Page 2004 - Week 06 - Wednesday, 25 June 2008
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I would like to congratulate my federal colleague Greg Hunt, who has introduced this week his Save Our Solar (Solar Rebate Protection) Bill, and I hope we will see a turnaround from that proposal. He seems very confident that the Rudd government will see the light and see what damage they have done to not only our reputation but the men and women on the ground who are trying to make a living and make a real difference, and that we will see some movement on the means test.
Let us look at the bill as it stands. The bill creates a new scheme for buying electricity produced by small-scale renewable energy facilities. The present arrangement is that people who sell into the grid do so at the wholesale rate of 7.4c a kilowatt hour. The proposed new scheme would require an electricity distribution company—ActewAGL—to purchase the gross energy produced by a small-scale renewable energy facility at 3.88 times the retail value, which is currently 12.1c a kilowatt hour or 48c a kilowatt hour rounded up. The customer can buy all of their electricity back from ActewAGL or any other distribution agent at the retail rate. Therefore, if the small-scale renewable energy producer produced exactly the same amount of electricity as he consumed, the electricity distribution company would effectively pay the producer 2.88 times the retail cost of the electricity and not receive any net electricity.
The stated aim of the policy is to make renewable energy, principally solar energy, more attractive by reducing the payback period for the substantial capital outlay required to install, especially, solar rays and thereby reduce greenhouse gas emissions. If I put a PV ray on my house, an average one, it would produce about 1½ megawatt hours a year, so on average mitigation under this scheme would cost the community—not necessarily taxpayers, but everyone else who buys electricity—about $720 to subsidise me.
If you compare that with the performance of low-energy hot water systems and the efficient insulation in my ceiling, each of these initiatives mitigate about two megawatt hours a year and each of them would save me and the community about $520 a year. What I am trying to say is that, although it is laudable, as Dr Foskey has already said, this is a very inefficient means of mitigating greenhouse gas emissions. It basically works out at something like—it is pretty simple actually—one tonne of CO2 is one megawatt hour of electricity and one megawatt hour of electricity produced in this way would cost the community $488. That is $488 a tonne to mitigate per tonne of CO2. It is very inefficient.
While it is laudable and I commend Mr Gentleman for his initiative, there is much more that we should be doing as a community. We should be addressing our 20, 30 or 40 per cent above national average consumption of electricity because, as the outgoing head of ActewAGL has said to me often—and I am sure he has said it to plenty of other people—the energy you save is the cheapest energy that you can have.
There is very much that we can do to save energy and cut our energy consumption, thereby reducing our greenhouse gas emissions, and at a much lower price. Not only is the outlay much lower; substantial savings can be made by this. As I have pointed out, insulating my house will probably save me about $500 a year in power bills, and that would be a much more efficient way of doing it. It gives you a payback for your insulation of about 2½ years.
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