"The plunging cost of solar has taken industry by surprise, and politicians are yet to come to grips."Much is made in the industry about "cheap coal", but it means little to end-use customers in a country where the cost of delivery is so high. Australians pay more than any other country for network costs and retailers take a hefty margin (in New South Wales and Queensland, for instance, households are slugged between $100 and $150 a year just so the electricity retailers have a big enough kitty to offer discounts to other customers). Households, on the other hand, are discovering rooftop solar can generate and deliver electricity for around half the price of grid electricity. The move to time-of-use pricing, higher connection prices and other tariff changes in the pipeline is simply providing an additional economic incentive to install more solar, and to consider the addition battery storage. "Can I get off the grid" is becoming a much more common question of solar installers. The options for the incumbent utilities are limited. Network operators could adapt to new technologies -- a recent CSIRO report suggested that if they didn’t, one-third of households in Australia could leave the grid by 2050. The generators simply face a loss of revenue and their assets being squeezed out of the market. They could, as utilities in Europe are starting to do, embrace more renewable energy but, like Kodak with digital technology, the upper echelons of executive power appear frozen in time. So their principal strategy for the moment is simply to try and stop rooftop solar in its tracks. Which is why they are pushing so hard against the RET. The state-owned generators have, of course, the ear of state governments who not only own the assets, but regulate and set prices for electricity. Enormous pressure is coming from these and privately-owned utilities such as Origin Energy and Energy Australia to have the RET removed entirely, or severely diluted. The Solar Council fears that the remaining incentives for rooftop solar -- which consists of a renewable energy certificate for every megawatt hour of electricity the systems are deemed to produce -- could be removed entirely. This, it says, would push out the return on investment in rooftop solar beyond the interest of most households, slow down adoption, and put many of the industry’s 15,000 solar jobs at risk. "We know another 3.5 million Australians are planning to put solar on their homes over the next five years, but those families will have a big rethink if the Renewable Energy Target is scrapped or weakened," Solar Council CEO John Grimes said. "The best thing you can do to reduce your power bill is to go solar, so you would think the Government would be encouraging investment in renewable energy." This is where the politics get interesting. The plunging cost of solar has taken industry by surprise, and politicians are yet to come to grips. The first government that will have to do this will be Western Australia, which is struggling with credit downgrades but which must fork out $500 million each year to subsidise the cost of grid-based electricity. If those subsidies were removed, the case for solar and distributed generation would become even more of a "no-brainer" than it is now. The ideological hard-heads in the Coalition, and those that seek to advise them, refuse to accept the new technology and describe the CSIRO’s scenarios as “science fiction”. Australian households, however, have a different perspective *This article was originally published at RenewEconomy
David and Goliath battle over solar: why they want you on the grid
Australian households are flocking to solar, screwing up the business models of the nation's state-owned electricity generators. Politicians have yet to come to grips with the situation.