How right-wing crusaders got it so wrong on solar

In 2012 after a huge solar investment cycle focused mainly on China with backing from various levels of government mostly in the form of cheap finance, a spate of bankruptcies rocked the solar world.

This was a good thing, as it represented the cyclic nature of the development of a modern high tech industry.  Bankruptcies have been the hallmark of other fast paced, high growth and disruptive industries such as telecommunications and information technology. They've also been important in the healthy growth cycle of the behemoth automotive and aviation industries.

However you wouldn't read about this as a success in the columns of some of the nation's biggest dailies. When the news of a few bankruptcies and sell-offs filtered through the newswires, Herald-Sun self-professed right-wing blogger Andrew Bolt was quick to jump on the ‘death of solar' bandwagon, claiming “China's solar industry falls.”

Yet a few years on it appears the Chinese solar industry hasn't fallen; instead it's gone from strength to strength, as the massive investment cycle that began in 2008 now bears fruit. Of course there was a short-lived oversupply situation which took a knife to prices which resulted in small inefficient suppliers going out of business. These operators were dead weight anyway with their little 20-200MW production facilities. They were only going to (briefly) stand in the way of the big boys who had invested in the latest Swiss, German and Austrian machinery to create the most efficient, lowest cost panels on massive production lines. 

Source: GTM Research /EPI

A case in point is Trina, which emerged as a giant from that investment cycle. It is now one of the solar industry's biggest players and is suffering from under-capacity rather than over-capacity, unable to keep up with demand for its panels. Trina added 1GW of panels in 2014 to bring production up to a whopping 3.8GW and will expand again in 2015 to 4.8GW.

If Australians purchased the entire output of Trina's factories (just one solar panel manufacturer) to put those panels on roofs in Australia, then we'd add 7TWh of annual solar generation. This  is about 1TWh more than the giant 2000MW Liddell power station in the Hunter Valley (net output in 2013). Trina's panel output from just one year of production, if installed in Australia, would displace about 4 per cent of the National Electricity Market's demand.

In another article Bolt writes “Christine Milne particularly praises Germany's feed-in tariffs, which pay people with solar panels for the dribble of electricity they produce.”

That “dribble of electricity” produced by solar panels in Germany, as Bolt puts it, is going to be 33TWh in 2014 from 38GW of solar panels. If those panels were installed in Australia they'd produce about 50TWh of electricity, or the equivalent of 27% of Australia's expected electricity demand in 2014. And if we installed that capacity in Australia today we'd do it for about a quarter of the cost Germany paid. But the Germans weren't stupid, that was exactly their aim – to drive the cost of solar down through learning by doing and economies of scale.

Finally Bolt gives us this beauty: “Another green flop – but what do you expect, when governments keep throwing money at one of the most expensive forms of power around?”

Actually the latest analysis from those whose day job is financial analysis rather than journalism, including Citigroup and UBS, tells us that solar is cheaper in Australia than grid supplied electricity. In fact, UBS now says that in some parts of the country batteries in combination with solar is also now cheaper than grid electricity.

Modeling by Zero Emissions Australia and energy consultancy TrueDemand shows that, over a 25-year life, a solar panel installed on Australian homes or businesses will achieve a Levelised Cost of Electricity (LCOE) for homeowners of just 6 cents per kWh (based on a homeloan equivalent discount rate of 5%). That's 500-800% cheaper than what Australians are paying for grid electricity today.

While a wide range of conservatives were so busy bagging government support for solar energy as an expensive waste of time, the cost of solar plummeted as a direct result of those government programs providing an incentive for research and production process innovation. 

One wonders when these critics will cross-check their forecasts against reality and share the good news with their readers?

But then again, given many of their readers have already bought and installed a solar system in the last few years, they probably already know how wrong these journalists were anyway.

Matthew Wright is executive director of Zero Emissions Australia, technical director at Efficiency Matrix and resident columnist at Climate Spectator.