Reaching for high fruit in domestic solar generation

IN THE summer of my Year 10, 11 and 12, I worked cherry-picking during the two frenetic weeks when the fruit ripened in the Beechworth orchards. It was low-paid, hard work and the horticulture was not well-advanced. The trees were allowed to grow too high.

After taking all the low-hanging fruit and imagining a swelling account at the State Savings Bank of Victoria, we were then ordered to pick every last cherry on each tree before moving to the next.

We balanced on rusting step-ladders that, these days, would make a personal-injury lawyer salivate.

So, ironically, the metaphor “cherry-picking” did not apply to real cherry-picking even if the metaphor about low-hanging fruit did.

These thoughts flashed through my mind as I noticed that our solar-power meter is about to tick over to 20,000 kilowatt hours.

That amounts to 20 tonnes of carbon that would otherwise have gone into the atmosphere.

It amounts to saving more than $4000 in electricity bills – and we sell our excess without any government subsidy, just the miserable 7 cents a kilowatt hour that most governments outside the ACT pay. Nearly all the electricity we generate we use ourselves.

The big trouble is that we are the low-hanging fruit of the domestic solar market. The four or five main characteristics of that fruit are: a detached house; a house that is owned not rented; people with relatively high income or wealth; people with enough knowledge and understanding to realise that putting up solar panels is a very good tax-free long-term investment; and people with a moral sense that we have to do something about climate change.

The first swag of solar panellists in Australia were in that group and nearly all of them have put up their panels.

From now on the fruit is a bit higher up. People who own units have barriers: the roof space might not be big enough. The body corporate might have to arrange some sort of collective solar arrangement.

Nonetheless, the roof space is there and solar panels would be a sound investment. It might need some changes to strata law to make it easier.

But it is achievable It is just the equivalent of getting on the step-ladder in the cherry orchard.

Then there is some fruit out of reach of the step-ladder, and you have to climb into the branches. These are the renters, especially those renting units. This is very difficult fruit to pick.

There is no incentive for renters to install panels because they cannot take the panels with them and tenancies are often too short-term to get the returns on the capital outlay.

Nor is there any incentive for landlords to install panels because landlords are not paying for the electricity and so get no return.

It is going to take some major changes to pick these cherries and you know how we all hate change. But the change is becoming more important as home ownership has fallen below 60 percent and is likely to continue falling.

To create the incentive, we will have to change tenancy law and make landlords responsible for providing tenants with a livable electricity amount – not in dollars worth of electricity but in a set amount of kilowatt hours depending on the size of the dwelling. The tenant would pay for any excess (at the premium rate that electricity companies charge for electricity over a certain amount if all the solar-generated power has been used).

So now we have an incentive for landlords to install solar panels and for tenants to be frugal with power use.

It is not such a radical idea. Under present tenancy law, landlords often provide a base water amount and the tenants pay the excess. Landlords also have to provide a range of other things, so why not some electricity?

There would have to be some initial rent adjustments, maybe using the bond to reduce rental stress.

Obviously, the property and real-estate industry would find a hundred scare-campaign reasons to oppose this. But at present the domestic solar-electricity industry is heading for a state of dysfunctional equilibrium: where major players want to keep the present system (equilibrium) even though in the long term it spells disaster and change would benefit society as a whole.

Enter government. The Federal Government has now followed the Victorian Government’s lead and joined Energy to the Environment portfolio – severing it from Resources.

True, Australia’s new Minister for Energy and Environment is Josh Frydenberg, who in the past has been nick-named “Mr Coal”. Nonetheless, he will now be exposed more to arguments about the environmental threat posed by coal which should rebalance his energy predilections away from it and towards renewables.

After all, even Agriculture Minister Barnaby Joyce has changed his mind about wind energy.

It is now not a question of whether the climate is changing or whether humans are causing it. The climate has in fact already changed. The question is what are humans going to do to stop it changing more and what are humans going to do to reverse it.

So as part of a Federal-State package to require landlords to supply electricity to tenants, the Federal Government could offer accelerated depreciation on the installation of solar panels. And Labor could exempt the depreciation of the cost of solar panel installation from its negative-gearing restrictions.

The ramping up of domestic solar (and even wind) power generation will acquire greater urgency with increasing international pressure on Australia over carbon emissions.

Solar should become more efficient as battery technology improves to permit storage and use of solar energy at night.

Domestic solar generation and storage will assume even greater importance as more international car-makers produce cheaper electric cars that attract Australian buyers. If the electricity those cars use comes from coal-fired power stations rather than battery-stored solar power, the electrification of Australia’s vehicle fleet would be environmentally self-defeating when it should be and environmental and cost-saving bonus.

And while we are on the subject of domestic amelioration of climate change, maybe we should insist that the roofs of all new buildings and cars be white. They have to be some colour, so why not heat-reflecting white?
CRISPIN HULL
This article first appeared in The Canberra Times and other Fairfax Media on 23 July 2016.