Ignore solar pricing at your investing peril

Australian energy policy is a mess. Investors should ignore the arguments. The antagonists are stuck in a perpetual time shift, prosecuting cases from 5-10 years ago, ignorant of the incoming change in solar economics.

5 years ago coal and gas were the cheapest sources of energy in a majority of countries. Now wind and solar are.

“But but but, gas and solar are intermittent. YOU NEED BASELOAD!!!” cry the fossil fuel defenders.

Sure. Today battery + solar is more expensive than baseload coal. The problem is you don’t have to look too far forward to see that it won’t be soon. Coal, gas, oil, all have economics based on a scarcity curve: the more we use, the deeper we need to dig and more expensive to extract. Solar and battery power is on a technology curve, the more the world produces, the cheaper it becomes:

Long term solar costs
Solar vs fossils fuels

This leaves us with an energy parity where the technology curve becomes an upper bound for the scarcity curve. i.e. the price of energy won’t meaningfully exceed the cost of Solar+Batteries.

Solar+Batteries are the “killer app” – extremely scalable once they reach an acceptable cost. All the current trends point to energy parity being sooner rather than later for electricity.

Relative cost of energy

There are a few big-picture numbers that you should be aware of. All figures are USD/kWh for international comparability. We use levelized cost of energy, which adjusts for the up-front cost of building power plants or solar arrays, asset life and tax issues. These numbers are only approximate, rely on a lot of assumptions and vary by country and region. In general, the numbers are for new installations with recent technology.

Australian energy costs compared

Gas is no longer a transition fuel

Note the fuel cost of natural gas in the table above. Electricity prices from gas are more sensitive to fuel prices than other technologies.
Fifteen years ago, there was a push in Australia to use gas as a transition fuel from coal to renewables. And gas was viable. But fifteen years later, solar + batteries has fallen so much that it is no longer feasible.
If you live in a country (say the US) or state (say Western Australia) with lots of gas and domestic reservation, then gas is still a viable option.  Prices are USD3 per mmBtu or lower.
Energy companies have co-opted energy policy in the rest of Australia. Narrabri coal seam gas, the centre of a current battle in NSW, at best will be around $6 per mmBtu. As you can see from the table above, solar + partial batteries are almost cost-competitive at that price.

Solar Cost Trends

However you measure it, the cost of solar has fallen dramatically relative to other energy sources. Opponents will rightly point out that solar only supplies power during the day and wind power is intermittent. What is needed is something to store the energy, and fortunately, batteries are on the same type of price curve:

Battery prices will continue to fall because:

  • governments (in some countries) are lending considerable support to fight climate change
  • phone makers are spending significant research and development money on the battery problem
  • electric vehicle makers are spending substantial research and development money on the battery problem
  • there are a range of new, more efficient solar technologies that have been proven in the lab but haven’t progressed to the real world yet
  • simple scale manufacturing benefits will help as more batteries are produced

In Australia, often the argument gets confused because we typically buy systems from offshore, and so the dramatic fall in US dollar prices has been partly hidden by the falling Australian dollar.

Future Prices

There is a range of different outcomes we could see for electricity prices.

Below I have focused on two different scenarios, one where solar+battery costs fall at 10% per year for the next five years, another at 20%.

In the last ten years, costs have fallen around 20% per year. Given how low solar costs are, the critical assumption is battery prices. A 20% fall in battery prices will have a much larger impact than a 20% fall in the cost of solar.

Price of solar and batteries over next 5 years
Price of solar and batteries over next 5 years

Either way, there is very little scope for coal prices to rise. Suppose the 10% per annum cost savings are achieved. In that case, there will be no new fossil fuel power plants in even moderately sunny climates.

Existing coal-fired plants with lots of remaining life will start shutting down if 20% per annum cost savings are achieved.

Rooftop Solar 

I have deliberately left Rooftop Solar out of the above tables, as rooftop solar is less comparable than you would think. Roof-top solar has costs of around $0.13 if you assess it on the same basis as above.

But that is not important. Rooftop solar is not competing with a coal plant, or even with utility solar.

Rooftop solar is competing with grid power + grid infrastructure. It is an important distinction.

I don’t care whether my rooftop solar produces cheaper than the local coal-fired power station. I care whether it produces at a cheaper rate than I pay for power – and it does:

Rooftop solar cost comparison

The issue is my panels provide power during the day when everyone else’s panels are also producing electricity. So, unless I use it myself to offset the above charge, I get paid a fraction of what the power company will charge my neighbour for using my spare electricity. Also, the peak rate (in the evening) for time-of-day pricing is much higher than during the day.

At $0.28 for partial shifting, (i.e. generating enough power to get you through the evening peak), having some batteries is profitable in the right climate, but the return is low.

The big assumption is the discount rate. At current prices, partial shifting is worth it if you are prepared to accept a lower return.

But batteries aren’t yet a “no brainer” cheaper option.

Looking at the 10% cost reduction and 20% cost reduction scenarios again:

Rooftop solar cost projection

There are lots of questions that the above table raises. If everyone starts going off-grid, who pays for the poles and wires? Do we end up in a “death spiral” where more people leave the grid, raising the cost for those who remain, which means more people leave and so on?

All valid questions.

My best bet is that it is going to be a battle of vested interests. Wealthier people will leave the grid when it becomes economic as they can afford the upfront cost. This leaves renters and the poor left paying higher bills to account for the transmission assets. Governments will have three options:

  1. Prevent retail electricity price rises, support the rights of the many over the few and make the asset owners pay the cost of their mistaken investment
  2. Socialise the losses and bail out the transmission asset owners
  3. Let the asset owners raise prices, shift the cost of adjustment onto the poor

While option 1 would be my preferred choice, the cynic notes option 3 will be the path of least resistance. The lobbyists will no doubt be hard at work on option 2 in case any government have the fortitude to explore option 1.

The Rooftop Solar pub test 

In all of the tables above, we have used an 8% discount rate in order to benchmark returns. This is appropriate for companies looking for an economic return. However, for individuals, maybe the discount rate is much lower. For many people, the calculation involves increase their mortgage short term to pay for the panels with the hope of a lower mortgage in the long term based on energy cost savings.

If we used the mortgage rate instead of 8%, then you can slice 30%+ off the cost of rooftop solar in the table above.

Picking solar winners will be difficult

It is hard to pick solar winners – there are so many competing technologies that are improving, all with different economics:

Solar Technology comparison

Keep in mind this chart is a comparison of conversion efficiency – not of economics. A 20% efficient (low cost) thin-film technology that can be painted onto structures might be much cheaper per kW than a 48% multijunction cell.

The net effect is you can try to invest in a manufacturer, but for all you know the technology will be superseded.

Maybe there will be an alternative renewable technology breakthrough which drives electricity prices lower more quickly. I’m not saying it isn’t possible. However, for investors, the main game is solar – colossal potential and a history of steep cost reductions. I expect other renewable technologies will contribute to lower prices at the margin, but solar is the main issue for electricity costs.

Solar Resources

It matters whether you are in a sunny location or not.

Cities like L.A., Sydney, New Dehli will find solar costs 20% cheaper than somewhere like New York, Beijing, Tokyo as they simply get more sun. At the other end of the spectrum, London or Moscow get about half the solar resources of L.A. or Sydney:

world solar resources

Source: Solargis

You will also note from the above chart that solar resources are pretty good in most emerging countries. This is where most of the growth in demand is coming from.

Investment Outlook

At the moment, it looks like less than 5 years until we see significant changes in the electricity market, even if the cost reduction rate doesn’t halve. And don’t ignore  rooftop solar + batteries. Currently it is a lot more expensive than coal, but retail power prices are a lot more expensive than wholesale. What’s more there is a decent chance these converts going off-grid start a “death spiral” for electricity transmission.

Battery costs are the primary determinant at this point – if the rate of improvement slows significantly, then it may take 10 years. My base case is that battery improvement will be sustained, but its far from a given – this is the assumption to watch.

I’m expecting power prices during the day to continue to fall over the next few years as we end up with a surplus of power from renewables. This will actually drive the pick up in batteries – the more significant the difference between the day price and the evening price, the bigger the incentive for batteries to arbitrage the difference.

The US is not the market to watch – energy costs are lower there than almost any other developed market. A better indicator of the future will be developments in Europe.

Key sectors:

  • Coal/Gas: I’m in no way saying that coal and gas will cease to be used when we hit parity. However, the price will be limited to no more than solar+batteries, and that cost will fall year after year. Any investment in these companies should be made with falling commodity price expectations – i.e. value them in run-off. There may be short-term shortages/price spikes, but these are selling opportunities. Increases in electric car penetration may limit the downward trend for a few years.
  • Solar companies: Solar manufacturers are difficult – the technology is moving too fast to work out if there will be a “winner takes all”. Service providers to the solar industry are probably a better investment (if you can find one that’s not already very expensive). We have made a few profitable investments in semi-conductor stocks that manufacture “commodity-type” parts for solar companies. It is not a sexy area of the market (and thin margins), but at the right price, some of these stocks are interesting.
  • Industrials: Companies that have high electricity bills during the daytime (or can shift costs to the daytime) will benefit. There are many European materials and refining companies that have struggled to compete with US companies because of the lower-cost US energy in recent years that will benefit.
  • Oil: At the margin, less diesel will be used for power generation in remote areas. Expect this to continue. It is not a large part of the oil market, but it will mean oil demand will be weaker than they would have otherwise been.
  • Electricity Transmission: Will these companies get bailed out? Will increased prices to offset falling customers be allowed? Or will companies take the pain of the “death spiral”? It is a country by country decisions – lots of risk in this trade.
  • Electricity Production: The toughest thing about an investment today for these companies is that the company who builds a solar array next year will have lower costs than the one who built last year. Plus the regulatory risks from the “death spiral”. Another risky trade.

None of this relies on carbon taxes. Carbon taxes will only accelerate these changes.


Damien Klassen is Head of Investments at the Macrobusiness Fund, which is powered by Nucleus Wealth.

Follow @DamienKlassen on Twitter or Linked In

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Damien Klassen is an authorised representative of Nucleus Wealth Management, a Corporate Authorised Representative of Nucleus Advice Pty Ltd – AFSL 515796.

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  1. Arthur Schopenhauer

    Interesting tidbit, Australia has the fastest adoption of roof top solar in the world. It’s 2x the rate of second fastest, Germany.

    People are talking with their wallets. It’s the biggest tech adoption since smart phones. Invest accordingly.

    While the federal government fks around with its mates, the suburbs are installing solar, regardless.

    • For the time being, at the residential level, good-quality solar is a no-brainer – it really is. Payback is currently 3-7 years.

      I will be going for large battery storage + solar as soon as I can; still decent returns. Payback is currently 7-10 years. Better if you have excess power and can sell back to the grid directly, or participate in a virtual power plant.

      • Arthur Schopenhauer

        It’s becoming progressively more difficult to sell into the grid. Part by design, and partly infrastructure. But, nobody really cares.
        Our Melbourne energy prices are insane. It promoting solar and wood fires.

        • Probably explains why Simply Energy just cut FITs by 20% this month. Anyone outside of grandfathered deals getting better than 10c in Vic?

          • regulatory capture. a good installer will design a system that minimises grid exports and maximises self consumption. ie, east, west and some north panels with a hot water diverter and potentially heatpump/AC. if your installer is selling you a system that exports they are not doing it right.

          • Agree with energywonk but even then without battery there is likely to be some exported (e.g. we have panels on E, N & W and put enough on for future battery use). Batteries still too expensive atm.

          • FiITs are going down because wholesale prices are going to zero/negative due to the aggregate volume of excess solar. It’s not a conspiracy! It’s market efficiency. In any case, self use is where it’s at … you’re offsetting 20-30c/kwh.

        • This

          I checked for our new place – limited to a 5kW inverter. We can have bigger but would need to sink power somehow. They contract around you not pushing more than 5 into the local grid.

          [I understand that’s an infrastructure capacity issue I think at the street transformer?]
          I mean, put a battery on and add an EV and that’s fine.

          Anyway, to the post, as soon as NSW rolls out the interest free loans for PV+battery, we’ll be adding a battery and probably another 3kW (to existing 6) PV.

          • Check, usually it is a 5 kw per phase limit. 3 Phase inverters are not much more expensive.

            In Melb eastern suburbs we can export up to 10 kw on 1 Ph.

  2. Damien, how long do you think it’ll be before the first HVDC link from Northern Australia to the Indonesian chain, and then across the strait to mainland Asia?

    I think we’ve got the geography to be a big baseload provider to the world indirectly. Our sunrise is at the Californian sunset. Our sunset is at the west African sunrise. During our peak daylight, most of the global population is pre-dawn or post sunset. Our needs in contrast would be relatively trivial for the rest of the world to cover at night.

    • Dubious the Singapore Government will ultimately let it happen. A long underwater cable isn’t that defensible in times of war. Plus the Tasmanian one blew up a few years ago and took an eternity to fix.

      • exactly turncoat. i could tell you some stories about that piece of crap. also owned by Temasek. wont happen. i will put money on it. or buy the CDS if it does.

      • Shades of MessinaMEMBER

        They might be willing to take 5-10% of their total power needs with zero capital input. The project proponents need Singapore more than the other way around.

        Surely it makes more sense to run the cable back into Melbourne and Sydney ??.

    • this is a billionaires thought bubble (cannon brookes) no one with any experience in power trading over HVDC has told him no. its ludicrous. distributed PV+ES with a hydro balance via short cable is a much better for the customer and the environment. i wish this dumb idea would be killed off.

      • Eh? What’s the big issue? You link to Timor/Indo (~ same length as NorNed), they run their own standard AC terrestrial links and HVDC between the islands.

        ~250m customers right there. Mainland Asia via Malaysia would be their idea to on-sell any excess. So on, and so forth.

        You seem to think the idea is completely without merit, while I see it as an eventual inevitability. The question is when?

        • you know what’s more important to govs than cost when it comes to power supply? Energy security. Its taken Europe 70 years and a monetary union to start relying structurally on each other for power. Canada and the US are the only other large scale example of success. Singapore would see it built and then build their own supply on island as backup, destroying the economics of the cable. This is what they’ve already done with their LNG terminal. Malaysia can’t even agree to supply peninsular from its borneo territories that have 90% capacity factor hydro at 1c/kwh looking for a home because peninsular and sarawak don’t trust each other. Indo is worse.

          It’s a white elephant. Only hope is to pivot to green hydrogen. Asia will buy that as your are not physically locked into a single supply source.

    • Damien KlassenMEMBER

      Solar + battery costs are falling fast. Transmission costs aren’t. Maybe there is a period where Solar + transmission from Australia is viable, but I suspect it will be a relatively short window before it will be cheaper just to have floating solar in Asia.

      Does anyone know why we have solar farms targeting Asia before they target Sydney’s evening/night time loads?

      • The NEM is saturated with utility solar project and potential projects. The Suncable guys (the NT to Sing project backed by Twiggy and Cannon-Brookes) is by some guys trying to monetise high quality Aussie solar outside the Aussie NEM, where prices have gone to crap and regulatory risk is huge. They are/were also betting on a better RE to thermal price spread in Singapore rather than RE saturated Australian power prices.

        The Suncable project is big, but still a % of the total number of renewable projects proposed for the NEM. There is no home for Suncable in Aust (unless we industrialise the far north as part of CCP decoupling).

  3. It’s about irresistible tech trends – renewables, and storage of renewables, will destroy all…it’s just tech and economics now.

    The necessary infrastructure changes can and are coming, and are even happening now. The investment pipeline is, and will be, massive.

    So much more innovation to come, too.

    I used to be a ‘COAL…BASELOAD…GRRR RENEWABLES111!!1!’ fanboi, but my tech, economic and environmental perspectives have changed.

    Exciting times for energy.

    I hope Australia takes hold of it with both hands.

  4. Arthur Schopenhauer

    Nice article Damien. In this changing world, battery supply, will be more of a factor than unit production cost.

    (To avoid a strategic supply weakness, Australia needs 2 battery factories along with a nuclear plant to supply the energy. It could be coal, but that’s not sustainable.)

    • good luck building nuclear. particularly at the costs above. we have all the resources we need to build cells here but it is locked up by PANA, Samsung, LGChem and now BYD. where is elon musk to help us build a gigafraud #4.

    • Yeah good stuff. A few points:
      – The new entrants are not competing with the LCOE of coal, they are competing with the SRMC of existing coal plant (no one is building new coal except Asia). This will slow the uptake at the utility level.
      – Solar + battery is the killer app…to a point. It doesn’t provide any inertia and the system will start to fall apart at a certain point (see SA blackout 2016 and UK blackout 2019). This will then increase costs that will get slated home to participants and consumers in some form, slowing uptake.
      – Transmission will be fine, they need to build new lines to reach the new renewable zones and you need a central backbone to get that power to consumers. Transmission remains a business of bulk power transfer with a large buildout tasks. RAB and valuations OK.
      – Grid defection is way overblown. There is simply not enough roofspace for majority residential grid defection. Apartments are terrible. Even free-standing homes don’t work as you can’t economically build out against the 1in10 or 1in100 weather events (a full week or two of rain and cloud) even at vastly lower prices. People will keep a grid connection, but may be able to downsize it via PV/batteries.
      – At the system level there will be reduced energy volumes (MWh, total energy). The regulatory response (which is already law in Austalia) is to move to ‘cost reflective pricing, which means charge more and more on a capacity basis (MW, peak power). Batteries will mean you can reduce your grid connection size (its capacity in MWs). Distribution networks become over/under transfer grids, not unidirectional bulk power grids like today. Lookout RABs and valuations.
      – Battery prices are falling faster than you think. Think USD$100/kWh or less delivered by end of 2021.

  5. Solar is great until one day there is a massive volcanic eruption, an asteroid hitting the earth or some country nuking their neighbour covering large areas in dust clouds.

    • Right, instant solar minimum right there. Could affect house prices somewhat sidewaysedly negaboffed.

      • im not convinced on solar adding value to Real estate. the tech is so deflationary. we are seeing about 10% capacity improvements every year and around 10% price declines….minimum…….as one commenter notes below, the waste is gonna the problem especially in commercial PV where it pays for itself in <3 years.

        • Jumping jack flash

          Panel efficiency degrades to around 60% and they need replacing every 10 years or so as well. This time has been pushed out with each tech upgrade but not by all that much.
          That’s before removing all the grime that builds up on them too.

          Many people forget this.

          They buy a 10 year old house with solar panels and then have to pay to replace them all soon afterwards because they’re getting about 40% out of their standard 4 – 6kW system that “came with the house”.

    • i doubt energy production will be our problem at that point mate. i have some magical fairy coins that i will sell you in just that circumstance

  6. Some support for this.

    Portugal’s second PV auction draws world record low bid of $0.0132/kWh

    According to financial newspaper Expresso, the lowest bid in the exercise was €0.0112/kWh, slightly lower than the $0.0135/kWh submitted by French energy group EDF and China’s JinkoPower in a 2 GW tender held in Abu Dhabi, a price which was confirmed last month.

    • Take that with a grain of salt. Now that renewables are cheaper than current whoelsale prices in Portugal the auctions are becoming auctions for access rights to then be able to privately contract with a commercial offtaker in the system. So, hypothetically, EDF has a 30c/kWh 10 year deal with a large load contigent on winning the auction and being allowed onto the grid. So they bid below cost in the auction and the private PPA contract is a top up against the tender price, keeping them whole and giving energy to the offtaker below it’s current grid price.

      • Very interesting thanks.
        Getting access to the grid is also an issue in OZ. Grid operators don’t want any more weather dependent supply unless it can be backed up from other sources.

    • Damien KlassenMEMBER

      I know! 3 years ago writing about the same thing and there would be six different trolls spreading misinformation and providing links to conspiracy sites. Looks like the coal companies are running out of “marketing” money…

      • We can only hope. But I’m suspicious of the silence …. they must be cooking up another strategy, astroturfing having failed.

        • No, gas-oal has paid its bribes and knows Scotty will look after them 🙂 dog will save them.

      • 3 years ago the echo chamber was not installed yet and there was a difference in opinion among commenters.
        After constant purging, Stalin style, the echo chamber is now packed to the rafters. People just move on to a place where debate takes place.

        But i agree, with this speed of the progress, soon the solar panels the size of the car roof will provide power for insane speeds for a Melbourne Perth trip on a thick overcast day and batteries the size of the pack of Marlboro will provide homes with power for 7 days from a 15 min charge at the local mall whilst sipping a soy late (charging is free with each soy late order, or every 2 espresso lungo)
        The fossil fuel is on its way out, no doubt there. But for a different reason. Solar and wind coupled with batteries for storage will be just another Betamax – better than VHS but not as practical. There are ways to store solar power and convert it back to energy at much better efficiency and environmental impact, but what do I know, I don’t have a fancy avatar….

        • There are ways to store solar power and convert it back to energy at much better efficiency and environmental impact
          Could you give us a few clues?

          • Duckduckgo.com is your friend out of cognitive bubbles created by other search engines.

            Fuel cells and solar-wind to kinetic storage have far greater potential for future development vs. Lithium batteries which are peaking already.

          • TheLambKingMEMBER

            cognitive bubbles

            Which is code word for peer reviewed science. Search away for all your flat earth, we didn’t land on the moon anti-vaxx info there

          • @ Lamb

            I don’t doubt that in your world there are offensive trigger words which deserve all the wrath nourished and prepared to release onto non-believers. A blasphemy.
            For us, the non-dogmatic seekers of information, cognitive bubble comes as an artefact from using mainstream search engines, like guuuugle.

            Over the years, there has been considerable discussion of Google’s “filter bubble” problem. Put simply, it’s the manipulation of your search results based on your personal data. In practice this means links are moved up or down or added to your Google search results, necessitating the filtering of other search results altogether. These editorialized results are informed by the personal information Google has on you (like your search, browsing, and purchase history), and puts you in a bubble based on what Google’s algorithms think you’re most likely to click on.

            The filter bubble is particularly pernicious when searching for political topics. That’s because undecided and inquisitive voters turn to search engines to conduct basic research on candidates and issues in the critical time when they are forming their opinions on them. If they’re getting information that is swayed to one side because of their personal filter bubbles, then this can have a significant effect on political outcomes in aggregate.

            from this link.
            There is a small benefit from this bubbling of the search though, but it is small and it is hardly a benefit.
            There is a bucketload of research from various independent researchers… but what do I know, it is all “preudo-science” I use deplorable trigger words and I don’t have a fancy avatar attached to my name.

  7. This was indeed a very good summary. Some of the regulated utilities are intriguing in the low yield world as they can offer slightly higher yields. But as you rightly point out a death spiral in their utilization creates complex regulatory problems as they seek to recover revenues from a smaller and smaller customer base. At some point the model breaks – and does government then patch up the utes or are they hung out to dry?

    And the retail customers getting the reliability of a grid connection backup but source cheap energy off their solar / battery facility, this looks good right now but the utes have tools to make thesewfree riders pay such as fixed connection charges or demand charges. And then, the sad reality for the consumers is that, they are trying to have a super reliable localised power system without the technical wherewithal to achieve 99.99% uptime – which value of lost load studies suggest is what they want. After all the cities are full of back up diesel generators and every time there’s a blackout only half of them ever start up.

    So you need to be a technology change expert and a lawyer as well to envisage and trade the energy markets of the future – but it is a good summary.

  8. ashentegraMEMBER

    Thanks Damien.

    The killer, killer arbitrage combination is Wind + Battery. Turn intermittent low value night and off=peak generation into peak premium supply. Further, W + B gets TWO low/nil cost charge and TWO peak discharge opportunities a day, where S + B gets one of each.

    Coal generation will cease completely within five years. Not because the conservation-minded are stomping the streets, but on sheer economics. Avoid fossil fuel businesses – these are stranded assets with nowhere to go.

      • Jumping jack flash

        Can buy 3kW+ wind generators for very cheap. Not sure of their reliability though, but for the price you could buy as many as you liked. Might also be possible to upgrade certain parts inside, like bearings, etc.

        Just put a few in parallel and you’re laughing. Only need about 10kW of generation for an average house. 20kW of battery storage, or so I’m led to believe.

  9. WhatcouldgowrongMEMBER

    Now all we need is a sensible recycling programme for the inevitable megatons of e-waste that are going to come from batteries and rooftop solar. Something like what happened when digital TV was introduced…. no, wait…

  10. Install the batteries at Melbourne Water:

    more than 130,000 homes without power

    60 sets of traffic lights were out across Melbourne


    Yarra Valley Water said some water had not been treated to the usual standard as a result, and that 88 suburbs should boil water.

    Power has now returned and the initial issue has been addressed, however undisinfected water is still within some areas


  11. Diogenes the CynicMEMBER

    Good piece. Damien’s comment about roof top solar having a different cost comparison is exactly right. In WA I pay 28c per unit imported but receive only 7c for any unit exported. Hence my array is aimed at self consumption with east and west facing panels. I’ve already added a small battery 10kW which raises the percentage of self consumption by 20 to 30%. If batteries get cheaper I would be very happy to add more storage, my investment discount rate is basically cash in bank so 1% (if I’m lucky) – solar is a low risk investment. For pensioners it is even sweeter they could put up a rooftop array, eliminate or lower their electricity cost per year and get a higher pension. Good quality panels last a very long time. Batteries less so, my warranty is 10 years so I’d expect it will last beyond that with a 20-30% reduction in capacity at the end of a decade of use. My installer said I was the third residential battery installation in a week so this is definitely happening on the ground.

    • Battery lifespan is cycle based more than age (lithium batts).
      At 100% daily DoD, few batteries will last more than 2000 cycles or about 5.5 years. It does not mean that batteries will stop working, it means more self discharge, more wasted power on charging and discharging and sudden failure possibility increase (e.g in the middle of the comments edit on the MB).
      On top of that, when sufficient number of off-gridders arise, the .gov will introduce solar resource fee per kW of panels, negatively geared for age. Oh and battery disposal fee.

  12. Jumping jack flash

    “I don’t care whether my rooftop solar produces cheaper than the local coal-fired power station. I care whether it produces at a cheaper rate than I pay for power – and it does:”

    Now factor in an electric car, charged from your rooftop/battery system, and the reduction or elimination of ongoing petrol/diesel costs as well.

      • “Most rooftops systems wouldn’t produce enough to easily charge and EV.”

        Indeed, albeit at the wrong time. Unless one works a night shift as Uber driver, charging has to occur concurrent with active use period and that is a bummer.
        To charge a 100kW Tesla S from a 6kW rooftop it will take 17hr in ideal world (in real world 20+ hrs) and that is if your other solar powered devices are off-line. This obviously halves with 12kW rooftop solar and goes to mere 5hrs with 24kW rooftop solar.
        Fit a 50kW panels and the charge time decreases to under 2.5hrs… damn quick.

        • A 100kWh Tesla has a conservative range of 500km and the average car only covers about 250km per week.

          So ~3kW of (dedicated) solar would be enough to keep most EVs topped up (timing problems with cars not being home during peak generation periods aside).

          • Yes, about up to 3hrs charge per day for that model.
            Viable if commuter parking are solar carport lots.

          • To give you some real world examples – when we charge our Testa our house usage goes up to 12kW per hour. This adds about 45km of range to the car in an hour of charging. Our rooftop solar is theoretically 7kw but at any one time never produces much more than 6kw around the middle of the day and in winter even less

            So even working from home with the car in the garage, we wouldn’t produce enough solar to charge the car. Instead, we charge overnight at very favourable off peak rates and use the solar for powering the house during the day. While we are all working from home with a bit of planning around things like dishwashers and clothes dryers, we get pretty good usage from the solar. Our feed in tariff rates aren’t much less than the off-peak rates.

  13. I can’t wait until the Tesla battery day in September. We should get to see some big new improvements in battery technology which will flow through to both grid (think the S.A. battery packs) and consumer applications (electric cars that may in the future do vehicle to grid).

  14. The economics of this are changing due to COVID. More working from home increases demand for power during the day in residential areas. This makes the payoffs from solar much higher now than they were in the past.

  15. • $10b – CEFC
    • $5.0b – Snowy 2.0
    • $3.5b – Climate Solutions Package
    • $2.5b – Emissions Reduction Fund
    • $1.5b – ARENA
    • $1.0b – Grid Reliability Fund
    • $0.5b – National Hydrogen Strategy

    Plus Qld govt subsidies rooftop solar by $250 million each year until 2028

    Take away the subsidies and see how solar goes

  16. MountainGuinMEMBER

    Still hoping that low and negative cost electricity in the day can create some good outcomes. Cheap EV charging, energy intensive manufacturing or the foundations for the mytical hydrogen industry. Encouragement of load shifting should flow too, no more night time off peak water heating when it is cheaper to do this during the day.

  17. There is another ‘cost’ issue for Australia that will emerge in 10 to 15 years time. The price of scrap metal will go through the floor as all the Australian gas cartel facilities get scrapped after much anguish and attempts at socialising losses.

    Go long short on scrap metal.