Annual Cost of Australia’s Solar Subsidy Scam Hits $2 Billion & Sends Power Prices Into Orbit

The line that Australia’s rocketing power prices will soon plummet is just a cruel hoax.

The subsidies for large-scale wind and solar under the Federal government’s Large-Scale RET will total more than $60 billion over the life of that scheme: the Renewable Energy Certificates issued under the LRET have already added more than $15 billion to power bills, so far.

And then there’s the billions in taxpayer’s money ladled out by the Clean Energy Finance Corporation in soft loans to wind and solar power outfits, as well as billion dollar gifts and grants from the ARENA fund, eagerly lapped up by renewables rent seekers.

The other game in subsidy town is the Small-scale Renewable Energy Scheme (SRES), which is another Federal government subsidy rort, that benefits householders and businesses who slap solar panels on their rooves.

The piddling amount of ‘look at me, I’ve saved the planet’ power produced when the sun’s up and the sky is clear is hardly worth the $1.3 billion a year cost of subsidies, born by those without rooftop panels. For $1.3 billion (the current annual cost of SRES subsidies) Australia could have laid a pretty solid down-payment on a 1,000 MW nuclear power plant, delivering power 24 x 365, to all and sundry, not just the privileged few.

The poorest and most disadvantaged will never afford solar panels and plenty of families simply can’t afford power from the grid, either.

Australia’s renewable energy debacle has left more than 42,000 families either without power or facing a daily struggle to pay for it: Australia’s Renewables ‘Transition’ Leaves 42,000 Families in Abject Energy Poverty

For the wealthiest though, the $1.3 billion annual subsidies to small scale solar allow them to reduce their power bills at their poorer neighbour’s expense, while pumping up their virtue signalling egos.

The SRES, like the LRET, runs until 2031. Which means that subsidies paid to householders under the SRES will add at least $17 billion (13 x $1.3bn) to the $40 billion in subsidies to large-scale wind and solar. For that kind of money, Australia could have built the best part of 5,000 MW of nuclear generating capacity, lasting a life time, instead of the short dozen years of economic life expected from solar panels and windmills.

The cost of the LRET and SRES is staggering; the consequences an economic disaster. Here’s The Australian looking at the second greatest rort under the southern sun – and it looks like the earlier estimate of the annual cost of the SRES scam – at $1.3bn – is shy of the mark by a cool $700,000,000.

$2 billion solar subsidies to send household bills through the roof
The Australian
Perry Williams
17 October 2019

Energy consumers are set to pay nearly $2 billion for rooftop solar installation subsidies next year, hiking power costs by up to $190 for every household, an expert analysis has found.

The federal government’s small-scale renewable energy scheme (SRES) — which the competition regulator wants wound down and abolished — will result in the cost of subsidies ballooning by 50 per cent to about $1.8 billion including GST in 2019, according to Sydney-based renewables trader Demand Manager.

The additional impost amid high electricity prices may accelerate calls for the scheme to be junked as new federal Energy Minister Angus Taylor comes under pressure to reduce household power bills.

The solar industry has previously called for the government to rule out ending the small-scale solar scheme, saying it would deprive households and businesses of their only means of lowering power bills.

But analysis of the cost of small-scale technology certificates, which are handed to consumers installing solar panels and then bought back by electricity retailers, shows a soaring cost to all power users.

About 30 million new certificates will be created this year and more than 36 million certificates are forecast to be supplied in 2019, the trader says. The “cost per household in Australia is in the order of $190 per household”, Demand Manager owner Jeff Bye said in a report released yesterday. “The SRES is effectively an uncapped program — the more solar installations, the higher the SRES program cost.”

A change to the solar subsidy may be imminent given the government’s focus on reducing power prices, Demand Manager told its clients in the report.

The government-run Clean Energy Regulator earlier this month released figures showing 1600 megawatts of small-scale solar capacity would be installed this year — a 44 per cent jump on 2017 — and the equivalent generation that Victoria’s Hazelwood coal plant supplied to the national grid before it was shut down.

Victoria’s push to have 650,000 owner-occupied households receive cheap rooftop solar over the next decade will add a further $1bn to the overall cost of the SRES subsidy over its lifespan, its analysis found.

Origin Energy revealed in August the government’s small-scale renewable energy scheme and state-based solar feed-in tariffs now accounted for up to 15 per cent of bill charges.

Consultancy Deloitte says that with solar and wind power in Australia now competing in price and performance terms with fossil-fuel sources of generation, the country’s clean-energy industry should move on from any ties to subsidies.

The Australian Competition & Consumer Commission also savaged the subsidy in its July blueprint to reset the national electricity market, arguing government support for household solar had been a well-intended but misguided policy.

Solar schemes were too generous, unfairly disadvantaged lower-income households and had failed to adjust to the changing economics of household solar, it said. Rooftop solar subsidies should be axed and the states should take on the cost of “excessively generous” solar feed-in tariffs to ease the burden of green power schemes that it estimated cost households up to $170 a year.
The Australian

Middle class welfare: powering up with other peoples’ money.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Bruce Gooderham. says:

    Where is the Tobacco gruru professor Simon Chapman now? GORN AWL. The WHO has made him and his mates a laughing stock and fools. We knew this would happen and we all tried to get them to do the research and sort the mess out. But “NO“ we were too dumb to know. We knew their crap would go to SHIT one day and it has happened. THEY WILL PAY!

  2. Jackie Rovensky says:

    wal1957
    Thank you, I agree and agree subsidies should be offered to coal and nuclear. These may not be classed as new industry’s, but new technology is showing that coal can be utilised in a much cleaner manner and Nuclear has been used around the world for years.
    To brush aside secure clean energy production processes is a mistake Australia is going to pay for in the not so distant future and to continue to sell our minerals to other countries while not using them ourselves is foolish and contrary to good Government for the security and prosperity for the people of this Country.
    I also believe there is a place for Solar especially in our outback communities but definitely not Wind anywhere as it has proven to be an environmental, economic, medically dangerous, insecure and costly form of energy supply.

  3. Allan White says:

    Roof top solar must end, simply because of its intermittent nature, it destabilizes the grid. In WA, rooftop solar is collectively largest power station, over which the system controller has no control. Consider if you will a sunny day, the largest power station is pumping and then a thunder storm rolls in over Perth and oops, the largest power station trips. In Hawaii they have stopped new connections to their grid. I live remote, sort of, but we have no grid power, a reason I came here, I would not mind a subsidy, but as a realist I understand there are no votes in that.

  4. Jackie Rovensky says:

    I think we need to look at Roof Top Solar in a different way, we need to stop demonising those who have roof top solar.
    To start with a bit of our background as an example.
    We sold up in town and bought a place in regional SA, with the little we had left after selling and buying we had solar panels installed and a separate solar hot water system.
    Since then we have received a payment for the energy we leave in the Grid, being the excess above our personal use.
    This payment is far less than any energy company sells it on for.
    Those in Australia with roof top solar are not necessarily wealthy, nor are they owners of large overseas renewable energy companies, who take all the profits overseas including the subsidies they receive from the Government.
    We don’t go crying poor old us we need more subsidies to be able to keep putting more and more panels (or turbines) up where people don’t want them.
    We are just thankful for the chance to be able to reduce our costs, so we do not have to beg for assistance from Governments to meet our commitments.
    We are restricted in the amount/size of panels we can install and the amount of energy we can put into the grid.
    We cannot use the opportunity to progressively install more panels to create our homes as profit making business from the feed-in tariff.
    As already noted we receive a small amount back for the excess we do leave in the grid and this is all the benefit we receive.
    We are in fact like thousands of other households, we are not looking for a profit, we are not screeching that we need more and more subsidies, we are just looking to help ourselves.
    We would have installed the solar panels whether we had a refund or not as it would reduce our overall costs.
    I am in full agreement with the large scale energy companies having their subsidies stopped, after all they were originally provided for the industry to become established – well they are established and the reason for subsidies to them is not there anymore.
    Though we should note the companies are receiving more customers each time the Government provides a subsidy to have solar panels installed on private homes and businesses but that is not enough for them they want more.
    As it stands these energy companies are receiving Government financial assistance in two ways – directly to themselves and as a result of a subsidy to their customers. (not forgetting they also get money from the various Government bodies as noted in the article).
    Its not Jo citizen causing the costs to Government to rise its how they distribute OUR money to these companies. Don’t forget we also have to pay the rising prices for goods and services as the cost of electricity goes up.
    Finally just a note:
    at 1.33pm SA time today:
    Production from all sources for SA = Gas 438 – 98 Wind – 23 Large scale solar – 331 small scale solar TOTAL 883MW Demand at that time in SA 1178MW.
    The following site it a good one to monitor in order to see what is producing what and which State is keeping the lights on and from what source.
    https://reneweconomy.com.au/nem-watch/

    • Jakie
      You stated : “Since then we have received a payment for the energy we leave in the Grid, being the excess above our personal use.
      This payment is far less than any energy company sells it on for.”
      Two things are wrong with that statement!
      1) You are not being payed for leaving energy in the grid. What you are being paid for is the excess electricity that you generated with your rooftop solar and exported to the grid.
      2) The amount that you are being paid for that electricity is the wholesale price, same as a large generator receives. What you pay for electricity from the grid is the retail price. It includes the following components: wholesale electricity, transmission and distribution, subsidies (large and small scale renewables), retailer, government etc. costs & charges. Here in NSW the average wholesale spot price for the last full year was 8.5 cents /KWh while the retail price in our area was about 30 cents /KWh. (depends where you live and which retailer you are with).
      You also stated: “We don’t go crying poor old us we need more subsidies to be able to keep putting more and more panels (or turbines) up where people don’t want them”.
      Think of those in straightened circumstances that cannot afford PV solar panels. They are subsidising you who can afford them.
      Also consider what would happen if everyone on the grid had solar panels like you. Who would pay for the feed in tariff? This system only works if a reasonably small portion of the population has rooftop solar.
      When you are using electricity generated by your PV solar, you are not paying your share of the transmission and distribution infrastructure costs and these must be unfairly billed to those wholly dependent on electricity from the grid. So the poor take another hit. That cost is part of your retail cost, as stated above and is higher because it is shared between fewer users (fewer KWh of electricity sold to share the cost between). The costs itemised above other than the wholesale cost are not reduced when you and others use solar PV.
      I would not purchase a solar system, I can afford one, as I feel that it is reprehensible a well as immoral being subsidised by the poor who cannot afford solar.
      John

      • Jackie Rovensky says:

        Good for you that you have a stand not to use solar, would you change your mind if you chose to go off grid?
        WE would find it very hard to be without it now – when we could afford to put them up we did to ensure we had a secure future. Yes there are people who cannot afford to install them and I DO UNDERSTAND THAT. I have children and one could not really afford to put them on while she was able to work, now she is not able to work and is very glad she did have them installed, as she now can afford to have an electricity supply.
        Re your comment about the payment we receive – we do not have batteries so all the energy goes into the Grid and we receive an account which shows what is put in and what we use and if we use more than we put in we receive an account with a payment due. If we do not use it all we receive and a Credit, which we choose to take out annually.
        With respect to the transmission line – I agree it does seem we do not to contribute to it – yet our account is formatted the same as those who do not have Solar connected to the Grid. That is, it is the same format as everyone else’s and the same format as ours was prior to connecting solar. There was never a ‘line’ in the account showing the component amount paid toward Poles and Wires and here is SA we have for years been paying a premium for the ‘Gold Plating’ of our poles and wires.
        Our accounts show what we would be paying if we did not have the Solar.
        Re the price we are being paid for the energy we do not use, it is still a lot less than they sell it on for – which is a nice profit for them considering they don’t produce it.
        I don’t know your economic situation but you are being somewhat harsh by accursing those of us who do have solar as reprehensible and immoral.
        I do not consider myself or anyone else who has roof top solar reprehensive or immoral.
        I do have many concerns about the manner in which our energy supply is being provided and how our Governments are supporting it with OUR money and allowing these companies to charge us excessively at the same time. All while our environment is being destroyed and people are suffering the adverse health effects from these companies immoral and reprehensible tactics.

      • JPM said “I would not purchase a solar system, I can afford one, as I feel that it is reprehensible a well as immoral being subsidised by the poor who cannot afford solar.”

        Hi Jackie Rovensky…. Perhaps JPM meant that the actual policy was immoral as the poor are subsidising the project.
        Personally I don’t blame anybody for taking up the offer of rooftop solar subsidies. I just think it is badly thought out policy.
        It hurts the hip pocket of the poorer people in our country.

        The subsidies would be better spent on new coal fired power stations that provide power 24/7.

      • Jackie
        The ‘Gold Plating’ of our poles and wires doesn’t seem to be very effective considering the number of transmission lines that collapsed in Sept. 2016. Much of the transmission infrastructure costs are for connecting all of those renewables to the grid and beefing up many existing ones to carry the extra current from the renewables. The news media love to call it gold plating but I very much doubt that could be supported with proof. Much appears in the news media that has no basis in fact.
        Considering the statement : “Re the price we are being paid for the energy we do not use, it is still a lot less than they sell it on for – which is a nice profit for them considering they don’t produce it.” You don’t seem to understand what you read. I explained that many other components, besides the wholesale cost, are included in the retail price. You are most likely receiving the wholesale cost. The wholesale price doesn’t include the other components which you did not provide anyway.
        You can see what the wholesale price is at any time at : https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard#nem-dispatch-overview
        The statement :”how our Governments are supporting it with OUR money and allowing these companies to charge us excessively at the same time” further suggests that you don’t understand what you read. The retail price is made up of the components I mentioned above and reflect the costs per KWh of providing the electricity that you use. The main part the government is involved in is with the RET (subsidies some of which you received when you bought your PV solar system), a sizeable component in the retail price.
        Re : your comment about the payment you receive – we do not have batteries so all the energy goes into the Grid and we receive an account which shows what is put in and what we use and if we use more than we put in we receive an account with a payment due. If what you state was true you would have to use no, repeat no, electricity while the electricity that you produce is fed on to the grid as there is no physical way you can transmit electricity in both directions at the same time. You use what you wish of the electricity that your solar system produces and the remainder, that which you don’t use, is fed on to the grid. How your account is organised and how your private use of your solar generated electricity is metered is unknown to me but it is as I stated impossible to put it on t the grid and use it at the same time. You cannot have your cake and eat it too.
        John

    • No Jackie householders who have been taken in by ideologically blinkered Green/Left governments and the slick advertising of solar panel installers should not be demonised. But it seems reasonable for those with some understanding of the devastating economic damage being inflicted on the country by misguided legislation like the RET to try to explain how the insidious tentacles of the renewables scam function.

      For each Small-scale Technology Certificate (STC) generated the subsidy paid to the owner (or the owner’s assignee) for feed-in power from rooftop solar panels, it is currently around $38/MWh. This compares with around $62/MWh for the LGC subsidy paid for power generated by wind turbines.

      So the real price to the electricity customer of rooftop solar is equal to the feed-in price component say $80/MWh ($0.08/kWh), depending on which state, plus the $38/MWh STC subsidy cost, or a subsidised price of $118/MWh. Depending on AEMO pool price and/or individual power purchase agreements the subsidised price to the customer of wind power ends up being more or less the same ball park figure of $118/MWh. In both cases the subsidy must be paid whether or not the power is needed by the grid.

      Existing coal power stations are capable of supplying power at around $40/MWh although, because the RET scheme guarantees grid access to higher priced intermittent renewables generation, this has forced up the price of coal power which is now increasingly forced to operate in an intermittent stop/start mode. Base load power is not designed to operate in this intermittent mode, it is designed to run continuously and provide reliable low cost power as was the case before the electricity market distortions of the RET were forced on us. There are other costs associated with the intermittency of renewables, perhaps the main one being the cost of rapidly replacing the power of wind and solar when the output rapidly decreases to near zero, as happens when the wind stops or when storm clouds block the sun. The wind rent seekers are currently squealing because the government is considering making them pay the cost of the quick acting dispatchable power (the firming generation) needed to replace the power of their intermittent, anachronistic machines when they go AWOL.

      • Jackie Rovensky says:

        I will not respond again as it seems I am something of a dummy where the finer points of the cost of energy is involved – though I will say I am not one of those people taken in by the ideologically blinkered. I had my eyes opened years ago when Richard Paltridge fought the Allendale East wind project – he won by the way some years ago and since I have done everything a simpleton can to help with the cause to have the industry shut down – maybe I will continue with that and leave the more educated and competent to look after the cost side of the fight.
        But I would like to point out that I did note some years ago that it would be when people realised the financial cost of this industry that more people would wake up to the dangers. So maybe intuition, thinking out of the square and realising some people need different things to get them going is my strength.
        JPM, I don’t know if you have read any of the following but if not you may find them of some interest:
        Macquarie Capital AEMC SENE Options Paper Report to The Green Grid Forum December 2010.
        Green Grid Unlocking Renewable Energy Resources in SA. A feasibility assessment of transmission and generation potential for 2000MW of wind energy in the Eyre Peninsula
        AND
        Eyre Peninsula wind power plan dealt a blow
        • by: Belinda Willis
        • From:The Advertiser
        • May 31, 201111:00PM

        Regulatory hit to wind power plans
        • by: Belinda Willis
        • From:The Advertiser
        • June 01, 201112:00AM

        Paying the price for gold-plating
        The Conversation
        By Mike Sandiford
        Business Spectator
        5:37PM August 17, 2012

        SA Power Networks owned by billionaire Li Ka-Shing makes four times more profit out of us than its UK group
        Miles Kemp, The Advertiser
        June 4, 2014 10:19pm

        As you will no doubt know there are now plans for the Eyre Peninsula in SA to have huge Renewable energy projects installed, some of which will help power the Steel Works at Whyalla.

  5. Solar Ruinables says:

    In the 9 years we have had our panels, the inverter has been replaced twice, wiping out any savings. The economics savings of intermittent rooftop solar are grossly overstated!!

  6. Replying to Eric @7:05pm

    So the rest of us provided the subsidy of $6000. We also provide the $100pa.
    At the same time our costs have gone up the same as yours.
    Don’t you see anything wrong with that scenario?

  7. Eric Galloway says:

    All i know is my solar panels cost me $5000
    There were $6000 in subsidies they now give $100 pa while my bills have gone from peak 19ckwh to 55ckwh

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