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Tuesday, 11 March 2008

Queenslanders receive cash incentive to tackle climate change

Update 13/4: Most of what I wrote in this post still makes sense, except that the actual model proposed by the government is slightly different to what I though it was. See today's post for more detail.
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Great headline, huh? I can't claim credit for it - somebody in the Premier's Office came up with that one to catch the media's attention for today's press release about feed-in tariffs for private solar electricity generation. (Thanks to Ian for pointing that one out to me.)

Like most government statements there's enough spin there to make you dizzy just looking at it. The goods news is that behind the bluster is some really good policy. And a catch, of course.

The announcement lauds the Queensland government's decision to "pay households and business 44 cents for every kilowatt-hour generated from solar power systems at work and at home and fed into the grid." At first glance it sounds like every panel on every roof suddenly becomes a great money-spinner. However you need to read carefully into the definition of "fed into the grid." In the context of the rest of the release it becomes clear that the 44c rate applies only to any additional energy produced by the panels in excess of the energy consumed by the household or business. Your panels have to make more energy than you use before the government (or utilities) spend a cent.

You'd know by now that I'm quite proud of my home's energy efficiency. Our bill just arrived confirming our consumption for the quarter at 7.8kWh per day. (By comparison, Australian government figures I found via Google seem to suggest that the average Aussie household uses around 18, and some friends of ours just got hit with a bill for something in the vicinity of 50kWh per day.) To produce enough energy to meet all of my own needs in a year, I would need to install a 2kW (peak output) array which is estimated to produce almost exactly 8kWh per day on average. Even with the discount negotiated by the Local Power buying group and the federal govt's eight grand rebate I'd be looking at an investment of around $11,000 just to get my quarterly bill down to zero!

If I wanted to actually get some of the 44c/kWh action I'd need to install an even larger 3kW array - an additional investment of 7 thousand for a yearly return of around $650. Premier Bligh's offer doesn't sound quite so generous now, does it?

So I need to explain why I said at the top of this that it's "really good policy". Thankfully the explanation is simple: this policy promotes interest and investment in renewable energy infrastructure, but more importantly it provides a strong incentive to increase efficiency and reduce demand in order to get household or business consumption down below the capacity of smaller PV systems which are presently affordable thanks to the federal government's $8K rebate scheme. For myself, I'll be taking the 4kWh per day threshold as a personal challenge.

Though I may have to wait until the kids leave home before that becomes feasible. Good thing the feed-in tariff legislation announced today is guaranteed for 20 years.

1 comment:

Ian said...

Last time I checked I thought you could just get a second connection to the grid at the same address as an existing connection. That would let you use one for producing electricity at the bonus rate and buy it back on the other at the ordinary rate. You would have to pay a second ambulance levy, though, and doubtless they've thought of that one and have put in place a way to stop it anyway.