Tuesday 24/6/2008 Page: 1
AS solar energy company Solar Systems prepares to select a site for the world's largest solar power station in north-western Victoria, the cost of domestic solar power has dropped dramatically in Sunraysia in the past year. Photovoltaic arrays and solar hot water services are now within the budget of an average household - even without the $8000 Federal Government rebate and the Victorian Government's maximum $3000 rebate on solar hot water services.Renewable energy expert Paul Geering, a founder of Sunraysia's first solar-energy buyers' group, says local householders can install a 1-kilowatt solar-electric array for only $895 - less than a tenth of the cost in September last year. And they can slash the biggest item on their power bills by retrofitting a new solar heating unit to their existing electrical hot water services for only $1725.
The price drop opens the way for a wholesale switch to solar energy in Sunraysia that, with the construction of Solar Systems' $425 million solar power station, could go a long way to making the district independent of high-cost, high emissions electrical power from the Latrobe Valley's brown-coal power stations which are some of the most polluting in the world.
David Holland, managing director of Melbourne-based Solar Systems, says his company is still negotiating for cheap, suitable land on which to build its $425 million, government-subsidised solar power station. But the company remained on track to begin construction next year and now has 40 staff working at its prototype facility in Bridgewater, near Bendigo, optimising the technology before the project begins. Mr Holland said it was increasingly likely the company would now develop the power station at just one or, at most, two sites in northwest Victoria. Earlier this year it was considering the possibility of splitting the installation between two or even three sites.
"Whether we build it near Mildura, Swan Hill or Kerang, there will be enough demand to take all we can produce," he said. "We're still exploring the technical aspects of connecting it to the state power grid, and how the cost of the land will factor into the cost of the electricity." Although the company has not indicated a preference, a site close to Mildura would he at least a degree of latitude farther north than Swan Hill or Kerang, yielding a significant edge in power production because of the angle of the sun.
There is also an incentive for Solar Systems to maximise its savings of greenhouse gas emissions by choosing a Sunraysia location. Being furthest in the state from the brown coal-fired power stations in the Latrobe Valley, Sunraysia residents and businesses pay higher power costs than anywhere else in the state because of an approximate 15 per cent loss of energy in the form of heat radiated from high-voltage power lines along the 800km route.
But the reduced cost of private solar power means many Sunraysia households could make themselves largely independent of the state power grid, even before the solar power station comes on line. Mr Geering, who lectures in plumbing at the Sunraysia Institute of TAFE, said that with the price of electricity set to rise steeply over the next few years there had been a flood of applications to join the buyers' group. People were attracted by the low cost of the photovoltaic arrays and solar hot water systems, and the potentially large savings in power bills and reduced greenhouse emissions.
He said 80 per cent of local households that still use electrical hot water services were reluctant to change over to solar hot water because of the cost. Even with the maximum Victorian Government rebate, the residual cost and the high installation charges can still end up costing the householder more than $3000. Very high installation costs had also been a major deterrent to people installing photovoltaic arrays, even with the maximum $8000 federal rebate.
Mr Geering is no fan of the rebate schemes run by the Federal Government for photovoltaic arrays and the Victorian Government for solar hot water services because they operate in a way that allows some installers to rip off customers. He said he hoped the Federal Government would reconsider its decision to restrict eligibility for the $8000 rebate for installing photovoltaic arrays to households earning less than $100,000. He believes many plumbers had exploited the schemes by ramping up the retail prices of solar power units and charging exorbitant installation costs that, in some cases, completely negated the value of the rebate.
"Someone in our buyers group paid $11,500 for a 1-kilowatt installation, and when he kicked up a fuss about the cost, they dropped it by $5000," Mr Geering said. The customer had bought from a company in Melbourne and because there were few local businesses with expertise in installing photovoltaic arrays a metropolitan installer was contracted at a cost of $1000 a day for the three days it took to drive to Mildura, install the array and drive back to Melbourne.
Yet even after deducting the installer's bill of $3000, the company had still been able to reduce the buyer's $11,500 bill by $5000 and still make a profit, an indication of the profiteering involved. Mr Geering said the local buyers' group had a bulk buying arrangement with an Adelaide photovoltaics company that had decided it could do much better selling hundreds of units at a modest profit than only a few units at very high prices. "We set up the buyers group to give local buyers greater equity in a system that was weighted strongly towards the retailer," he said.
"The first photovoltaic system we installed cost $4300 if we bought 12 or more. We now have a deal with another company that has dropped the price of a 1-kilowatt array to only $895 for 50 or more orders." Mr Geering said the second company had decided against registering with the Federal Government to participate in the rebate scheme,"The second company has forced its rivals to drop their prices and they're not happy about it - because of the rebate, these guys have had it very good for for a long time.
"Instead of putting up the price to make big dollars from the increasing demand, companies should be installing twice as many units for the same price." He said the retro-fitted solar hot water system being offered through the buyers' group was not only cheaper, but more efficient than the latest purpose-built hot water systems.
It was designed for Mongolian herdsmen who needed a portable system that could be rapidly installed on their traditional, demountable dwellings, called yurts. "This unit begins heating water at an ambient temperature of minus-2 celsius, so it's far more efficient than the ones being sold under the rebate scheme," he said. Mr Geering said the rebate system was being abused. It should be the manufacturer that received the rebate, to reduce the chances of the customer being ripped off.
"If I go to a local store and buy a 315-litre solar hot water system, the store should notify the manufacturer of the sale and the manufacturer would then apply to the government for the rebate." Mr Geering said Sunraysia residents could register to join the buyers' group at mildurabuyersgroup@yahoo.com.au
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