Australia’s 500,000 solar homes

07. December 2011 | Markets & Trends, Global PV markets | By:  Jonathan Gifford

In a report released yesterday at the UN climate negotiations in Durban, the Clean Energy Council of Australia has revealed that more than 500,000 homes in Australia feature photovoltaic systems.

A solar array on a roof in the Australian city of Melbourne.

Due to Australia's ample sunshine, some domestic installations have been far outperforming expectations. Image: Nomad Electrics.

The report looked at renewable electricity generation across the board and revealed that power for around four million homes was produced in 2011. This means that the country is well on the way to meet its goal of producing 20 percent of its power through renewable sources by 2020.

The progress of photovoltaics was outstanding, with a cumulative total of over one gigawatt (GW), being installed between October 1, 2010 and September 30, 2011. There are now 35 times more photovoltaic systems installed in Australia than three years ago.

The progress of photovoltaics in Australia has mostly taken the form of many small, residential installations. Large power plants are rare but have been given a "kick start" by the Federal Government’s Solar Flagships project.

The Federal Government is also having an impact on encouraging residential installations, through its Renewable Energy Credit (REC) multiplier scheme, which subsidizes systems smaller than 1.5 kilowatts (kW). Furthermore, the recently-passed carbon tax will increase the cost of coal-generated electricity, providing a further incentive for going solar.

In fact, with high levels of irradiation nationwide, some argue that residential grid parity has arrived, on average, throughout Australia. The ANU’s Andrew Blakers argued this in a paper released earlier this year.

The Sustainable Energy of Australia (SEA) has further backed up Blakers claims. In a statement released today, the SEA has argued that for households with a 25-year, AUD$100,000 mortgage, the installation of a photovoltaic system will result in savings the equivalent of shaving four years off a mortgage.

The SEA’s calculations are set out in the release: "Assuming a set of solar panels installed for $3, 000 (net price with REC multiplier) for a 1.5 kw system yielding around $600 saving a year in generated electricity costs (at 22 cents /kWh), adding the purchase price to a $100,000, 25 year mortgage to $103,000, if the entire energy saving is reinvested instead to fortnightly repayments of $350 on a mortgage with a 7.5 percent interest rate to $375, the $103 000 mortgage would be paid off in 21 years."

SEA Chief Executive Ray Wills said that the logic of increasing electricity prices means that the savings will only increase over time. "Of course if electricity prices rise the value of savings increases, and your ability to pay off your mortgage would not be compromised by rising energy bills."

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