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The great solar riddle: Saving money, the planet, or energy independence?

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So why do people want to install solar? Is it to save money? Is it to save the planet? Or is to have greater independence from the local utility?

It is a subject of intense debate in the electricity industry. Business models and executive careers depend on it. To briefly summarise the position of most Australian utilities, the likely motivation is to save money, and that can be fixed by well, fixing the tariffs. It is really a matter of price. And in any case, most people couldn’t be bothered stuffing around with the new technology.

vector solarIt is a curious view to take in a market where nearly one in four houses already has solar, and where 16,000 households are adding rooftop solar systems across the country each month.

And there are signs that the major retailers are losing the courage of their convictions, or simply waking up to fundamental trends. All three have recognised the potential for households to either leave the grid, or simply demand to have more control over their energy system.

And it’s probably just as well because, according to New Zealand energy network operator Vector, which runs the poles and wires –and  increasingly, the solar and storage – in that country’s biggest city of Auckland, the theory that price is the only motivation is  not correct.

Vector CEO Simon McKenzie, who pioneered the company’s groundbreaking solar and battery storage leasing scheme, says customers want solar and storage because they value the environment, and they value their independence. And they are tech-savvy enough to get on and do it, in much the same as they gotten their heads around the move from landlines to smart phones.

“Solar panels and associate technology are maturing to the point of mass market appeal. The balance of power is shifting from the utility service providers to he consumers,” McKenzie said in a presentation to analysts and media on Friday.

“New distributed generation (and storage) and technology allows them to switch from the grid (if they want to),” he said.

“So they are demanding choice and the highest level of service from utilities. They are targeting energy consumption as an area to save money; they are environmentally conscious and they are willing to adopt technology such as solar panels which allow them to generate own electricity.”

McKenzie says most people in the “traditional” energy markets thought hat the attraction of solar was primarily one about economics.

But he argues that customers are only looking at price as a third order issue. Mostly, he says, they are motivated  by the desire to take charge of their own energy requirements, and by environmental issues. “They want to embrace solar as a solution (to those issues),” he said.

And it need not be so bad for traditional utilities. Vector last year trialled its “Sun Genie” program, offering to install rooftop solar and storage for consumers under a leasing arrangement.

Vector says it cuts down on network costs, and help engage the consumer. Happily, people who go solar and storage tend to consume more, McKenzie says.

“You have got to ensure that the environment is such that solar can be integrated into the network and that customers have the ability to manage those solutions,” he said.

“There is no doubt that a lot of people are looking to embrace solar.”

McKenzie says Vector is currently reviewing where it goes next with its Sun Genie product which recently completed trials that identified the benefits of battery storage and how to integrate them into networks.

McKenzie sees strong opportunities in Australia, particularly in NSW and Queensland where the electricity networks will be either partially privatised or will seek co-investment.

Vector is looking to roll out both its smart meter and its data management products in Australia, and is talking to utilities in Australia to set up new partnerships.

McKenzie lamented the fact that the regulatory regime is not keeping pace with new technology developments. The regulators, he says, set their pricing points on the assumption that assets will have a life of 40-45 years, as they have done for the past century. But there is no allowance for the fact that techno logy is now changing rapidly and hat these assets could be stranded or made redundant.

That criticism was directed at regulators in NZ, but it could equally apply in Australia, where regulators are struggling to keep up with the fundamental move towards distributed generation.

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  • Ronald Bruce Jones

    Iv’e been a climate change skeptic, but not a skeptic when it comes to global pollution from coal, so by going solar you do your bit to reduce global pollution. Another reason for going solar is I know longer work and have a limited income so I have tried to reduce my overheads and one way was to install 3 kw’s of solar panels. Living in a rural area also means constant break downs in the power supply and although I haven’t installed batteries, when the cost comes down there is every chance that this what I will do!. The other problem with grid supplied power is the constant rise by your local energy supplier constantly putting the cost up via a service fee so they can get more $ when your using less of thier energy

    • Peter Campbell

      “I’ve been a climate change skeptic…” I hope your use of the past tense means you are now better informed about the science.

      • Ronald Bruce Jones

        Less so of a skeptic than in the past but thier other factors in the equation that man has no control over. The sun over our heads doesn’t put out a constant amount of energy like a light bulb. There is no reason for man to constantly crap in his own nest though, we all need to take some responsibility for our own actions and make the effort to improve this planet, maybe not just for us but for the generations to come.

        • Peter Campbell

          May you become less sceptical still as you read further :-)
          I am confident that scientists who are expert in the relevant fields are well aware of such other factors as variation in the sun’s output and take that into account.
          You make a good point on nest crapping. Even if some scientist were to get a Nobel prize for showing how everything we think we know about climate change is wrong – it would be that astonishing and prize-worthy – it is still a bad idea to acidify the oceans (among other problems from fossil fuel burning).

          • Ronald Bruce Jones

            Skepticism doesn’t mean your right or wrong it just means your questioning the outcome which to my mind
            is healthy, it means you want to know more before you settle on any outcome. People once thought the earth was flat and I guess they got that wrong although I haven’t been able to leave earth to see for my self I just take it for granted that someone got it right, and yes man is making a mess of things when you look at what is happening on the Great Barrier Reef

          • Alistair Spong

            Ah yes , and there in lies the great contest between what I can know and experience as a single human being versus the rigour and persistence and determination of science . It’s fine to be skeptical , but it’s ignorance and not skepticism when those questions we ask have already been thoroughly investigated and answered beyond anything we could possibly determine as a singular human being !
            Of course this contest is exploited by those who call themselves skeptics , but have their own selfish agendas at hand .

          • Ronald Bruce Jones

            Galileo proposed that the earth was just a planet revolving around the sun which was against church doctine for which he spent the last eight years of his life under house arrest. One man right church wrong. As much as we think we know knowledge at this point in our time is un-ending.

          • Peter Campbell
          • Ronald Bruce Jones

            Well Peter Cambell I just guess that picking Galileo was just unfortunate on my part as I am unfamiliar with the Galileo Gambit, there a lot of other comparison you could possibly draw on, and yes I am just a lay person, but I dont generally believe every thing I’m told whether by one person or a goup, I would rather be the skeptic or otherwise I would believe smoking is safe along with coal fire power stations and nuclear power stations, because a group of people with a self vested interest want you to believe them.

          • Peter Campbell

            As a lay person you are prepared to accept the advice of reputable science on tobacco smoking (so do I). Why not on climate change? As it happens I am an active scientist engaged in research (not climate change) so I am familiar with how it is done, published, debated, challenged etc. The conventional view on climate change has all the hallmarks of respectable, well-supported theory.

          • Ronald Bruce Jones

            First up I said I was a skeptic and nothing has changed and I haven’t said I don’t believe scientists or the science and with time I’m sure the science will prove it self one way or another.

          • Peter Campbell

            “…with time I’m sure the science will prove it self one way or another.” I believe the broad thrust of climate change theory is beyond any reasonable doubt. The only debate is about details. It is like with evolution, closer to my expertise. Some (usually religious) claim open minded scepticism on this area too but this topic also is beyond any reasonable doubt, similarly supported by many diverse lines of evidence all pointing the same way. As with climate change interesting research questions remain in the fine details but these do not in any way throw the whole into any reasonable doubt.

          • Miles Harding

            Waiting for proof is the usual BAU argument against engagement.
            This is fine for benchtop petri dish experiments, but with the earth’s climate, we are the bacteria in that petri dish and can’t ever leave the experiment. We only get one chance and our behavior will possibly determine the outcome.

            I say ‘possibly’ to emphasise the possibility that we (scientific consensus) may be wrong, but what if we are correct or the effect is worse than expected?

            This is the fundamental flaw in a ‘skeptic’ argument; it presumes that there is no effect or that the alternate case is benign. We have no proof of this and every indication that it is certainly not the case.

            Like ignoring the ‘Bridge is out’ sign because road signs have been wrong previously is not a good survival strategy.

          • Ronald Bruce Jones

            The Skepticism isn’t about global warming but about the fact that man is the only cause

          • Alistair Spong

            Galileo wasn’t one man – from Aristarchus 400bc to Copernicus 1500… A grand tradition of science a, of reason and rationality , that had all concluded that the earth wasn’t in the centre of the uuniverse ….. Galleo was the messenger … But Kepler solved the mystery and put it beyond doubt by hypothesising that planets travelled on ellipses not perfect circles around the sun ……… This was the work of many many men and Women if you believe Holywoods Agora .. Sciences greatest moment and a perfect example of how our perception – ie that the sun rises above the horizon , when in fact it’s the earth spinning … Is know match for the rigour of science …. I deeply skeptical about the value of skepticism if it discounts what is known by ignoring the evidence , This is the real truth of Galileo, the holes in the plutonic view were shielded from though investigation in a similar way that climate skeptics views are shielded from thourough investigation – it’s easier to believe in the status quo

          • Ronald Bruce Jones

            Alistair
            A scientist comes up with a theory, he then tests his theory and finds it to be correct, he then changes the parameters then re-tests his theory to try make his theory water tight, if he doesn’t someone else will. So in one sense he becomes skeptical of the first result he re-test his theory to give it validity Thats what a skeptic does, its not valid without proper proof.

          • Peter Campbell

            Well actually doing science is not quite that simple. The theory on climate change is not some singular thing that one person came up with and can go and test in the lab. Many diverse lines of evidence from different fields of expertise all point consistently the same way. Each is observed to reinforce and corroborate the others. The occasionally anomaly that at first does not appear to fit has been looked at again in more detail and became explicable and found to be consistent, not the anomaly it first seemed to be. And so it goes. Thousands of different scientists, expert in diverse fields from ecology to atmospheric physics, remote sensing, oceanography etc all find that what they observe makes sense in the light of climate change and not otherwise.
            The analogy with evolution is apt. “Nothing in biology makes any sense, except in the light of evolution.” Everything points the same way, from the molecular biology and biochemistry through physiology up to large scale ecology with a detour through palaeontology. The theory of evolution is so thoroughly established as to be accepted as fact. The wilful disregard of just how justifiably confident the science is by those who are uncomfortable with inevitable conclusions is closely analogous between the topics of evolution and climate change.

  • Chris Fraser

    The clear message is When considering further grid investment, the CSIRO and users of recent technological innovations should be given a seat at AEMC’s table. Given recent sentiments submitted to the RET Review I would much prefer them than the ESAA or a coal-burning retailer.

  • Nonrev

    Economics is a tool of big business and government, and acts as a restraint on the freedom of people to enjoy what an economy produces.

    A foundation principle of Economics is that of scarcity, and the dogma is such that the size of the economic pie is always limited by the size of the resource to make the pie.

    The power of the Sun (and wind) is an unbounded energy resource, unlike fossil fuels.

    The economic renewable energy supply turns the theory of economics on its head. It is only restrained by the technology to capture it. Renewable energy is inexhaustible.

    People who have installed solar panels intuitively know this, that once they have the means to capture ever renewing sun and wind energy, they enjoy a greater slice of the economic energy pie as they move beyond the restraints imposed by the continuing use of fossil fuels, both in a financial sense, and an environmental sense.

    • Catprog

      Nope their is a bound. Just a lot higher then we are currently using.

  • Rob G

    Price will be the killing factor for these big dirty utilities – already they are unable to compete on price and it’s just going to get worse for them. We are now at the point where switching to solar is a ‘no-brainer’. That said, I agree with the story, that environmental and independence are the bigger motivators in this market.
    Paradoxically, as I see it, Tony’s Carbon Tax scare campaign was a great motivator for wanting to be solar owners – people simple said they’d had enough of increasing price volatility, so better make your own power. (I just love the way renewable opponents ‘accidentally’ accelerate their own demise.)
    Personally, if one of the Dirty 3 offered me a 20% discount, I’d tell them to get lost! I’d like to answer my children’s question: “Dad, what did you do to stop climate change?” To which I can answer that I made our home 100% renewable and (soon) drove an zero emissions EV….and further on took a more aggressive action in a political/industry future!?

    • Peter Campbell

      Get the EV. You won’t regret it!
      Check out the ex-lease and ex-demo iMiEVs on carsales.com.au for a practical city runabout. My wife drives one and i still use the Daihatsu charade I converted over 5 years ago with, unintentionally, 50% more torque than the turbo version had.

  • Ian

    16000 installs a month would translate to about 500MW a year. That is a lot of toilet paper required by the utilities to manage their anxiety!