Hi Ian,
Sorry for the slow response. You asked why is it fraud. The dictionary.com website defines fraud as:
deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage.
I'm no expert so I'll defer to others better judgement, but as I understand it the Mandatory Renewable Energy Target (MRET) is a percentage of new renewable energy that the power companies have to provide by law. In Howard's time it was 2%, and I think it is still the same. One way the energy companies were reaching this target is through purchasing Renewable Energy Certificates (RECs) from people who install solar hot water and solar PV. Many, perhaps most, of these people are not aware what an REC is let alone that it is being used by the energy companies to reduce mandatory renewable energy production. These people are choosing to pay a premium for their hotwater and electricity (many thousands of dollars) and a large part of this choice is to reduce their carbon footprint. When they sell the RECs, they effectively sell their carbon reduction; they allow someone else to pollute on their behalf. It is my opinion that those installers who encourage people to sign away their RECs without explaining the full consequences, are guilty of gross deceit, and an enoprmous breach of confidence. These installers profit from the deceit by advertising lower prices. Together this amounts to fraud.
The federal governments labelling this new plan a "rebate" is even more deceitful. The government is no longer responsible for the $8 per watt rebate, which amounts to a significant profit from the new scheme. Again this combination amounts to fraud.
There is no rebate associated with this latest scheme. It is purely creative accounting that switches funds the energy companies have already committed to new renewables to support the scheme. Now this might not seems so bad except (1) the government has effectively slashed their rebate plane from $8 per watt to $0, and (2) the energy companies have reduced their renewable output by a factor of five. The latter because the scheme entitles them to five times the RETs for any system they support.
My back of the envelope calculations of the costs for solar thermal power stations and commercial scale wind power, yields about a 5-6 times $ per watt efficiency over PV. Given that the energy company will foot the bill for about 40% of the cost of installation (the householder pays about 60%), and that they get 5 times the credit for this generous donation, the energy companies are coming out big winners.
For example, a 1 kW system costs about $12-14k. To generate the same amount of power in a wind farm costs about $2.4-2.6k (assuming 5 times greater efficiency). The energy companies pay $5k and receive credit for 5 kW power generation. It would have cost them $12-14k to provide the same power generation through wind (i.e., they pay only 35-42% of this).
Your points about increasing demand for solar and reducing distribution costs are quite valid and important, but I still believe the new scheme amounts to fraud. I think Greg Watson did a calculation of the actual costs of distribution, which amounted to a 10% saving for rooftop power generation (from memory, could be wrong).
If you do the calculations, solar PV has to come down in cost dramatically before it makes economic sense to implement widely. The governments previous $8 per watt rebate would have had a greater CO2 impact if the money had been invested in wind or solar thermal, even inluding the reduced distribution costs of rooftop energy production. It would be difficult to measure the reduced energy consumption of households who become highly energy aware after installing solar PV, so on the whole I'm still undecided about how well spent the rebate was.
I look forward to comments and corrections.
Cheers,
Kevin.
Hi Kevin,
I've read similar comments in the past, and sort of understand the
sentiment, but why is it a fraud?
Most people installing a PV system do so because a large part of it
is paid for them (on smaller systems that is). Whether we like it or
not, power companies for the time being, will continue to pollute.
The rebate has nothing to do with the RECs so why intertwine them?
The reality is, over time, the more people using renewable energies
the better. More product sold, the lower the prices and the more
research carried out. Long term....would seem rosier! Only then will
power companies be forced to be clean.
On a side note, a few years ago, our local distribution crowd "had"
to upgrade their ugly transmission lines. I've forgotten the figures,
but they spent billions to do it and now have continual "expensive"
maintenance. I wondered at the time whether anyone had put pen to
paper to work out how many roof top systems (grid connected) the cash
could have paid for. It surely would have supplied enough to make up
their so called short fall of power to the Gold Coast area. Imagine
the bulk buying discount!
Ian
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