SA's free solar not what it seems

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It sounded like the ultimate election sweetener. Six weeks out from polling day, South Australian Labor Premier Jay Weatherill announced a plan to install free solar and Tesla batteries on 50,000 homes.

Elon MuskExcept it's not quite that simple. Seduced by the chance to publish more clickbait about billionaire Tesla chief Elon Musk, the media misrepresented the details: the panels aren't really free, most of the funding won't come from government, it's mainly for social housing, and it'll have bugger all effect on who gets elected anyway.

What the media did get right was swooning over the sheer scale of the thing. It really is gigantic. If completed in full with 50,000 homes, the virtual power plant will be 50 times larger than its closest rival, AGL's proposal for 1000 connected household batteries in Adelaide.

So what is a virtual power plant? In this case, it's essentially a massive solar farm and battery, but it's spread across tens of thousands of homes instead of in the one location. Each home would be installed with a 5 kW solar system and a 13.5 kWh Powerwall 2 Tesla battery. Combined with smart meter technology and a computer system to control the storage, use and transfer of power, this network could provide 250 megawatts of generation capacity.

Ah, but here's the catch — Tesla and a yet-to-be-appointed electricity retailer would own the power and sell it back to the household at a discounted rate. As the ABC explained: 'In effect, the householder is simply leasing Tesla and another power company some spare roof space and garage space in return for a discount on their power bills.'

Sounds less appealing? Not at all! This is actually fantastic, because it opens up the benefits of solar and batteries to households that couldn't otherwise afford the upfront costs. That's why half of the homes to get the solar and batteries will be Housing Trust properties owned by the South Australian government.

Rather than viewing this scheme as some kind of election giveaway, it's more accurate to see it as pitch for 'energy fairness'. It echoes other social equity clean energy projects, like Victoria's Solar Savers, which provides pensioners with 'free' solar panels to be paid off over time through council rates.

 

"Whichever party wins the state election on 17 March could claim a mandate for its energy plan. But the reality is the result might have nothing to do with any of these efforts to woo voters."

 

Where does the money come from, you might ask? Here's another misconception to address. The South Australian government is assisting with a $2 million grant and a $30 million loan, but the vast majority of funding will come from private investment. It looks like Tesla and the energy retailer would pay for the assets and installation, then recoup the costs by selling the power generated to the household.

Frontier Economics has calculated the electricity will cost about 27 cents a kilowatt hour, which they estimate is 30 per cent less than the current average residential retail rate in South Australia of 40 cents. In other words, it's viable partly because the electricity price in SA is so high.

(South Australia has always had higher and more volatile power prices, by the way, even before renewables. In fact the historically high prices are partly what attracted so much wind farm investment to South Australia in the first place.)

There are signs Weatherill's clean energy innovation is popular with voters. This month, a ReachTEL poll found about 60 per cent of South Australians were proud of the state's leadership on renewable energy. While the Liberals in other states are following the federal government's anti-renewables line, the South Australian Liberal Opposition leader has announced a $100 million fund for 40,000 households to add battery storage to their solar panels.

Whichever party wins the state election on 17 March could claim a mandate for its energy plan. But the reality is the result might have nothing to do with any of these efforts to woo voters because there are so many outside variables.

One big variable is the redistribution of electoral boundaries. In some previous South Australian elections, a party has won the majority of the popular vote but not the majority of seats, and thus failed to win power. This has historically favoured Labor.

To correct this, the South Australian Electoral Districts Boundaries Commission has a 'fairness' criterion, which is unique in Australia. It redistributes the boundaries so that 'if candidates of a particular group attract more than 50 percent of the popular vote, including preferences, they will be elected in sufficient numbers to enable a government to be formed'.

ABC election analyst Antony Green explains that the new electoral boundaries will punish Labor. 'In theory if there is no swing and little change in voting patterns, then the Liberal Party will win the election.' Labor is the incumbent, but it actually has to gain seats to retain government. It needs a uniform swing of more than three per cent to stay in power.

Then there's the Nick Xenophon factor. A December Newspoll found his SA Best party is more popular with voters than either Labor or Liberal. With candidates for at least 24 electorates, SA Best is a huge wild card, and its preference flows could decide the next premier. Xenophon could end up negotiating a powerful role for himself in a minority government.

So there we have it. Free solar and batteries aren't really free. Election policies may not be as important as electoral boundaries. And an anti-establishment politician could be part of the next political establishment.

Welcome to South Australia, where nothing is quite as it seems.

 

 

Greg Foyster headshotGreg Foyster is a Melbourne writer and the author of the book Changing Gears.

Topic tags: Greg Foyster, Jay Weatherill, Elon Musk, Tesla, solar


 

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Existing comments

I am wondering what effect this will have on building regulations. As I understand it, if I put solar panels on my roof and you erect a neighbouring building that casts shade over my panels, I have little redress. However, if a corporation owns the panels, and shade causes loss of revenue, will the regulations alter to allow that corporation redress for loss of income?
Janet | 16 February 2018


great job mate, my state is very silly indeed not what it seems as liberals won... whats your prediction?
liam | 19 March 2018


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