The Climate Commission’s (now the Climate Council) recent report, The Critical Decade: Australia’s future – solar energy, predicts that solar PV systems will play an integral role in Australia’s energy mix in the coming years. Rising electricity prices and improving solar technology are just two of the reasons why more than 2.5 million Australians have already chosen to use solar to supply some or all of their electricity requirements.

But is it better to go solar now, or to wait? There are plenty of reasons why now is the best time to act, and here are four of the top reasons to take advantage of solar right now.


1. Rapidly improving technology and lower prices

Solar technology has become more efficient and effective in recent decades, with Australian scientists playing an instrumental role in improving solar PV panel efficiency. These advances have had a positive impact on production costs. Better grid management and storage means that homes and businesses are able to use solar energy day and night.

According to the Climate Commission’s The Critical Decade report, the cost of producing solar panels fell by 75% between 2008 and 2011. The report states that the cost of a solar PV system today is less than a quarter of the price 10 years ago.

Lower prices are also being driven by growing investment and policy changes. Renewable energy options such as solar have become much more cost competitive as many countries around the world adopt carbon pricing. The cost of solar across Australia is now less than that of the retail price of electricity derived from fossil fuels.

Furthermore, while 25-year lifetime guarantee periods are common for solar systems, payback times can be as short as five to ten years. Owners of solar PV systems can now expect to earn back their installation costs through energy cost savings within a shorter period of time.

Additionally, alternative financing options such as solar leasing, where a financing company owns the system and leases it to the owner for monthly payments, may eliminate the need for any upfront costs. Solar leasing is common in the US and is becoming more accessible in Australia.

2. Rising cost of alternatives

Another key reason to switch to solar is due to the rising cost of alternatives such as electricity and gas. A September 2012 report released by the Australian Bureau of Statistics (ABS), Household Energy Use and Costs, states that retail electricity prices rose by 72% in the five years to the June quarter of 2012. In the same period, the cost of gas and other household fuels jumped by 45%. The Consumer Price Index for the same period rose by just 15%.

The uptake of solar energy can have additional benefits for the prices of alternative energy options. As more households take up solar energy, the cost of gas, electricity, and alternatives can be lowered, as switching to solar reduces demand during peak periods.

For example, solar energy has reduced the cost of the electricity price exchange in Germany by 10%. The German example shows that a more diverse energy mix could have a positive impact on the price of traditional energy sources such as electricity and gas, by reducing demand pressures in the energy markets.

3. Government rebates

A third good reason to upgrade to solar is the cut-backs to government rebates or feed-in-tariff programs for solar PV systems. As an indicator of the economic savings of solar power, the solar PV industry continues to see strong growth in the aftermath of rebate cuts.

The government rebates or concessions available for solar panel systems consist of the Small-Scale Technology Certificates (STCs) and the feed-in-tariffs. STCs are created for solar, wind and hydro systems. The number of STCs available for a new system will depend on the size or capacity or the amount of electricity consumed, and the region where it is installed.

Generally, STCs are assigned to the system installer in exchange for a discount on the system, but system owners could sell the certificate themselves.

Feed-in-tariffs are run by the state or territory government and they provide the system owner with a rate for each kW of energy that is fed back into the system. Feed-in-tariffs can therefore allow homeowners to reduce their payback time on the costs of installation. Each state or territory government has its own eligibility criteria for feed-in-tariffs.

4. The current energy mix in Australia

According to the ABS report on household energy usage in Australia, 24% of Australia’s energy consumption was derived from natural gas in 2009-10. Electricity accounted for 22%, while diesel supplied 18% of Australia’s total energy needs.

While petrol accounted for 16% of the country’s total energy usage, solar energy accounted for less than 1%. Most of the energy (74%) was consumed by industry. Households used petrol (45%), electricity (21%), and natural gas (14%) to power their lives.

As a country, Australia is still heavily reliant on non-renewable sources of energy, which are carbon intensive and polluting. Electricity is largely generated from coal, while petrol and diesel are non-renewable resources. As the Climate Commission’s The Critical Decade report suggests, Australia must make a concerted effort to eliminate greenhouse gas emissions. The report notes that the fast uptake of solar PV systems has already contributed to massive reductions for Australia’s total emissions.

Figures from the Australian Electricity Market Operator show that Australia has the capacity to produce 100% of its electricity from renewable sources. Solar alone can generate 30% or more of the total energy mix.

Solar power is cheap, renewable, and abundant in Australia. Given the numerous costs of fossil fuels and the environmental advantages of solar power, there is a strong likelihood that solar energy uptake will continue in the coming years. As Tim Flannery suggests, Australia is currently undergoing a “solar revolution”.

Why should you go solar now?

According to consumer website Choice, grid-connected solar systems are unlikely to become any cheaper than they are now. In fact, Choice predicts that prices will rise over the next several years. There are already 1 million Australian homes with solar roofs – the next goal is to install solar systems on another 1 million roofs across the country.

Peta Lewis is the communications manager for Todae Solar and an environmental enthusiast. Since 2003, Todae Solar have installed thousands of solar power systems in homes, businesses and schools across Australia.

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