever I can find them, and eventually it can add up to complete freedom of maneuver.

  • Professor Ray Wills

    Dipping into the archives, here is part of what SEA said 18 months ago 16 May 2012 – still appropriate today.

    >> Premier Colin Barnett is reported to have said that the solar panel subsidy scheme “has cost much more than was originally intended” and “demand was underestimated”.

    >> ‘It is unfortunate for the Premier that the Sustainable Energy Association’s advice provided to Government prior to the May 2011 Budget was not heeded – in the months before the 2011 Budget, SEA advised the Government to plan to ease back the tariff.’

    >> ‘That same SEA advice warned the Government that changes to subsidies need to be strategically rolled back to establish a glide path for market development, not coarsely readjusted – unfortunately that advice was not heeded either.’

    >>’Government failed to take the advice of the industry on the changes to the feed in tariff, and the renewable energy industry continues to be plagued by Federal and State Government decisions made with inadequate consultation and that lead to boom/ bust cycles and fail to provide the conditions needed to grow the industry sustainably.’

    Full details here: http://www.seaaus.com.au/content/view/483/145/ and SEA’s CEO Kirsten Rose current response here http://www.seaaus.com.au/content/view/524/145/

  • Chris Fraser

    My petititon is to the power transmission professionals who happen to read RE. If we somehow coordinate generation (both from new plants and eventual replacement of existing ones with renewable), coordinated with centralised and distributed storage and demand, we finally have that grid flat-lined movement of energy around the system that appears to be a goal of system efficiency.
    Does that then mean that issues of peak performance are removed ? By implication, it means that the capacity of the system (my meaning of capacity being the system’s ability to carry demanded current) is way above the grid’s need to service all customers ? Perhaps even above the grid’s need for a couple of decades henceforth.
    In that case maybe Giles is correct. The grid needs a write down, in effect written off by once speculative grid needs calculated from the prevailing paradigm. This problem goes in the same bucket as the other one – of incumbents slowly losing control of “their” system.

  • Peter Campbell

    The point of ‘generous’ feed-in tariffs was that they would get the ball rolling, encourage PV and give certainty to new investors. It was always expected that the tariffs for new systems would be stepped down as the cost of a new system became less. A person with an existing system paid a higher price for it and it is not fair to change the rules retrospectively and now give them a lower tariff than was originally agreed. If that happened to me I would be furious.

  • Albert Sjoberg

    I am only getting 6c a unit on my solar system in NSW, so cutting that to zero would not have a great effect on my finances. Having me pay a premium for the privilege of feeding back on to the grid would be absolutely ludicrous.

    I struggle to see how any government can justify measures to protect ‘Coal’ when we are on the brink of climate disaster.

    This is like the captain of the Titanic insisting all the passengers stay on the dining hall while the band plays because they have already received compensation for playing… No body can win.

    • RobS

      Have a look at what the spot market price is for power early on a summer afternoon when your solar array is producing at it’s peak, it is frequently 40c/kwh and there weere a few days last year when it reached $12/kwh. Every power plant receives the spot price for it’s power, so coal plants are being paid those rates during that time, whilst solar producers continue to receive their fixed FiT regardless. This concept is called the merit order effect, where solar is displacing the need to buy electricity at times of peak cost and at a time where even 40c/kwh is actually far less then the Utilities would have to pay for fossil fuel power.

  • Miles Harding

    There is an elephant in the room with us!

    In the words of Bob Dylan: “Times, they are a-changin”

    This has completely escaped the comprehension of most, and especially conservative, politicians. The WA state government is a prime example. They are determined to recapture the past by ignoring any emerging new world order.

    It would seem that the comments of Environmental Economists, such as Nate Hagens are being borne out:
    He observes that economic activity is strongly linked to energy availability. He also observes that energy availability is no longer increasing.
    He observes that other energy sources cannot easily replace most of the inputs provided by oil, so this commodity is essentially the hemoglobin of society. It certainly appears that oil supply is now a bumpy plateau and that no amount of effort will allow it to substantially increase. This implies that the end of growth is now upon us!

    For a world financial system that completely depends on exponential growth, this is a disaster in the making. I believe that we are observing the first effects of this where governments are having increasing difficulty reconciling fixed income with (exponential) demands.

    Both Barnett in WA and Abbott in Canberra have one thing in common: they focus on their short term budget woes while ignoring the big picture. The both fail to grasp the fact that CO2 emission is intimately linked to fossil fuel use and dependency.

    Rooftop PV is part of a more general decarbonising of the economy that must occur in order to minimise the effects of declining oil over the coming decades.

  • Chris Fraser

    Newsflash from Perth. Barnett has backed down. Clearly very little learned from the NSW experience. In the case of NSW, Energy Minister Hartcher held out almost four weeks. Barnett … 4 days.

    • RobS

      The right side of Politics is just starting to learn what it means once more than 20% of households have solar installed, although their still slow learners.