We often forget the real cost of producing electricity from coal. If we take into consideration all the land which has been lost for open cut mining, power stations, substation, rail and transport corridor and transmission towers and put a little bit of value on our environment, the cost of solar power would come out well in front of coal powered electricity. The massive amounts of water required at power stations to create steam and to provide for cooling adds to the cost of all water consumed and indirectly everyone pays more, if living in a city or using water as a farmer or a business. If we estimate that coal-powered electricity emits about 40% more carbon dioxide than ceramic fuel cells and 100% more than solar power, should we put some value on carbon?

I am sure if some truly independent costing is done (not a nice dinner with a coal industry lobbyist), then our Governments would increase efforts to push for more solar installation and the widespread use of ceramic fuel cells. 

As a safety requirement solar systems are required to cutout when the mains voltage drops below 210vac to 215vac.

This poses an interesting problem; on a hot day over Christmas my solar system cut out with an error message which defined a mains undervoltage problem,  the voltage was around 205vac.  This means that in periods of sunny days and high temperature when everyone is using their airconditioners many solar systems will cut out when they are most required, mine did not produce very much power that day.  There seems to be a need to review the safety aspects here otherwise we are shooting ourselves in the foot!

You have just produced your quota for the day, its in the bank, use some of Country Energy's and you will still be in credit.

What happens at night time with our PV panels?

I live in Tweed Heads have a 3 kW system, last 3 monthly bill was a credit of $451 - and that's with west facing panels. 

I monitor power usage closely, the biggest and unavoidable power hungry appliances are the refrigerators, a necessity!

Small aircons run at about 10 cents and hour, but they are not on all day.

Every home should have an Australian Government subsidised power generation plant on their roof.

I live in Perth and have a 2 kW system. The grid cost of electricity here is 21c/kWH. My system on average produces electricity at 17c/kWH, thats without any subsidies. With the commonwealth REC subsidy on construction that drops to 8 c/kWH. The state Net feed in of 47c/kWH is just a bit of extra gravy and not really important.

This is a no brainer for any owner-occupier who has a  suitable roof.

I read today that the NSW Govt is to support a solar farm at $150M that will provide green electricity to 10,000 homes.

Smart work, that’s $15000 per home and the profits/rebates/incentives go to the supplier and installer of the solar farm.
Wouldn't it be smarter to get 10,000 home owners to install 2-3kW systems and give these home owners a credit from a power company instead of a bill rather than funnelling our money into the pockets of already extremely rich individuals whilst everyone's power bills increase.
Labor Governments have great difficulty in thinking outside the square, they don’t consult with users.

Give the power to the people - the State and Federal Governments are propping up big business while failing the people of Australia with lack of real support for solar uptake. Why should Germany, with their geographical location be the world’s largest supporter of solar uptake of roof top systems?
We need some leaders who will lead us and provide the right environment for all Australians to reap the benefits of the abundant sunshine we all enjoy.

There are so many externalities and subsidies (another form of externalities?) that establishing the true cost of anything is virtually impossible. At a more practical level, the retail price of electricity on the WA South West grid can be expected to rise above the current WA net feed-in tariff before the scheme expires, if it is not cut short. Nevertheles, the real return on investment in a PV system is not to be found in a feed-in tariff but in a switch from fossil fuel motoring to electric motoring. That would also be the point in time to disconnect from the grid and cut short any increase in grid connection charges. Whichever way I calculate it, household-level energy self-sufficiency seems the way to go. I wouldn't be at all surprised if this would also hold true for many businesses.

It is amazing to see how many people, and journalists are sunstruck by renewable energy.  This is despite the fact non-hydro renewables are not viable without massive subsidies.  Thye are totally uneconomically.  They are damaging our economy.

The same people who have a religious-like belief in renewables, despite the incontravertible evidence they are not viable and unlikely to ever be viable, also have a religious-like belief in catastrophic man-made climate change (CAGW).  It doesn't give me much reason to trust anything they say. 

Solar should help to reduce electricity prices rises - the peaking of solar electricity production is well matached to the air conditioning demand load in cities.  So increasing the level of solar panels should reduce the need for distribution companies to increase their peaking capacity of the distribution wires.  However, given the regulatory system is largly driven by return on investment, you can expect distirbution companies to continue to build capacity as this allows them to increase the distribution charge per unit of electricity.

It seems that a number of people believe that it matters whether the government pays for a subsidy or whether it is imposed upon consumers.  Also, not paying for the externality of pollution imposes a cost on all of society.  I believe it is important to understand the cost of the subsidy per unit of energy and who pays for it.

In the previous NSW solar bonus scheme, NSW electricity consumers cross-subsidised the power produced at up to 60c/kWh for each kWh regardless of whether it was used in the home or exported to the grid.

Additionally, the previous RET scheme would mean that these solar installations would receive approximately 17.5c/kWh from all Australian electricity consumers also regardless of whether or not they ever exported a single kWh.  This year they will receive 16c/kWh.  In both cases all this forecast electricity (15 years) is paid up-front as a subsidy.

There are a number of papers suggesting that rooftop PV needs 40c/kWh.  Interestingly a PV owner that got in last year could be paid almost 80c/kWh to sit at home and consume all their power for their aircon, plasma TV and other appliances in the heat of summer and get everyone else to pay for it. A sweet deal?

I looked at installing a solar system 5 years ago but due to overshadowing had to leave it.  Looking at todays prices of reputable brand panels compared to 5 years ago they have actually increased in value !  and that is with a 20% improvement in the currency!  Where are the great economies of scale we were promissed? 

Really solar is great and very house should have their own mini power house. Correct sizing of the roof top system means you need to "buy" little or no power from the grid.

Isn't this the ideal outcome, or am I missing something?

These incentives for solar energy and efficiencies from these should be rewarded and assistance should come from the Federal Government first - States should offer further incentives to reduce the need for the building of extra power stations.

Here is an opportunity for the ALP to provide real GREEN leadeship instead of GREEN TAXES. But no - they just keep considering ways to punish the citizens of this once great country, they are always putting their grubby hands in our pockets with carbon taxes and lack of real management skills.

In NSW it won't suit the ALP now they are "giving away" all the power stations, they don't give a hoot about the citizens there, proroguing Parliament so they dont really work at governing for around 3 months.

David, do you have a source for your figure of $450m rebates of fuel excise tax for the coal industry? I'm interested to find out more, given that I was arguing that coal doesn't get subsidies.

If goods and services are always most efficiently sought locally, why don't you find your nearest cobbler and ask him to make your shoes from scratch rather than buying them from a big store with all its expensive logistics involved in bringing the shoes from some far away shoe factory?

The fact is that large power stations benefit from economies of scale and this offsets the costs entailed in transporting the electricity to our homes. Whether this ends up making it cheaper than locally-produced electricity just depends on the input costs of each. Energy conversion figures are a red herring - it's economic efficiency that matters.

This is where points about subsidies or pricing in environmental externalities come in. Setting aside the NSW govt. and its Corrobra coal mine plans, "coal subsidies" are something of a myth. It's solar that gets all the subsidies and handsome ones at that.

And while I can see why some argue for solar subsidies to "even the playing field" in the absence of a carbon price, bear in mind that the CPRS was predicted to lead to a carbon price in the order of $30/tonne. That would be less than 3c/KWh on black coal generation - nowhere near 60, let alone 20.

Hunter Valley coal miners received over $450M in fuel excise rebates for digging the black stuff out of the ground last year... makes rebating $250-300M on clean solar energy look like a much better and forward looking scheme if we're really interested in reducing carbon pollution

Apologies, the readers who pointed out that all consumers pay for the tariffs rather than the government are quite right and i've amended the article accordingly.

How will the scheme cost the government $300m a year? My understanding of the scheme is that the subsidy is paid by the distributors who then charge it on to the generality of electricity customers via the retailers. The distributors are also entitled to pass through their costs of administering the scheme, which was looking like adding at least another $150m (over several years) to bills until the scheme was reined in. The other cost is of course the capital subsidy under the SRES, which is picked up by retailers and passed on in the form of higher bills as well. So where does the government come into it?  

Second question - is the price paid for domestic PV 20c/KWh as you suggest, or is that figure the premium - i.e. the total paid includes the actual energy value, which brings it up to around 27c/KWh, which surely still exceeds most tariffs?

I recently met a small startup solar cell manufacturer in Taiwan, one of dozens of new startups in 2010. They showed me their plans for the next 5 years but what attracted my attention was that in their first 6 months they produced 300MW of solar cells.

So, the 3 year NSW government "program" had a target equal to the output of a single, small, startup manufacturers production in its first 6 months.

Actually 300MW (if it was ALL connected to the 60c tariff) would be more like $250 million per year - about the price of two joint strike fighters, except that about 120,000 households get a direct benefit and 300MW of new generation and distribution capacity does not need to be found. It is a blatant lie to suggest that this money will "come from the government" It is paid for by electricity consumers.  If my memory serves me right, to upgrade the electricity infrastructure neglected by the government will actually cost somewhere in the region of $20,000,000,000.

I can’t believe that the NSW scheme has been scrapped. It is very rare for a Government to do a good thing and as soon it becomes successful we see the end of it. The installation of micro power station such as solar panels or ceramic-fuel cells (Bluegen for example) provide a very cost effective and environmentally positive way to secure electricity supplies in Australia. It has been estimated that about 40% of all energy used to generate electricity is been lost in transmission. The generation of electricity at low voltage close to users makes sense and reduces the demand on new massive power stations and huge ugly power lines. Australia needs both, an effective electricity generation industry and local power generation. The feed-in tariffs also provide incentives for people to use power wisely, mainly during times of lower demand. It helps to reduce peaking demand and lower costs to other users, especially industry and commerce

Part of me is very happy to see an increasing amount of decentralised / locally produced energy being installed.  It makes sense to try and generate energy as close to the point of use, as this cuts out the loss of energy due to transmission.

Part of me knows that roof top solar is not the best way to get renewable energy installed. Far better to offer incentives to say industrial companies to install solar at their ware houses and factories as this will generate a much larger bang for buck.

As for me, well I'd love to get some solar water and electricity installed on my house, but due to my neighbours tree over shadowing my entire house, and the council firmly telling me that it helps to enhance the general emenity of the area, I'm stuck with being as frugal as I can be with my energy usage as I'm not going to be able to bring down my costs in any other way.

Every kW of rooftop PV is a small step towards less violent climate in the future.

If coal is so good, let's see how it goes with no subsidies and proper costing of the environmental damage it causes.

If these are so good and make economic sense lets see how many are sold when these rebates cut out?

The $300 million would be much more productivly spent on the floods rebuilding program