Tuesday, 21 August 2012

Solar electricity generation makes a lot of cents

12 Aug 2012

The outlook for makers of photovoltaic cells is much sunnier in Australia than New Zealand. feed-in tariffs in Australia, which see homeowners paid good prices for what energy their solar panels produce above what they use, has driven a 431% increase in the installations of solar panels there since 2010. In New Zealand, there are about 20,000 solar installations-just over 1% of the country's 1.6 million houses. Europe accounts for about 71% of the world's installed solar capacity.

Roy and Jenny Gardner installed 10 solar panels on their southern English home about a year ago and expect to see the scheme pay for itself in under a decade. "They make enough money to pay for our electricity annually", Mrs Gardner said. "We are paid 43 pence [86¢] for every unit generated and a further 3 pence [6¢] for half the units produced. The government has since been cutting down on the units paid and anyone now investing in this scheme will now only be paid 16 pence [32¢] a unit".

Despite the cut, Ivan Posa, who spent $25,000 on 20 solar panels at his Hamilton home three years ago, envies the British scheme. His family bulldozed an old home on their rural Tuhikaramea Rd section two years ago and began building a four-bedroom home which they crowned with 20 solar panels.

Solar power, installed by specialists What Power Crisis, were complemented by a $20,000 wind turbine which, together, should make the Posas self sufficient. Mr Posa, a retired farmer, cannot be certain how self sufficient he, wife Deb, and children Mili, 17, and Zach, 15, are but guesses it is about 80% at the moment. That is with an unfinished house and underfloor heating, an idea borrowed from ancient Rome, which Mr Posa jokes would cause the lights in Hamilton to go out if it was turned on full bore.

"When I started the house building I thought it was an opportunity to install solar panels from the start", he said. "It's hard to work out where power pricing is going to go and the price of panels is relatively competitive at the moment". In fact, the cost of photovoltaic cells has fallen by about 80% this year to about $1.25 a watt, causing the likes of WEL Networks to investigate the economic viability of building solar power stations in the region.

WEL Networks chief executive Dr Julian Elder said the British market had experienced unprecedented growth. "New Zealand is well behind Europe due to many factors, but mainly the lack of feed-in tariffs and subsidies". At the moment an abundance of renewable energy, such as hydroelectric and wind, meant it was more cost-effective for power generators to expand existing facilities such as the Te Uku wind farm. Mark Hanson, acting communications manager for retail at Mighty River Power, said the state-owned company was not involved in any form of solar power investigation. "The company's priority is with its geothermal programme and potential wind farm developments,' he said.

Energy Efficiency and Conservation Authority chief executive Mike Underhill said: "We have a high amount of untapped large-scale renewable energy. The other thing that we have got is a high number of renewable power stations. There's 3000 MWs of current available from consented sites and if they come off that's where the new generation is going to come from for the next 15 to 20 years".

But from a homeowner's perspective, hooking a home up to solar panels is a no-brainer. Just three weeks ago a similar sized photovoltaic project at the Forlong family home in Howden Rd, Frankton, where the same company installed 18 solar panels, cost $12,000. Dad Howard Forlong, a director at Forlongs department store in Frankton, got the idea from a stall at the National Agricultural Fieldays.

When he sat down with a chartered accountant he realised that installing the panels at the house he shares with his wife, Helen, and children Harrison, 17, Stephanie, 16, and Jonathan, 13, would pay for itself in about seven years. "It's got a 9.6% return on investment, compared to 4% if I put it in the bank". he said.

In the three weeks since he threw the switch he has saved $22 on his power bill. As well as generating their own electricity, both the Posa and Forlong families receive a one-for-one credit for energy they do not use that is fed into the national grid. That means their solar panels can earn them money on a sunny day when they are out or on holiday. "We are on an import and export tariff", Mr Posa said. "We tend to use a lot more [and export less] in the winter and use a lot less [and export more] in the summer. It's hard for us to put an exact figure on it at the moment".

Britton Broun, media adviser to the Economic Development Group for the Business, Innovation and Employment Ministry, said New Zealand differed from other countries as it had a national electricity system dominated by grid-scale renewable generation. "Last year, 77% of New Zealand's electricity came from renewable sources. This is one of the highest levels of renewable electricity generation in the OECD [Organisation for Economic Co-operation and Development].

"The government has a target of generating 90% of electricity from renewable sources by 2025, so more grid-scale renewable electricity generation is anticipated. Consequently, there is less drive for domestic-scale renewable electricity generation here than in many other countries. Instead, the government's push has tended to be for more energy-efficient homes through insulation standards, efficient household heating, and encouraging energy efficiency".