Abbott points to solar plus storage, but does he really get it?

The fact that Tony Abbott’s renewable energy and climate policy is – as Australian Solar Council CEO John Grimes put it this morning – “as shallow as a puddle”, is no longer in doubt after the release of his government’s hugely underwhelming 2030 emissions reduction target.

But somewhere in the muddy puddle of a policy that accompanied the target’s release on Tuesday, was a glimmer of hope: the statement that the Abbott government would be “developing a strategy to improve the utilisation of solar power.”

It’s vague, and it’s brief, but coupled with another statement saying they would be funding “new and innovative renewable energy, energy storage and energy efficiency technologies,” it sounds almost as if Abbot & Co are starting to get just how important rooftop solar plus storage will be in any national emissions reduction plan, and in any future energy mix.

Still, there is room to be doubtful. The Abbott master plan, if that is what it is, says the Coalition is “already providing around $1 billion to new and innovative renewable energy, energy storage and energy efficiency technologies.” But that is only through the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, two institutions it vows to abolish when it has enough votes in the Senate.

In terms of cutting emissions, cleaning up the energy sector, lowering – and democratising – the price of electricity to consumers and replacing outgoing dirty generation capacity, rooftop solar with storage is the other low-hanging fruit.

And if governments don’t see this – and for that matter, energy companies – voters are bound to get the message through. As Giles Parkinson wrote on RE sister site One Step Off The Grid on Wednesday – and as many consumers have worked out for themselves – rooftop solar is now delivering electricity to households in Australia at a cost of 10c-13c/kWh.

“That is little more than one third of the cost of grid-based power, and for those on time of use metering in the afternoon and evenings, it is around one-fifth of the cost.”

Battery storage is also falling down the cost curve, with Bloomberg New Energy Finance and other analysts noting that adding battery systems to home solar arrays is already cheaper than grid-based power. Within a few years, it will deliver the sort of returns that will make it a mass market.

Within a few decades, it is estimated that half of all electricity demand will be provided by the households and businesses and local communities that use them. That will mostly be solar in the form of rooftop arrays or community-scaled projects with the addition of battery storage.

This is what BNEF’s head of Australian research, Kobad Bhavnagri, calls an “unstoppable” force. So it will happen, regardless of policy signals or cooperation from energy incumbents. But it would all happen a lot more smoothly, and rapidly, if the government were on board.

Labor seems to get it, or so their proposed renewable energy target would suggest. Certainly, they’re sending all the right signals. On Wednesday, Opposition leader Bill Shorten and his climate minister Mark Butler visited the ANU, which has spawned some of the world’s foremost solar researchers, including one of the so-called “father of photovoltaics”,  Andrew Blakers. On Thursday, they visited FRV’s Royalla 20MW solar farm south of Canberra – Australia’s second-largest example. On Friday, there were at UNSW.

Interestingly, the duo were not asked a single question about their vision for renewables, or solar, at the solar farms, but in response to a question at the ANU visit, Butler said solar and energy storage would play an “enormous” role in Labor’s 50 per cent renewables target.

“On any analysis, battery storage is revolutionising the ability of households to take control of their own energy generation and their own power bills,” Butler said.

“Bloomberg New Energy Finance said only a couple of weeks ago that within five years a 4 kW PV system on the top of your house, with a 5 kW hour battery will give you cheaper electricity than you can get off the grid,” Butler added. “That will just revolutionise electricity in this country … with those kinds of technology revolutions there’s enormous investment and job opportunities.” And Shorten said much the same in a speech on Friday

The potential for energy efficiency and solar to play a key role in abatement are highlighted both here, in Alan Pear’s analysis, and in the recent table (below) by ClimateWorks, which says that because of this ambitious emission reduction policies can be achieved at little or no cost, something that the government’s own analysis has supported, according to The Guardian.

But the government is not on board, yet, and energy networks are doing their best to slow things down. They are jacking up the fixed component of electricity tariffs, providing less incentive for solar and energy efficiency, and even proposing extra charges for solar households.

Alan Pears, from RMIT, says: “In particular, if regulators allow high fixed charges to be applied, the economics of energy efficiency, batteries and smart management as well as rooftop solar will be undermined.”

This is already happening. As solar market analysts SunWiz note in an industry snapshot published on Thursday, 2015 has been “a shocker” for solar in Queensland – Australia’s sunshine state – and pretty poor across most of the country, which has struggled to reach 2014 installation volumes, thanks to pared back feed-in tariffs and disappearing policy signals, making it harder for home owners to reconcile an investment in solar panels that should be a no-brainer.

“The fundamental mistake Tony Abbot has made,” said the ASC’s Grimes, in an interview with RE on Friday, “is in aligning with the vested interests of the electricity players and against the interests of the voting public.

“The energy industry is an insiders game, played by insiders for insiders. it is enormously complex. Energy companies think they are at the centre of the market. They are not at the centre of the market, consumers are. And consumers are taking matters into their own hands.”

Pears agrees: “The challenge for the government on energy efficiency will be that the kinds of policies most likely to deliver cost-effective emission reductions are fairly interventionist, and are anathema to many coalition politicians and their supporters.” (See his opinion piece here)

Grimes, whose Solar Council has been running a nation-wide “Save Solar” campaign, targeting Australia’s marginal electorates, says there is a strong depth of feeling in the voting public that they are being taken for granted and have no control and no voice.

But, he adds, a battle against rooftop solar is a battle Abbott can’t win.

“We actually do need a community grid which is responsive, dynamic and smart… By polarising the debate, Abbott is stopping the evolution of the network and how do we do it such a way that we align incentives and make the interests of consumers the market driver.

“It’s dangerous, it’s short-term and will cost him hugely, politically,” Grimes said.

As for the consistent message from the Coalition, that a renewables-heavey electricity market will drive up costs for consumers, “this is Tony Abbott’s great lie,” says Grimes.

“It’s been disproven time and time again, including by the ACIL Allen modeling in the (government’s own) Warburton review.

“It just demonstrates that (Abbott) has no intellectual depth of vision on this issue. He is as shallow as a puddle on energy.”