Graph of the Day: Labor wakes up to low-cost solar

The federal Labor government has suddenly woken up to achievements in rooftop solar, with Climate Change Minister Greg Combet issuing a press release on Monday celebrating the one millionth rooftop solar system to be installed since Labor won office in 2007 – and celebrating the declining costs, energy bill savings, and emission reductions.

Readers may remember that Australia passed the one millionth mark last month, a milestone that was further analysed by Ric Brazzale last week. Combet says that as only 7,472 systems had been installed under the Howard government till 2007, then the number of  rooftop solar PV systems installed under Labor is now 1,002,677.

The average size of the system has been just under 2.5kW, although the average recently has been 3kW. (In fact, recent experience in Queensland suggests it is a whopping 4.5kW).

Interestingly, Combet also feted the energy savings per customer – presuming they were on a 3kW system in the mainland capitals and producing around 4,100kWh of electricity a year. Based on the national electricity tariff of 25c/kWh, and an export tariff of 8c/kWh, this would save each household around $560 a year.

(Of course, this would apply to new or recent customers. Many solar households enjoy favourable state-based tariffs that have since been wound back as costs fall. Some may suggest that the calculation of Combet’s office on self consumption is also conservative. Many put this at 50 per cent for larger systems, and two thirds for smaller systems).

The other interesting aspect of Combet’s release was the promotion of the declining costs of solar. It seems that the government has finally seized on the fact that rooftop solar – as UBS described it – is becoming a bit of a “no-brainer” for households.

Based on the current support under the Renewable Energy Target, this is how much assistance each household would get (the differences relate to the amount of solar resources in each city)

And this is the estimate of our of pocket expenses. We predicted early last year that solar would be a “good news” story from the Clean Energy Future to be told by the government, particularly with the introduction of financing deals that provide low or zero cost upfront payments.

It seems the government is finally coming to understand this, and could use this as a point of differentiation from the Coalition, which has an ambiguous stance on the RET, but does promise another one million homes out to 2020. Chances are there could be four times that much anyway, which the state-based utilities might not like.