Is Solar Energy is More Expensive in the USA than in Australia?

Is solar energy to more expensive in Australia than it is in the US? The answer is no. Once you have a solar system installed the cost of producing energy is virtually zero no matter whereabouts on the planet you are. Where the big differences come into play is at the beginning. The cost of buying solar panels and then having them installed is another matter. There are two costs involved in the process that is going to do most of the damage to your bank account. The first one is the cost of getting the permits necessary from government authorities to install the PV system. The other cost which regularly blows out in the US is the cost of the installation.

If you are installing a standard system in the United States, it’s going to cost you close to double to have it up and running on your roof than the same system will in Australia. Most of this extra cost is going to be charged first of all by the companies selling PV systems. And in the final hit to your bank balance will be done by the installing company. Surprisingly, in the US market, it might be cheaper to go and build a utility-scale solar plant than it is to put one on your roof at home.

More profit equals higher costs to somebody.

Experts consider the reason why US installers charge margins up to 65% profit, against around 26% for their Australian counterparts is due to heavy competition in the Australian market. Even with a markup of 26% Australian installers like Eurosolar and Truevaluesolar are doing very nicely thank you. Another factor they say is driving down prices in Australia at the moment is the large utility companies. They pay what is called a “feed-in” tariff for home based solar systems putting excess supply back into the grid. Until this year the feed in tariff was close to what the utility companies charge their customers for power. As of this year, most of these feed-in tariffs have dropped by up to 95% for home suppliers.

The dramatic drop in feed-in tariffs in Australia has meant that people are less inclined to install a solar power system for their homes. To counter this, the energy supply companies have raised the price of electricity for domestic consumption by over 300% in recent years. None of these types of massive fluctuations has occurred in the highly regulated US markets. Another primary cause of the recent drops in the price of installing home solar systems has been advances in technology and manufacturing. Smaller panels are now more efficient than they were even two years ago and they can be manufactured faster and cheaper.

Advances in technology mean lower costs.

Experts in the area are currently stating that with the current technology in panel design and manufacture, prices probably cannot go much lower. Some of these price drops have been truly dramatic, in 2011 to 2012 the price of installing a PV system in Australia decreased by 14%. There have been price drops of up to 80% in four years for some PV systems generating less than 10 kW. This kind of drops has allowed a dramatic increase in the number of systems being installed which means much more work for installers.

The amazing thing about Australian uptake of solar systems is that it is virtually an unsubsidized marketplace. Regardless of that, Australia is still one of the three cheapest places on Earth to buy and install a solar system. Some heavily subsidised countries, like Japan and France, are considerably more expensive still. When you start looking at getting a solar system installed, the installing company will talk about two different types of costs involved, hard costs and soft costs. Hard costs which represent nearly 50% of the total cost are the hardware, labour and the like. Soft costs are things like permits and fees, taxes and the installing company’s profit margins.

In Australia a lot of savings are being made in the soft costs area, the Federal government has regulated some of the taxes and fees away from other authorities and streamlined the system. The dollars involved do not sound revolutionary, but saving nearly 90 days on an approval permit is a significant saving. Statistics suggest the soft costs involved in countries like Italy, Australia and Germany are about 40% minimum and up to 60% cheaper than the same expenses in the United States. Compared to Australia of course, the market in the United States is potentially huge. Australia had about a six-year lead over the United States with its regulations and experience, in 2013 the United States started closing this gap rapidly.

Record installations every year.

2014 to 2015 saw the United States install a record 3300 MW of PV system power. That translates into the US market growing from just over $8 billion a year in 2011 to a whopping $11.5 billion in 2013. On top of that, in 2013 California introduced a subsidy system for PV systems. This forced down the price of PV systems by 15% in that state in the first six months of 2013 alone. Other than subsidies, if US regulators seriously decide to drop the soft costs currently charged solar installation companies and homeowners. They will then seriously push down there now extremely expensive installation costs.

Mostly due to the low installation costs and to the high feed-in tariffs that have been available up until now for Australian homeowners, Australia has the highest per capita uptake of solar PV systems. In mid-2016 approximately one in seven homes in Australia has either solar, wind generators or both. About 16.5% of Australian homes are running some renewable system with 15% being estimated as solar. The nearest rival to 16.5% uptake is Belgium which has a current absorption of just under 5%. One thing, however, should be noted, just because the country has the most solar panels does not mean it produces the most solar power. A lot of the systems installed in Australia have only a small output. Most of these smaller systems are 1.5-5 kW in capacity. A typical air-conditioner can use up to 2 kW to run.

Solar panels and global warming

From the time of Industrial Revolution in the 18th century, fossil fuels came to forefront as the primary source of energy to cater to the ever increasing demand. Petroleum, natural gas and coal constitute the primary fossil fuels. Easy availability of coal closer to the surface of the earth, its ability to be used without any further processing positioned coal as the best candidate for producing electricity, power railroads, steam engines, and even ships. This was followed by the petroleum revolution in the 19th century. Fossil fuels have made significant contributions to the global economy though it is being looked upon as a villain of peace in the 21st century. However, it is also true that enormous amounts of fossil fuels burnt over centuries have created severe impacts on the earth’s atmosphere. In turn, this has compelled global leaders to sit up and take stock. According to Euro Solar Global, they have now found the answer in renewable energy in the form of solar power, and wind power to lead the next round of global energy revolution.
The sun is a huge source of sustainable clean energy without the toxic pollution from fossil fuels impacting global warming. In this article, we examine the various beneficial impact of solar energy on global warming and how this perennial source of energy can influence factors that affect climate change.
Thermal plants are also known as CSP (Concentrating Solar thermal power stations) and PV or Photovoltaic cell based solar power systems constitute two broad categories under solar energy. Environmental impact in both the systems can vary significantly depending on the technology employed. Habitat loss, water use, land use and hazardous material used in manufacturing are among the major areas of concern. Another important factor is the scale ranging from the small rooftop solar panels to larger scale CSP and PV projects.

Land use/habitat loss

For the large scale solar projects, location is a major factor that could influence habitat loss and land degradation. The area of land required would also vary depending on the technology employed, topography and intensity of sun rays. About 4 to 10 acres is the estimated area requirement for a utility scale solar system based on PV cells to generate 1 MW of electrical energy. In the case of CSP, the area requirement can go right up to 16.5 acres for every MW that is produced.
Wind farms have the opportunity to share the land for agricultural use, but solar projects have lesser opportunities in this direction. However, land use concerns can be minimised or eliminated by identifying low-quality locations like abandoned mining sites, Brownfield, existing transmission/transportation corridors, etc. Smaller systems built on rooftops too will have minimal impact on land use.

Water use

The PV based solar cells need no water for generating electrical energy. However, some amount of water is utilised in the manufacturing process of various PV components.
On the other hand, the CSP plants do need water for the purpose of cooling, as with other thermal electricity generating plants. The cooling system employed location of the plant and plant design will determine the quantum of water used. CSP plants using wet-recirculation technology combined with cooling towers draw about 650 gallons water for every megawatt of electricity produced. CSP plants using other cooling technologies do bring more water though the overall water consumption pegs lower in the absence of water lost in the form of steam. Although dry cooling is an option for the CSP plants, it is not a viable solution.
Given that Australia receives the most sunshine in a year, there is vast potential to tap this never ending source of energy for domestic as well as commercial use. Once this happens, scarce water that is used in thermal power production can also find use in other areas like agricultural production. The transition can bring multiple benefits like increased agricultural production, reduced carbon footprint from coal-based power generation and above all, a cleaner environment for the population.

Hazardous material

The process of making solar PV cell includes several hazardous materials, and most of them are used for purifying and cleaning the surface of the semiconductor. These are the same chemicals used by the semiconductor industry and include sulphuric acid, hydrochloric acid, hydrogen fluoride, nitric acid, acetone and trichloroethane. While the quantum and type of chemicals used vary depending on various factors, workers do face certain associated health risks. Disposing of these harmful wastes is, therefore, a concern associated with the proliferation of solar power systems.
Technological advances have also brought into focus thin-film photovoltaic cells that carry more toxic material significantly compared to the traditional PV cells. Thankfully manufacturers enjoy a significant financial incentive in recycling these materials since they are expensive and some of them even rare. Any residual waste needs careful handling in the interest of public health and environmental concerns.

Global Warming Emission and how solar energy reduces greenhouse gases

Although global warming emission is absent in the production of solar energy, other stages involved in the life-cycle of solar systems including transportation of materials, manufacturing, maintenance, installation and decommissioning does require a certain amount of emissions. However, most of these emissions are in the range of 0.07 to 0.18 pound of CO2 equivalent for every kW of power produced. In the case of CSP, this range moves to 0.08 to 0.2 pounds. In both instances, these emissions are significantly lower compared to 0.6 to 2 pounds per kWh in the case of gas-based electricity production and 1.4 to 3.6 pounds per kWh in the event of coal-based power production.

How do solar panels reduce greenhouse gases

Solar energy produced with the help of solar panels significantly contributes to the reduction of greenhouse gases in our atmosphere. The cause of climate change is greenhouse gases, and when we overload the environment with these emissions, they, in turn, cause a steady rise in the earth’s temperature. The consequences are not limited to climate change alone, but also impact our health adversely.
The continuing supply of raw material (sun rays) free of cost, and the clean energy derived from the sun make a strong case for further proliferation of solar systems around the globe. Every individual and business can make stellar contributions towards reducing global warming and thereby help the cause of climate change by adopting solar energy as the primary source of all energy needs.