It has been estimated that the use of solar panels in homes and businesses in West Australia will increase tenfold over the next 10 years however the government is not quite ready for it.
The increase in solar has been growing steadfastly at a rate of nearly 20% per year while the price of solar panels has dropped. According to University of Western Australia’s Professor Bill Grace, the cost of solar per unit has dropped significantly and will likely continue to go down.
Increase in solar energy has brought costs down for consumers
He added, “Big cost-reduction pressures are coming because countries like Germany, the US, and China all have policies to increase solar.
“Then of course you have people who want to reduce their own greenhouse emissions.”
The increase in solar energy demand started when the government began offering substantial feed-in tariffs to peddle power back to the network.
The move caused Western Power a major fall in revenue which they badly needed in order to maintain their powerlines and poles, and also triggered a surplus of electricity. From then on the Government has since lowered the tariff.
Government tariffs for increase in solar cause Western Power to lose out on revenue
The significant increase of solar energy feeding had upset the electricity market which relies heavily on fossil fuels including gas and coal.
Due to the isolated nature of Western Australia’s market, they hold excess generation capacity to prevent blackouts.
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According to Professor Grace, WA was not prepared for the response of the public to the policy. He said that it now faces a great challenge in modernising the WA market so that they can effectively deal with the solar increase.
To this point, solar panels are mostly seen resting on home’s rooftops and only a few businesses have them installed. But it is only a matter of time until more and more people and businesses will adopt.
Energy Minister Mike Nahan believes that change is necessary but it would not be easy. He said that it is inevitable however it’s important that they plan accordingly.
He says that there are a lot of big challenges ahead especially on the aspect of investing and fixing the grid.
He adds, “We’re just coming to grips with it, it isn’t just solar but if it comes in tandem with batteries, that’s going to be a real game changer.”
Sustainable energy expert Willis says WA Government needs to step back
According to sustainable energy expert Ray Willis, with the increase in solar the WA government needs to step out of the market. He believes that the government simply cannot continue to hold up companies such as Western Power and not create an impact on the prices of power.
“With the increase in solar, if the Government continues to sell electricity the same way it does now in two and five years’ time, the market simply won’t be delivering them enough on its investment and it will start to cost taxpayers.”
Currently, a review is being made to evaluate the electricity market. Energy Minister Nahan will be receiving the recommendations of the review board before the holidays.