New South Wales is seeking to boost the uptake of solar by the state’s low-income households, with the launch of a $15 million initiative that offers to install free rooftop PV in the place of a cost of living rebate.
The trial scheme, announced late last month, targets families receiving the government’s Low Income Household Rebate – a modest $285 a year (78c a day) energy bill deduction.
It will offer up to 3,400 eligible households the option to forgo that payment in exchange for 2.5kW of rooftop solar – a small system compared the the average size being installed today, but which will nonetheless deliver much improved power savings over the rebate.
“The bill savings from the rooftop solar trial are expected to be close to double the value of existing rebate savings with an average bill reduction of $600 per household per year,” said acting secretary of the Department of Planning and Environment, Dr Liz Develin.
“This means that households who choose to participate in the program could be around $300 better off each year.”
The “entirely voluntary” trial will be rolled out in five regions, including Sydney’s South, Central Coast and North Coast, and Illawarra’s Shoalhaven and South Coast.
“We know energy bills are placing pressure on low-income consumers, so we must ensure that we are doing everything we can to offer support for struggling households,” Devlin said.
The move is undoubtedly a positive one, in a state with a patchy record on rooftop solar.
As the latest report card from the Climate Council revealed, NSW lags well behind its northern neighbour, Queensland, on rooftop solar uptake, coming in at fourth place out of all the states and territories with PV on just 18 per cent of households.
On top of not having a renewable energy target, nor any real plan to replace its ageing coal power stations, the state recently slashed its rooftop solar tariff almost by half, setting the benchmark at between 6.9-8.4c/kWh for the period of 2018/19, down from 11.9-15c/kWh.
As we reported here, the 44 per cent reduction in the price retailers are recommended to pay for rooftop PV exports was seen as controversial, and interpreted by some as a perverse penalty on NSW solar households for their role in helping to bring power prices down.
Others, including the NSW Greens and consumer group Solar Citizens, blamed the NSW government for the tariff cut, describing it as a direct result of its failure to instruct IPART to assess the true value of solar power.
“Unless the NSW government steps in then this decision will be a huge hit to the electricity bills of over 400,000 households and businesses that have installed solar panels in NSW and will act as a disincentive to further uptake of solar panels,” said NSW Greens MP Tamara Smith, at the time.
“Solar power is working to even out demand peaks and reduce electricity prices. Households and businesses should be rewarded for this service, not penalised for the benefit of big coal.”
Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
This post was published on October 19, 2018 11:43 am
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Those low-income households are likely to be living in very leaky houses. With heating/cooling and water heating being the big energy guzzlers, I suspect that fixing the leaks, and installing heat pump water heating, timed to operate in the middle of the day, would do more to keep the battery comfortable than 2.5 kW of panels.
In any case, increasing housing energy efficiency should always be the first step.
I agree, just give them both. But ditch the hot water H/P and give them E.T.SHW.
Agreed on the likelihood that these houses need to be reinsulated / air-sealed.
Re-insulated ?
Most are only insulated on the roof, not on the walls as it is expected that heat will escape thru the roof.. most of the low income houses do not leak as it is in breach of their tenancy agreements to not have repairs done ASAP.
In a country that has such hot summers with lots of radiant heat that reflects heat upward from the ground, anything that will contribute to a cooler home inside, has to be a plus.!
Won't the vast majority of the 'up to 3,400 eligible households' be rentals? What happens when the tenants are forced out by increasing rents? $15m divided by 3,400 homes is about $4,400 per home. Isn't this enough for larger than 2.5 kW PV systems?
It's more than enough to fix the draughts, insulate the ceiling, put up some awnings over west facing windows. That would do more to cut power costs than most other actions, with less resistance from landlords.
yes, If you shop around you can find 6.5kW systems for that money.
Indeed, Jo. :-)
Caveat Emptor with a 6.5kw system at that price, all that glitters ain't GOLD.
The 'cheapie' ads are in my weekend newspapers again...6.6kW systems for $4,000!
It will be people who own their own home- pensioners
If the areas chosen are marginal seats then that will just be an amazing coincidence.
Why is this offer limited to up to 3,400 households and why is the PV system limited to 2.5kW? Seems the NSW Govt. is just making a token gesture here as it plays a sort of catchings up with the other States. I note the mention of FiT's in Sophie's article. Despite IPART one can shop around for a higher FiT. Not sure how much household exporting will happened with a relatively small size PV system of 2.5kW but the last time I checked Energy Australia is still paying a FiT of 12.5cents kWh. I am collecting a FiT of 20cents kWh under AGL's Solar Savers Plan.
We live off-grid with a 2.25kw of solar. In theory you could be almost bill free with 2.5kw. FiTs are a joke. Load shift everything possible in your house to daytime to save the most.
I installed solar panels 3 years ago and was getting 68cents. Now I am paid 60 cents in Victoria cost to install 5kw system under $5000 with on other incentive brought my power bill to $300 every 3 months very happy
Same here, Joe, and I'm earning about $1,200 pa from my 7kW PV system. 2.5 kWis far too little and far to expensive at that price! :-(
Yes, it's token.
I have been advocating for quite a while that any scheme which "subsidies" energy costs is like burning money, it absolutely does nothing and is such a poor investment by government it comes into the category of embezzlement. If governments want to seriously "help" reduce energy costs the "only" way is to put the money into efficiency, either making the buildings people live in more thermally efficient or improving the efficiency of appliances including hot water.
Time and time again it is shown that efficiency delivers significant and highest returns on investment. As a byproduct peak electricity demand is reduced. As another summer approaches and BOM has indicated could be a very hot one, citizens needing income assistance will mostly not be living in safe thermally efficient homes.
Solar PV is the 3rd best option in my view, while important, needs to be seen as secondary to improving efficiency.
Ray,
while energy efficiency is undoubtly very important and generally gives the best results, there are two issues here that make the solar panels the (better) option:
- the savings will show up directly on the customers electricity bill - in a climate where "affordable power" is king right, left and center this is what wins elections
- an energy efficiency (deep) retrofit of the dwelling will cost far more than the solar system. 4,400$ (sounds **very** expensive to me - especially for that number of systems!!) will not usually cover a serious retrofit, just a few measures like Hettie mentioned. Afterwards you get reports along the lines "but they did not do this or that, couldn´t be bothered". Better go for an isolated measure, good to see& check.
- limited funds
- property ownership issues: a (deep) retrofit would entail the cooperation of the landlord and would ultimately benefit him/her/it via higher value for the dwelling
Hit the nail right on the head there Mac. There is a hell of a lot in achieving energy efficiency, choice of appliances is only but one of them.
Yes under stand all the issues but to have a solar PV installation incentive in isolation to a package (which includes PV) of efficiency measures is a wasted opportunity.
Reinvesting the "savings" back then into efficiency multiplies the investment and the users win, and the NEM generators miss out.
Using public money to subsidize energy alone should have also a public benefit and the benefit should be as large as possible. While tempting to the political parties to pork barrel we should be demanding a better outcomes for all 'our' money spent.
One major problem Australia has is the large number of dwellings which become "uninhabitable" and dangerous without air conditioning in summer. Just plonking a PV system on the roof is an incomplete solution to protecting citizens from excessive heat in their homes and massive energy bills.
In view of the limited funds mobilised here, the solution chosen might be the best bang for buck - in the sense of the most people getting a share of the investment/ benefiting from the investment.
As I mentioned before, full retrofits for an inhabitable dwelling cost far more than the amount invested here per house.
Question should also be if it still makes economic sense to do anything on the respective dwellings you mention or if a full rebuild - to current standards - would be more worthwhile.
As for full retrofits, the Dutch are onto something with their "Energiesprong" initiative. There are a few videos on that around. Might be an idea to take that idea and adapt it for Australia...
Well, folks, at least this is one of the three elements to lower household energy costs. Zero cost change in energy usage habits, solar PV and home energy efficiency renos. :-)
Fine, but this is totally tiny. Insignificant basically.
I'm wondering what would happen should a customer effectively reneges on the contract? What is stopping the customer who installs the solar moving out six months after the install? Or what is stopping them from simply transferring the account name into another person's name?
I'm also unsure as to how many people this would realistically be viable for, given that if you're on Low Income rebate, are you likely to own the property? And then even if you own it, is it even a property that is constructionally [not a word, I know] viable?
Interesting questions. I have some in return. What possible benefit could there be to a customer of the scheme in reneging? I do not understand why such a thing could happen. And if a beneficiary of the plan chose to move from the property, say, for family reasons, or because of declining health, or for a job opportunity, how would you see them gaining from abandoning the solar installation?
There are many, many people of my generation who were able to buy our modest first homes in our 20s, progressively upgrade, and own outright by retirement age. Some of us made unwise investments. HIH and Storm devastated the life savings of some, the GFC destroyed the share portfolios of others. So there is a sizable cohort of older Australians who do own our own homes but are entirely, or largely dependent on the age pension and eligible for the scheme.
However, the cost of solar systems has fallen so much in recent years that even some of us have been able to go solar independently.
I, therefore, tend to think that it will be renters who are the likely beneficiaries of this plan. And that is a worry, because properties available to low-income renters are often of very poor quality, and without specific safeguards, I can see landlords queing to get tenants to apply, then kicking them out and putting the rent up as soon as the system is installed.
Is that what you are worried about?
Frankly, the whole scheme seems half-arsed. Piddling system size, no provision to improve dwelling energy efficiency, and loss of low income energy rebate. Though $25/month is not a big deal.
I think we need a great deal more information about this plan. As things stand, it could well be another of Gladys' fiascos.
It's not reneging in a sense. For example, a husband and wife duo are likely to both be concession card holders. Example scenario is wife commissions install in her name, and six months after install, account changes into husbands name. Husband gets the rebate. A solar installation could also reasonably be assumed to increase the value of a house, even if by a slight amount. You've effectively increased the value of your property for free on the government's dime.
'I can see landlords queing to get tenants to apply, then kicking them out and putting the rent up as soon as the system is installed'
And how would that work? The tenant would have to apply, which even if the tenant would have to fork out zero dollars out of pocket, would have to complete far too much paperwork, for a property they do not own, and may not live in six months from today due to reasons organically arising.
I'm not trying to poo-poo the scheme, it does sound great, on the surface, but in practice, if I can poke holes in it, I'm sure someone a whole lot smarter can poke chasms in it.
I think there would have to be caveats, like only public housing, applicant owning the home. If a private rental, landlord would have to sign a binding agreement that they would not turf tenants out for 6yrs or pay a penalty. If tenants left of their own accord the landlord and the tenant would pay equally on a pro rated basis the remaining value of the system.
That's a quick stab at the problem.
Sounds like a plan, but the whole proposal is full of holes. Far more bang for the buck in improving energy efficiency, and only adding solar to homes that don't leak.
And as you say, nowhere near enough households to address the real need.
But as I said Het, tackle the problem on the two fronts yeah. I haven't spent any time really thinking about this and I want you to know that you are right and so is Mac and yeah 2.5kw isn't enough. However the idea shouldn't wither on the vine because it is a bit difficult. Let's fill the holes and find a solution.
Having said that education of dwellers as to solutions is important and I've helped a lot of pensioners make the most of their solar, with bill reductions of 30% and more from biz as usual. One customer of mine, Betty, (82yrs) already had a SHW that she hardly ever boosted as she lived alone was dead set scared of using power in summer or winter. Her daughter called me and I went over to quote a 1.5kw system, that was all she needed, as she only averaged 6kw/day. She has one a/c but now isn't scared to turn it on now. In winter she pre warms the house and switches it off close to sundown, plus uses a hot water bottle and a blanket at night when watching TV. I could go on about summer, but I'm sure you get the picture. Betty, now is in credit most of the year and loves me for my tips.
The thing is the WW2 generation were brought up in the depression and had to make do. I, being a skin flint rekindled her memories of saving a penny, but with a twist of how her solar investment could allow her to use the a/c without fear of high bills.
In ending, some people's homes aren't too bad when it comes to the issues you have mentioned, while some or shite, never the less an a/c powered buy PV can make a huge difference to a power bill even if the house is a bad performer.
You wouldn't allow landlords to claim unless tenants were living there for at least 3 months.
I know a lot of thinking will have to go into this in relation to private rentals, less so for pensioners who own the property. It's part of my socialist principals that the least well off must be looked after. I'm sure Gladdie is using this as a vote getter, but perhaps Labor and the Greens can come up with something workable.