Solar costs dropping faster than rebate cuts - CBD Energy

Solar power requirement costs have fallen faster than government rebate drops, says Australian listed renewable energy company CBD Energy, making solar an even more attractive investment decision for householders and businesses. However, concerns about whether government will continue to subsidise solar energy are causing consumers to be wary about installing solar systems.

There are two certainties about the direction of energy prices - electricity from coal-fired sources can only go up in price while solar prices are coming down, says CBD Energy Managing Director, Gerry McGowan.

The main ingredient in solar panels - silicon - has fallen in price from around $450/kg in 2008 to just above $ 25/kg today and panels are getting more powerful every day.

Regarding pricing, average energy bills in NSW now show a cost of 20-30 cents per kWh, reaching 43 cents at peak, while solar energy costs 5-7 cents per kWh. Pricing of electricity in NSW is governed by the Independent Pricing and Regulatory Tribunal which, in July, approved a 17.6% lift in prices for 2011, meaning the differential with solar is set to widen further.

Costs of installing a solar system range from $2,000 to $12,000, depending on the size of the system, giving payback periods of between four and eight years at projected electricity prices.

“Ongoing changes to government policy have blinded people to realising how cheap solar energy is and so they’re missing out on protecting themselves from inevitable electricity price rises,” said McGowan.

Not only are fears baseless, but people are missing out on the compelling economics of solar energy.

“There’s also so many safeguards and audits around solar installations that, so long as people make sure they’ve got a qualified installer, there’s no impediment to them using free sunshine to get cheap electricity for the long-term," he said. 

To be qualified, solar installers need to be a licensed electrician and also need special training and accreditation to install solar panels. In addition, solar power systems in NSW are subject to three separate audit regimes: by the electricity authority, regarding connections to the grid; by the Department of Fair Trading, if there’s a feed-in tariff application; and by the federal government, regarding qualifications for solar credits.