Australian solar energy policy proves a stable model closer to home

Rooftop Solar Australia - Duncan Rawlinson

By Arman Kazemi

July 31, 2014

Earlier this month, Clean Capital reported a shakeup in Australia’s electricity markets in the northeastern state of Queensland, as the expansion of rooftop solar drove down wholesale electricity prices for coal burners to nearly zero.

Now, a new report from the Australian Photovoltaic Institute spells more bad news for Australia’s incumbent fossil fuel generators.

According to an article in the Australian blog RenewEconomy.org, the price for solar photovoltaic (PV) modules in the country dropped by half in the 2012-13 period, from $1.50/Wp to $0.75/Wp (Wp means Watt-peak, the maximum potential power output of a solar panel). The review went on to note that over 1 million Australian households now had a solar PV system installed.

These trends are due in part to Australian government subsidies, especially under the Renewable Energy Target scheme. According to the program, the federal government aims to have 20 per cent of Australia’s electricity come from renewable sources by 2020, a government website explains.

These are targets that the new coalition government under Tony Abbott has recently put under review. But in spite of what sceptics have said against the scheme, PV energy actually “reached parity against retail electricity tariffs in many parts of Australia,” according to the report.

Indeed, as reported earlier, the major uptake of solar PV in Australia continues to be residential, with penetration levels among Australian homes averaging 15 per cent nationwide, and some areas, including Queensland, boasting over 30 per cent uptake.

Closer to home, the Ontario government is leading the way in solar energy policy, with subsidy programs akin to those currently in place with our distant neighbours down under.

According to a Globe and Mail report earlier this week, Ontario will have over 2 gigawatts of solar production by the end of next summer.  That’s a direct result of the 2009 Green Energy Act, designed, according to the article, “to boost renewable energy development… by paying high prices for electricity generated from wind, solar and other clean resources.”

While contributing only about 1 per cent of Ontario’s entire energy output, these efforts alone place Canada among the top 10 countries in the world for the amount of solar installed.

Under the Act’s “feed in tariff” program, solar generators such as Newboro 1 in the small town of Newboro, Ontario, for example, are set to receive 44 cents/kWh over the next 20 years, whereas the free market retail price would be less that 14 cents/kWh.

Policy in the other provinces and territories, however, continues to lag behind, as solar panels and installation remains too expensive for industry to compete in the free market. And Ontario itself is reconsidering the feed-in-tariff in light of budget constraints.

Indeed, the next biggest solar project outside of Ontario is a small 1MW farm currently under construction in Kimberley B.C. Compared to the 100 MW farm currently planned for Kingston, ON, the disparity between provinces becomes readily apparent.

With different policy models proving successful, both at home and abroad, it should be time for government to review its approach to renewables at the federal level.

If Ontario’s model is any indication, Canada could be poised to become a clean energy powerhouse that provincial efforts merely hint at. And if solar panel prices keep dropping, that promise could become a reality.


Photo Credit: Duncan Rawlinson