Monday, December 24, 2012


This is a summary of an article of mine  Why Utilities will Pay a Premium for Rooftop Solar published in REnewEconomy on 14 Dec 2012.  It was written to counter claims that people without rooftop solar (RTS) were paying more for their power so that RTS owners could be paid a 44 cent/kWh feed in tariff  much higher than the current tariff of about 23 cents/kWh .

Claims are being made that ordinary householders are subsidising rich rooftop solar owners. For example, Mark McArdle, (Queensland Minister for Energy and Water Supply) issued a media statement saying “the QCA analysis showed the solar bonus scheme currently added $26 per year to everyone’s annual electricity bill, which will increase to $90 next year if an application by Energex to the Australian Energy Regulator was successful.”

He added, “Rooftop solar costs are projected to add more than $240 per year to average electricity bills within five years.” (These claims were based on the previous government’s feed in tariff of 44¢/kWh)
So what is rooftop solar actually doing to household power bills in Queensland? And how high could the feed-in tariff go before it really would be increasing household power bills?
In the detailed section below, a comparison of demand and revenue vs time of day for 2008 and 2012 is used to answer the above questions. The quick answers are:
1. Rooftop solar is actually saving the “typical Queensland household” (without PV) $65/yr.
2. The feed-in tariff would have to rise above 96¢/kWh before rooftop solar actually stopped saving households (and power companies) money. Power companies can actually become more competitive by locking in extra contracts for the supply of rooftop solar, even if it means paying the small premium that was offered to me.
3. It is difficult to say what effect rooftop solar would have on household bills in five years’ time. My guess is that investment in rooftop solar will be justified at feed-in tariffs below what householders will be paying for power and that it will still be saving households money.