Solar prices still sky-high

As far as AP&P is aware, there isn’t a single smash repairer in Australia with a solar power system installed. Price has undoubtedly been the biggest stumbling block.
The state and federal governments have not been making life any easier, chopping and changing minds and policies, subsidies and feed-in tariffs. This makes evaluating how long it would take to recoup your initial outlay downright tricky.
Things in the US seem sunnier in some states. In Ohio, Herb’s Body Shop fitted a huge 48.3KW system in 2010, the first solar project in that state for a body shop. The cost of $293,000 was greatly reduced though grants from the state and federal governments which meant a payback of just three to four years. Owner Herb Graham Jnr. said: “It’s easy to go green when you get this kind of assistance from the government.” It’s difficult to disagree.
The winner of the AP&P DuPont Sustainability Award 2010, Rosenthal Automotive, who built its workshop from scratch, looked into fitting solar panels. Co-owner Jim Rosenthal told us: “We had an estimate done through our builder who worked with our consulting engineer TMK. It did power usage estimates and calculated the size required to power our whole dealership and carwash development.
“I made enquiries about government subsidies through our local federal MP Patrick Secker, who asked the question in parliament as to why businesses do not receive the subsidy percentage like private households. The answer was, the government has no policy regarding business subsidy on solar power generation.
“We calculated that there would be a 15 year break-even, and it was too expensive for our development.”
While tariffs and subsidy policies might change, what does remain a constant is that electricity prices are being hiked up by double digit percentages and predicted to continue in the same fashion for the foreseeable future, while the cost of solar technology is coming down.
We asked Australian Energy Matters, who specialise in commercial solar installations, to quote for a solar system for Blackburn Motor Body in Victoria.

Blackburn Motor body

This following is a ball-park figure arrived at by assumptions and without a site survey. Different solar companies will use different criteria to arrive at a final figure. REC stands for renewable energy certificates which you are created when your  solar system installation is complete and the details registered with the federal government body. ORER Solar companies are able to trade these certificates to offset the cost of installation.
In order to work out the payback period for the quoted system, Energy Matters looked at Backburn Motor Body’s last quarter’s electricity bill. The company had to assume that the bill:
Provided a good average
That 80 per cent of power consumption occurs during daylight hours
An average of four sun hours a day for Victoria
That eight per cent of electricity losses were through the system (cables, inverters, etc)
The workshop was open for 25 days a month.
This payback period is also calculated on today's energy prices – when costs rise, the payback comes sooner. Because there are different feed-in tariffs for systems smaller and larger than 5kw in Victoria, the company prepared the above two quotes. One is for a 5kw system which would offset some energy costs, and one for a 12KW system that would provide the majority of all the power Blackburn Motor Body needs. If the solar feed-in tariff was expanded to incorporate larger systems in the future and the terms were attractive enough, Blackburn Motor Body could buy more panels to add to the existing system.
 
Payback calculation
Total consumption = 1622 kilowatt hours (kwh)
1622 divided by 25 days = 64.88kwh consumed per day
80 per cent of this = 51.9kwh consumed during daylight hours
Divided by 4.2 sun hours per day = 12.976kw system.
Pay-back period = approximately 12 years
If a workshop were to produce more energy through its solar system than it consumes in states without a feed-in tariff for larger systems, it will effectively be providing the grid with free electricity (although in Victoria a one-to-one feed in-tariff applies for systems up to 100kW).

Does the cost eclipse the benefit?

The bad news for this particular quote is that a 12-year payback period is too long for most workshops. However green power policies are in constant flux and conditions may be more favourable for Blackburn Motor Body in the future.
As each state has different, with feed-in tariffs and subsidies AP&P will be looking at quotes for panel shops in each state and reporting on these in future issues. We will also be keeping a keen eye on the proposed carbon tax and evaluating what effect this will have on the financial viability of going solar.