26 Sep Solar hits ‘parity’
THE cost of solar power in parts of NSW has for the first time crept below that of coal-fired electricity – seen as a key tipping point for the expansion of renewable energy.
New data shows solar power is edging towards “grid parity”, after which it becomes cheaper than fossil fuel-generated energy such as coal and gas, even taking into account the upfront cost of buying rooftop solar panels.
But it was one of the few bright spots for an industry suffering from a 93 per cent drop in rooftop panel installations since the boom late last year at the peak of the NSW bonus scheme.
Workers at Australia’s only commercial solar cell maker, the Silex plant at Homebush in Sydney, were told yesterday that cell production would be outsourced to China.
Nevertheless, the flow-on effects of the subsidies have helped achieve grid parity across wide areas of rural NSW. For the first time, the amount paid to households feeding power to the electricity grid passed 28c a kilowatt hour, which is the equivalent of buying coal-fired power from a utilities company.
Andrew Blakers, the director of the centre for sustainable energy systems at the Australian National University, said: “If you look at the prices being paid today, we have already reached grid parity in a lot of places except Melbourne and Hobart.”
In Sydney, the price paid for solar power fed back to the grid depends on the agreement between the household and the provider, and whether a household agreed to the state government’s feed-in tariff in time to take advantage of high rates of payback.
The Australian Photovoltaic Association said that while some areas had reached grid parity, it could be several years before solar electricity was worth more than coal-fired electricity in most of NSW, and that depended on state and federal policy.
This year, the government was forced to abandon moves to cut retrospectively the tariff applied under the bonus scheme, to limit profiteering.
As a result, the state government is seeking the tribunal’s assistance in setting tariffs for household systems.
Yesterday the solar industry called on the government to introduce interim measures to pay households at market rates for the power they produced until the tribunal’s review of subsidies is completed next year.