CLIMATE SPECTATOR: A handbrake on Aussie solar

While Germany's lead in the solar power stakes is reaping benefits around the world, vested interests are slowing progress in Australia.

Climate Spectator

Germany now has over 30 gigawatts of solar photovoltaic panels on its rooftops. The sheer scale of deployment means that over 4 per cent of the nation's electricity will come from rooftop solar power this year.

This industrial-scale solar rollout, created by Germany's innovative policy support structure, has enabled a significant global research and development environment to thrive, not to mention a massive upscaling and subsequent cost reduction in technology. Not only has Germany gained real emissions reductions from rooftop solar, meaning the country is seriously eating into its carbon liabilities, it has installed enough solar on roofs that doing the same in Australia would be the equivalent of retiring the output of four large coal-fired power plants – more than 15 per cent of Australia's total electricity generation.

Germany's contribution to the cost reduction of solar power is significant and should be applauded. Only China has made a similar contribution, through cheap finance targeted at large-scale solar production facilities, meaningful research and development programs and significant domestic policy changes that have introduced a nationwide feed-in tariff.

The biggest benefit from Germany's lead on solar installations isn't solely for Germans, who represent just 1.2 per cent of the global population. It also benefits the two-thirds of the world's population that do not have a reliable standard electricity supply.

People in the developing world are now blessed with light in the evenings to work by, electricity to charge their mobile phones, access to low-power, low-cost computers, and induction cook-tops, which are improving air quality. This 'foreign aid' program was no accident. The German EEG (Renewable Energy Act) is a comprehensive renewable energy policy that is known mostly for its flagship component: the feed-in tariff, along with its guaranteed off-take agreements for power producers, which breaks the monopolies of the big power companies and opens the market to competition from independent power producers. The EEG was always intended to be a policy not just for Germany, but also for the world; to alleviate poverty and distribute wealth more evenly by turning the traditionally centralised power industry on its head.

Bangladesh, one of the world's poorest nations, provides a good example of how the German solar rollout contains a significant 'foreign aid' component. A program set up as part of a micro-credit banking system, run by Grameen bank offshoot Grameen Shakti, is making great inroads into delivering electric lighting and telecommunications to Bangladesh's poor. As a result, over half a million Bangladeshi women have been able to provide lighting and telecommunications for their families.

Grameen Shakti provides loans over a number of years to have solar panels installed on the homes of Bangladeshi families. The loans are on offer to women who also have the opportunity to be trained in installation and maintenance. They receive modest-sized solar systems in the range of 50 watts to 250 watts, along with wiring and a small storage system. The smaller systems offer high-efficiency LED lighting, opening a whole new world of night-time lighting. The larger systems offer a complete leap into the 21st century, allowing families to charge mobile phones, use small low-power computers and operate small motors – giving access to modern telecommunications to some of the world's most disadvantaged people.

Without Germany's program, large populations in India, Bangladesh, South-East Asia and Africa would be without electricity. For these people, there is no alternative. From the poor of Africa to rich industrial nations, the sun is rising on the technology that will provide 50 per cent of the world's energy in the future. However, the benefits of solar aren't just flowing to the poor. Soon mining companies the world over will be relying on solar photovoltaic to reduce the cost of diesel imports to run generators at remote mine sites. Again, the availability and cost of the solution for mining and minerals processing companies is thanks primarily to the German feed-in tariff law and its offshoots around the world.

In Australia, however, we are now seeing pushback against progressive feed-in tariff legislation from vested interests, and those who support them in government and opposition parties. This despite the fact that rooftop solar has been one of the great alleviators of poverty in our time, bringing electricity to the door of the world's poor.

Established power companies such as AGL, who recently purchased the highest carbon dioxide emitting power plant in the country – producing the same emissions as all of Estonia – have had their faceless lobbyists out selling the idea to the likes of St Vincent de Paul and Uniting Care that the poor of western Sydney are subsidising the rich of Vaucluse when it comes to solar incentives.

This is blatantly contrary to reality. Generators are seeing reduced prices and significantly less demand for their wholesale electricity, which is making solar cost-neutral – or better – for consumers. AGL is also opposed to feed-in tariffs because they take away the supply monopoly they share with China Light and Power (CLP) and Origin, not to mention the fact that solar also reduces the market value of wholesale electricity from their conventional gas and coal power plants. The same of course is also true for the other major players, Origin and CLP, who are equally opposed to feed-in tariff legislation.

If we're going to see solar technology halve in price, so that over a billion people in developing countries can light up their lives – the way half a million families in Bangladesh have today – then we must maintain a significant deployment schedule in western countries, including Australia. Robust national feed-in tariff policies have been strong drivers of solar power in Germany and China, and the same is needed here, along with further research and development in private, public and government institutions.

Crucial to garnering public support for such policy is effectively communicating the price-lowering effect solar panels have on electricity bills. With the Australian public, industry at large and the developing world set to benefit – everyone, in fact, except the current Australian power industry – strong feed-in tariff policy should be an urgent national priority.

Matthew Wright is executive director of Beyond Zero Emissions.

Beyond Zero Emissions is a climate and energy security think-tank, and has a research partnership with the University of Melbourne Energy Research Institute and Sustainable Societies Institute.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles