Solar costs now lower than coal

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.
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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 28¢ 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.
''A 1.5 kilowatt system in Sydney is probably going to be cost effective next year or the year after, depending on whether we get a carbon price,'' said Muriel Watt, the chairwoman of the association and a senior lecturer in renewable energy engineering at the University of NSW.
The amount of solar energy generated in NSW has surged above the cap imposed by the previous state government.
The Independent Pricing and Regulatory Tribunal said thousands of households were still waiting for their panels to be installed under the $1.9 billion solar bonus scheme, which would drive up the overall cost to the taxpayer. As of this week, up to 71 megawatts worth of solar systems had yet to be fully installed, taking the total amount of power generated under the scheme to 371 megawatts.
When the former government halted new applications last October, it received 38,000 applications on the final day, the tribunal said.
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.
The Australian Solar Energy Society said 416 jobs had been lost since the industry spiked in November, and a quarter of the state's solar installation businesses had closed.
At the Silex plant yesterday, about 30 people were told they would be made redundant and others would be redeployed because the company could no longer afford to compete with cheaper, imported solar cells. The panels will still be made at the plant.
The chief executive, Michael Goldsworthy, said: "This type of silicon flat panel technology was actually invented here in Sydney at the University of NSW … that's the sad thing. Now it's all gone offshore."
The Australian Manufacturing Workers Union said many of the workers had previously worked in the same plant with BP Solar, and were being made redundant for the second time.


SMH