Does Abbott's solar roofs plan mean anything?

The Coalition went to the last federal election with a plan for one million additional solar rooftops by 2020. The party is sticking by the commitment, but just what does ‘one million solar roofs’ mean?

The Coalition took a plan for 'one million additional solar rooftops by 2020' to the last federal election. Leading party figures say they are sticking by the plan, but will it be achieved if they win office and just what does ‘one million roofs’ mean?

The Coalition plan

The Coalition went to the August 2010 election with a “Direct Action Plan”, with a section called ‘One Million Roofs Solar Program’ (page 24).

It states that “...a Coalition government will provide additional ongoing support for the use of solar energy by Australian families and households.

Our goal is for one million additional solar energy roofs on homes by 2020, including either solar power or solar water heating systems. To achieve the goal of one million additional solar energy roofs by 2020, the Coalition will provide an extra $1000 rebate for either solar panels or solar hot water systems.

The program would be capped at 100,000 rebates per year and would therefore be capped at a total cost of $100 million per year. The rebate will be on top of existing incentives and will replace the current solar hot water incentive when it ends. It is intended that the rebate will remain in place until 2020.”

At the start of the month Opposition Leader Tony Abbott again supported the 2010 policy for solar rooftops.

"Obviously there is a time that has elapsed since the direct action policy was first announced," he told reporters in Perth last Monday.

"But yes, we think it would be a very good thing if we could get one million solar roofs by 2020.”

Issues

Elapsed Time

Two years have passed since the last election. When the policy was written in 2010, there were 10 years until 2020. If a federal election was held in August 2013, there would be seven years until 2020. The newspaper article (AAP) mentions this point, stating:

“With seven years between 2013 and 2020, the Coalition would have to find $143 million a year to meet its goal, assuming the rebate level isn't raised.”

This is not a major problem, but it does require some clarification. 

Would the Coalition policy be $1000/home x 100,000 homes/year = $100 million/year cost, generating 700,000 solar roofs? Or $1000/home x 143,000 homes/year = $143 million/year cost, generating one million solar roofs?

Current rate of PV installation

After 2009, the rate of PV installation on roofs increased dramatically. There are currently more than 750,000 rooftop solar installations in Australia (to June 2012), most of which have gone in during the last few years.

Figures from the federal government’s Clean Energy Regulator put things in perspective: From 2001-2009 there were 85,091 PV installations, during 2010 there were 198,214 PV installations, in 2011 there were 357,222 PV installations and through June 2012 there have been 113,317 PV installations.

Since the start of 2010, an average of 250,000 home rooftops per year have had solar PV panels installed. If the current installation rate continues, Australia will have one million solar PV rooftops by the next federal election (say August 2013) – given that there are 750,000 now and they are installed at 250,000 per year.

If there were no changes to existing government policies, and the recent installation rate of 250,000 homes/year continued, then an additional one million homes would be completed every four years. In other words, Australia would have two million PV solar homes by 2017 – well before 2020.

Solar hot water heaters

The Coalitions’ Direct Action Plan quotes Australian Bureau of Statistics figures, stating that there were 587,800 homes with solar hot water heaters in March 2008.                             

The federal government’s Clean Energy Regulator figures are slightly different. From 2001-2009, a total of 389,266 solar hot water heaters and 103,237 heat pumps were installed. During 2010, there were 99,324 solar hot water heaters and 27,769 heat pumps put in.

In 2011, these figures were 83,846 solar hot water heaters and 19,222 heat pumps. Finally, through June 2012, 17,875 solar hot water heaters and 3,303 heat pumps were installed. This sees a total of 590,311 solar hot water heaters and 153,531 heat pumps, or 743,842 combined.

Surpassing one million 'solar roofs'

It isn’t correct to just add the figures together, so 753,844 solar PV installations plus 590,311 solar hot water heaters doesn’t really equal 1,344,155 solar roofs. For example, I have both PV panels and a solar hot water heater on my roof.

With this many installations however, there would have to be well over one million solar roofs by now.                                                                                                                       

[The Coalitions’ Direct Action Plan states - Based on these estimates, Australia will have approximately 1.3 million households either using or installing some form of solar energy in their homes by the end of 2012. ]     

Wiggle room

It may be that the Coalition’s policy is to spend $100 million/year on solar rooftops.

The important issue then is: ‘Is it an additional $100 million/year (with the current RET scheme)?’

Assuming there are about 250,000 installs per year, there could be issues working out which 100,000 homes get the extra $1000 and which 150,000 homes don’t get any extra.

If no additional funds were available (ie there wasn’t $250 million/year at current install rates) then presumably the grants could be means tested to cut down eligibility to match available funds; so that those least able to afford the panels received the most benefit.

Meanwhile, subsidies have changed for solar hot water heaters and heat pumps. But even in this current year there are more than 40,000 being installed. This means that there is still likely around 300,000 solar roof installs per year.

As all the above data shows, there is plenty of wiggle room on a 'one million solar roofs' policy. With this in mind, all parties need to update their numbers and say exactly what they mean to do on rooftop solar energy prior to the next election.

It’s a little bit sloppy for a politician to be quoting “one million solar roofs by 2020” as their policy direction. Ideally, we would get more detail on quantities, funding amounts, eligibility descriptions and scheme mechanisms.

Conditions

-- I have assumed that the Coalition policy was not “one million roofs”, but rather support for solar energy.

If it was “1 million roofs” only, then all support for renewable energy could be cut after the 2013 election; because the goal would likely have been reached prior to the election. If it was 1 million extra roofs, then it may well be reached by 2017.

I am also assuming the Coalition would be happy to see more PV on roofs – ie the Coalition would not be trying to stop people putting PV on their roofs, so that the one million target was not overshot.

-- I have assumed that the proposed $100 million/year was a “core promise” (A ‘non-core’ promise means nothing).

I am somewhat cynical by nature. I know it’s only a press conference/doorstop, rather than a formal policy announcement in writing; but to me “we think it would be a good thing” doesn’t quite sound as though it’s “written in blood”.

-- I have assumed that all existing government policies remain.

As an example, my parents (in NSW) had a 1.4 kW PV system installed on their roof a fortnight ago. It cost $3,800 in total; STCs were worth $1,300; meaning the cost to them was $2,500. Changing the Renewable Energy Target, or the STCs, could greatly affect the rate of PV installation.

-- Photovoltaic module prices have been falling and retail electricity prices have been rising in recent years. I am assuming that these larger economic conditions remain much the same/ do not vary radically. And that approximately 250,000 installs per year occur.

Matt Parmeter stood for the Greens at the 2007 and 2010 federal elections. He supports medium-scale solar in western NSW. To be balanced, he also queries current Labor policies.

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