Solar Power in Queensland, Australia

When you talk about solar energy, most of the world’s attention is directed towards Germany which has installed an incredible 7 GW of solar power for the last three years. However people don’t know that a massive solar boom in Australia has dramatically changed the power dynamics in the country. Australian Solar Power has been boosted by the state led feed in tariffs which has led to a mushrooming of solar rooftop installations throughout the country.

The boom has been particularly intense in the state of Queensland where an expiry of a solar feed in tariff led to a huge pull in demand. Over 100,000 applications were filled and it is estimated that around 15% of the population now has a solar rooftop installation in place. Here are some of the details about the solar subsidy in Queensland:

Solar Rebates in Queensland

Solar Bonus Scheme

Residential – Customers participating in the Scheme warepaid 44 cents per kilowatt hour (kWh) for surplus electricity fed into the grid (Tariff 11 inc GST as at 1 July 2011).

Eligibility

• consume less than 100 megawatt hours (MWh) of electricity a year (the average household uses approximately 7.9MWh a year)
• purchase and install a new solar PV (photovoltaic) system (solar power system not solar hot water system) or operate an existing PV system (solar power system) that is connected to the Queensland electricity grid
• generate surplus electricity that is fed into the Queensland electricity grid
• have an agreement in place with their electricity distributor (Ergon Energy, ENERGEX or Essential Energy) and have appropriate metering installed
• have solar PV systems with a combined inverter capacity of up to 5 kilowatts
• Customers wishing to claim the solar bonus will need electricity metering that separately records electricity imports and exports.

Power Utility forced to retrench as Demand and Revenues Dive

Solar Power poses a huge headache to power utilities which have always had fixed amount of demand and revenues. This can now be seen in reality in Queensland where Stanwell Corporation, is believed to be seeking up to 100 redundancies. This is being done as the market has become oversupplied with power in a short time, with a big jump in distributed solar power generation by homes. This has led to a sharp reduction in demand of power being supplied by Stanwell and other utilities in the state. I have predicted that Indian power utilities too should be ready for such a situation in the future as high electricity tariffs are forcing customers to turn towards inhouse solar power generation.

Why Indian Utilities should be scared

Solar Energy does not require any fuel like other Renewable energy (Wind Energy) and the operation and maintenance costs are extremely low. Industrial and commercial customers in India have to pay very high prices for power at around 15-20c/Kwh in order to subsidize the power sold to residential customers and farmers. In fact most of the revenues of the state distributors are derived from this segment. However with solar power cost going down drastically in cost, it has become viable without subsidy for these customers. Solar power can be produced these days at Rs 8-9/ Kwh in large scale compared to the prices of Rs 10-12/ unit being paid currently. Industries can now easily generate 20-40% of their requirement by putting solar panels on their roofs. This will sharply cut the revenues and profits of the state distributors. As solar panel costs keep going down by around 10% each year, these utilities will eventually have to lower their tariffs or go out of business altogether.

Herald Sun

QUEENSLAND’S largest power generator, Stanwell Corporation, is believed to be seeking up to 100 redundancies as demand for electricity dwindles in the face of the surging solar power drive.

The government-owned corporation’s newly appointed CEO, Richard Van Breda, confirmed a “corporate review of the structure, projects and expenditure” was under way but he said any redundancies in the 371-member workforce would be voluntary.

“The Queensland energy market is significantly oversupplied and we expect it to remain like this for at least a number of years,” Mr Van Breda said. “A number of factors, such as the popularity of rooftop solar electric systems, along with a drop in the amount of electricity people are using, are keeping demand for electricity very low.”

Unions and employees would be consulted as part of the review process, he said.

About one in six Queensland households now sport solar panels as a result of the generous rebate system set up by the previous government to encourage the uptake of “clean energy”.