Are Solar Panels Worth Investing in for Australians? Case Study.

Geographical Context 

We decided to base our case study in the typical everyday suburb of Klemzig, a suburb of Adelaide, South Australia, 8kms northeast of the Adelaide CBD. It’s located at the eastern end of the City of Port Adelaide Enfield, adjacent to the suburbs of Hampstead Gardens, Hillcrest and Windsor Gardens. This was chosen as our area of investigation as it is easy to replicate this study to other cities throughout Australia. The purpose of this study is to evaluate whether photovoltaic solar panels are worth investing in, considering their current social, economic and environmental aspects.

Klemzig’s profile is quite similar to other suburbs in the City of Port Adelaide. Klemzig has a total area of 2.5 km2, with a population of 5086 in 2006. Compared to its local council, there is a higher proportion of managers and professionals in Klemzig and a significantly lower proportion working in manufacturing, the median weekly household income is around $725.00.

Summary Statistics
Total Population 5086
Area 2.5 km2
Median Age 40 years
Average Household size 2.1 persons
Median Weekly Household Income $725.00

 

Government rebates are available for eligible households, giving assistance with the cost of installing a solar photovoltaic system through small-scale technology certificates, solar credits and the solar feed-in scheme.

At present, there are no direct federal rebates available for small-scale solar photovoltaic, wind power and micro-hydro systems. However, small-scale systems are eligible for support under the new enhanced Renewable Energy Target (RET).

The enhanced RET allows for the creation of Small Technology Certificates (STCs) for small-scale solar, small wind and micro-hydro systems. STCs are issued by the government for the generation of renewable energy, which electricity retailers and other ‘liable parties’ (such as large users of electricity) are then obliged to purchase in order to fulfil their mandatory commitments under the RET legislation. The RET seeks to ensure that 20% of Australia’s electricity supply come from renewable sources by 2020, as imposed by the federal government’s Mandatory Renewable Energy (Electricity) Act 2000.

The Solar Credits program is part of the enhanced RET. Solar Credits are available to households and businesses that install small-scale solar PV, small wind and micro-hydroelectricity systems. The scheme works by multiplying the number of tradeable STCs able to be created for eligible installations. If the system is installed between 9 June 2009 and 30 June 2011, the homeowner will receive five times as many STCs as under the deeming arrangements for the existing RET scheme. From 1 July 2011, the multiplier will reduce to three times, and will decrease by a factor of 1 each year until it reaches and stays at a multiplier of one from 1 July 2013.

Households, small businesses and community buildings that have solar panels installed may be eligible to receive payment for any electricity that is exported back to the grid. The scheme is open to electricity customers that consume less than 160MWh per annum. The average household uses less than 10MWh per annum. According to the Clean Energy Sector there were 105,520 solar power systems installed in Australia in the 10 months from January to October 2010, more than the 81,232 installed from 2001 to 2009.

Adelaide is Australia’s first solar city according to the Australian Bureau of Statistics. It is one of seven regions in Australia to trial new approaches to producing and using energy as part of the Australian Government’s Solar Cities Program. From 2009 until 2013, Adelaide’s local governments, businesses and the community will support the uptake of 1700 solar panels for homes and business. Consumers installing solar systems are given and will be given financial help to do so. There will also be 7000 ‘smart meters’ installed in homes and business and a campaign to inform the community about energy efficiency and encourage the uptake of green power. The trial is expected to cut energy usage by 28GWh, representing an annual saving of $5 million in electricity costs and a minimum of 30,000 tonnes of greenhouse gas emissions each year.

Findings 

Figure 11 shows that there has not been any installed solar panels on households for more than two years. This is due to solar panels being more affordable and economical in the past years, also government rebates have been available for eligible households. More than half of the locals surveyed (54%) have had their solar panels installed for only1-2 years. None of the respondents have had their solar panels longer than 2 years.

Solar system undergoing installation- photo taken July 2013.
Solar system undergoing installation- photo taken July 2013.
Solar system have been installed- photo taken 7 September 2013
Solar system have been installed- photo taken September 2013

Many households have been recently investing solar PV systems (figure 11) as rebates are becoming lesser and lesser because the solar industry have already been established.  “It is becoming stronger and can now compete with other power suppliers such as gas and do not need any more government support”, said Verity Sanders, the Strategic Planner (Environment Policy) of Port Adelaide Council.“Solar panels reduce electricity bill costs as much as a third and also reduce the cost of running a home”, stated Verity Sanders.

Kilowatt output of solar systems of the respondents
Kilowatt output of solar systems of the respondents
main reason for solar
respondent’s main reason for getting solar panels installed on their roof

Social Findings

There are some council restictions that households are need to be aware of when they are installing solar panels.  There are requirements of adjacent dwelling to make sure they don’t overshadow a next door roof of solar collection panels. Solar panels should be mounted upright at least 10cm of the roof.

The number of complaints against solar power installers has increased over the last few months according to the Clean Energy Council. But the Klemzig area has received zero complaints.

Respondent’s opinion on the aesthetics of solar panels installed on their roof.
Respondent’s opinion on the aesthetics of solar panels installed on their roof

Inspections carried out by the Clean Energy Council have have found systems installed in an unsafe way; increasing the risk of fire. In other instances, systems have been installed in such a way that performance is substantially decreased and complaints have also been lodged about exaggerated system performance information being provided by some companies.

A large percentage of respondents believe that having solar panels on their roof has made them more energy conscious. In Lochiel Park, where it is mandatory for households to have solar panels, the respondents believe that it has influenced them to become more energy conscious and 100% of the local residents surveyed believe that solar panels set a positive example for the community.

Has having solar panels on your roof made you more energy conscious?
Has having solar panels on your roof made you more energy conscious

Verity Sanders, the Strategic Planner of the Port Adelaide Enfield was interviewed, her responses are shown below.

Interview Question Response from Verity Sanders
Do you believe that the government should provide more funds to help low-income earners invest in solar panels? “The State government is providing services to work with low income households (including through Housing SA) on reducing the actual energy consumption in households wherever possible, through audits or better use of appliances, which is actually the most important first action, and ultimately just as important (and much cheaper for the householder) than installing solar panels in most instances”,
Do you think that solar panels should be mandatory for new housing developments in the city of Klemzig? I think that the State government could look at the option of requiring houses (and businesses) to have some solar or other renewable source as part of a new building – some houses however may not have the roof room – so the practicalities have to be considered in each case. It’s a regulation that would have to be put in place by the State Government, as Councils don’t have any legislative powers to mandate that requirement just in their own Council area. 

 

Economic Findings

The initial cost of investing solar panels depends on the kilowatt output of the system but generally it is expensive. Most respondents agree that the initial cost of investing solar panels cost a lot but it is worth the money.

Examples of prices of solar systems
Examples of prices of solar systems

The local residents surveyed agreed that the government should offer larger rebates and that the scheme should be extended. They also believed that the government should provide more funds to help low-income earners invest in solar panels.The table below shows the interview done with Verity Sanders regarding government rebates on solar PV systems. Households may be eligible to receive assistance with the cost of installing a solar system through the small-scale technology certificates (STC), solar credits and the solar feed-in scheme.

Interview Question Response from Verity Sanders
What do you think about the government rebates and incentives? Do you think they should offer larger rebates? I think that once the cost of solar panels becomes much cheaper ( which they certainly are now), then there will be a time when the public funds (government rebates) no longer need to support the industry, and they can stand on their own two feet, as other power sources are required to do.
Do you think the government should extend the scheme? The current scheme seems to have been extremely successful, to the point where the industry is struggling to keep up with demand, so I think there’s a limit to how long the scheme needs to run for. As solar panels become cheaper ( as they are doing) they will become a standard option for any house, and particularly for new houses where the cost of installing panels becomes part of the overall cost of building the house, and can be absorbed into a home loan over a period of time.

 

Environmental Findings

None of the respondents have ever had any problems with their solar panels since they were installed, which is great news for prospective solar panel owners. From an environmental standing there have been no concerns from the respondents but rather a positive increase in their views towards living environmentally.

Conclusion

Solar panels have positive environmental implications resulting in reduced dependency on mains electricity, which means we will need less new major power stations to be built in the future – this is particularly important given that Adelaide will continue to grow in the next decades, so for that growth to be sustainable, we have to reduce our demand on the system in many ways as possible to allow for that increased growth. Solar panels reduce pressure on fossil fuel resource. It also reduces Australia’s carbon emissions thus reducing the impact of the enhanced greenhouse effect. Solar panels can also result in an increased environmental awareness and energy consciousness of citizens. On the negative side, the construction of solar systems consumes high amount of energy therefore there is high embodied energy put into solar panels.

Socially, solar panels set a positive example to the community and encourage adjacent streets to consider investing solar systems. Solar panel installations are quick and easy and don’t need much maintenance. It doesn’t cause any hazard to humans as it is manufactured without using toxic products. Solar panels may reduce base load demand during peak periods thus limiting black outs in communities. There are council restrictions to make sure that solar panels don’t overshadow a next door roof of solar collection. Solar panels are expensive to buy, but they pay off themselves over a period of time. Low income earners and eligible households are supported by the government through federal government support such as the small scale certificate and solar credits. State government supports are available as well through the solar feed-in scheme.

Economically, it helps create ‘economies of scale’ as there is enhanced investment in green renewable energies such as solar. It results to an increased revenue for solar retailers and provides employment therefore result to positive flowback to the community. Government rebates such as the small scale certificates, solar credits and solar feed-in tariff are available for eligible households.  The running costs of houses with installed solar panels are low and are not greatly affected by the projected increase on the price of gas and electricity. On the negative side, solar panels are expensive to invest in therefore it can be difficult for low income earners to afford. Solar rebates for households are ending which will then result to an increase price of solar systems.

Recommendations

  • The government (Federal, State, and Local) should educate people, especially the working demography, on benefits of solar PV systems.
  • The government should invest more into large scale solar generators all over Australia.
  • Government departments should plan to install more solar PV system on their building chambers as it sets a positive example for the community.
  • Solar panels should be mandatory for new housing developments.
  • Government should continue to give incentives to house developers who choose to use renewable energy.
  • Government should continue to reward or give money back to individual households with installed solar panels (photovoltaic power cells).
  • The government should offer larger rebates and extend the scheme.
  • The cost of installing solar panels should become part of the overall cost of building the house and should be absorbed into home loan.
  • The government should continue to plan strategies on how they can support low income earners to invest in solar panels.
  • Improve the energy efficiency of house and business appliance

Do you have an opinion on the benefits or drawbacks of investing in solar? we’d love to hear from you! please leave us a comment or get in touch with us via social media. If you liked this article, support the author and share this post!

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