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Australia’s energy utilities fight to stop rooftop solar

Solar Industry Battle — Australian Energy Utilities Pushing For End To Rooftop Solar Subsidies, Clean Technica 21 May 14 Australia’s major energy utilities are now united in pushing for an end to rooftop solar subsidies – pitching the incumbent utilities into a major battle with the solar industry and consumer groups over the treatment of household solar.

AGL Energy became the last of the major utilities to throw its hat into the anti-solar ring, declaring on Friday in its submission to the renewable energy target review that rooftop solar subsidies were no longer needed.

AGL Energy also said the large scale renewable energy target would be impossible to meet – earning an extraordinary rebuke from PowerShop, the Australian offshoot of New Zealand energy giant Meridian Energy, its joint venture partner in Australia’s largest renewable energy project, the 420MW Macarthur wind farm – of joining other utilities on the “dark side”.

The issue around support for solar, however, is now the major flash point for the industry. Given the stoppage in large scale developments because of uncertainty around the LRET, rooftop solar is currently accounting for the bulk of renewable energy investment in the country. It supports an industry that provides more than 11,000 jobs, and nearly $3 billion in investment in 2013, as well as supporting ongoing world-leading research.

Those jobs and investment are now under threat. Origin Energy accuses rooftop solar of being a “free rider” on the grid, while most other generators have also called for solar support to be removed. Some of them have the support of the state government who own their business, and some of the state-government pricing regulators who appear to have taken ideological positions against renewable energy.

What is happening in Australia is a reflection of the battles being fought elsewhere between incumbent utilities and the promoters of new technology. Jon Wellinghof, the former head of the US Public Utilities Commission, predicted that incumbent utilities would do everything they could to “stop solar in its tracks” and protect their business models. Unlike regulators in Australia, Wellinghof said it was essential that this transition was accelerated “in the interests of consumers”.

The problem for the incumbent utilities is two-fold. Over the very short term, rooftop solar is eating away at revenues, and profits, at what used to be the most profitable time of the day for coal and gas utilities. This is causing their generators to lose money.

Over the medium to long term, however, the centralized energy system that has formed the basis of electricity grids for a century or more is being challenged by a distributed system that gives consumers a mor prominent role because they are able to generate and store their own electricity.

That is forcing utilities to rethink the way they do business, and they are trying to buy time by forcing back rooftop incentives such as the certificates in the renewable energy target, and the tariffs paid to exports from the grid. The problem is, many analysts say, that many of these measures simply provide a greater annoyance, and incentive, for consumers to look elsewhere.

And it may not be a medium to long term problem, so much as a short term crisis. UBS said in a report last week that while removing solar incentives may cause a short term fall in the take-up of rooftop solar, by 2018 the continued fall of solar costs, and the emergence of storage as a viable option, meant that average households might find it cost competitive to leave the grid entirely.

They, like other investment banks such as Citigroup, Deutsche Bank, Morgan Stanley and Goldman Sachs, say the emphasis is on the incumbent utilities to evolve………. http://cleantechnica.com/2014/05/21/solar-industry-battle-australian-energy-utilities-pushing-rooftop-solar-subsidies/

May 22, 2014 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, solar