TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH SOLAR SHOP AUSTRALIA, MANAGING DIRECTOR, ADRIAN FERRARETTOClive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me to discuss the role of solar power in the Government’s Renewable Energy Target is Adrian Ferraretto, Managing Director, Solar Shop Australia.Adrian welcome to FNN, the Senate recently passed the Renewable Energy Target Bill which includes the Solar Credit Scheme, how will this work?Adrian Ferraretto: Well the Renewable Energy Target Bill is legislation that requires energy wholesalers to produce twenty percent of their energy from renewable sources like solar and wind and hydro or new hydro by the year 2020, so twenty percent of their energy by 2020 has to be from renewable sources. The way they prove that their energy is from renewable sources is by surrendering to the Office of the Renewable Energy Regulator, renewable energy certificates. When you install a solar system on your house, you can generate renewable energy certificates under the Solar Credit Scheme, then you can sell them to one of these energy wholesalers through your solar retailer, which can then surrender under the legislation to the Office of the Renewable Energy Regulator. And so when you sell one of these credits you roughly get something like, you know, forty or fifty dollars for it and your system may generate a hundred and fifty of these credits - so it could be valued at around seven thousand dollars or eight thousand dollars for a solar system.
Clive Tompkins: So can you put a dollar value on the contribution someone will get from this scheme?
Adrian Ferraretto: The seven thousand dollars is an upfront discount which you get on your solar system when you first install it. But thereafter when your solar system produces electricity some States in Australia pay a premium for that electricity which is exported into the grid. So for example, in New South Wales when you buy electricity, you pay around twelve or thirteen cents a unit for your electricity, but when you sell electricity, in some States you can get paid sixty cents a unit or fifty cents a unit. So you get the upfront rebate from the renewable energy certificates plus you’re getting an ongoing feed in tariff and most of these schemes are in place for fifteen or twenty years. So you should pay your system off fairly quickly, like usually less than ten years.
Clive Tompkins: So how much does a typical solar system cost?
Adrian Ferraretto: The average house in Australia needs around a 3.5 kilowatt solar system and the rebate’s structured around a 1.5 kilowatt solar system. But the average house in Australia uses around seven times more energy than the average house on earth. One and a half kilowatt system, before a rebate costs around thirteen or fourteen thousand dollars, so after a rebate or after the Solar Credit Scheme, it costs around - between six and eight thousand dollars depending on the technology and the brand of the solar panels which you go for.
Clive Tompkins: It used to be the case that solar was synonymous with solar hot water systems. Are they still around, does anyone purchase them anymore?
Adrian Ferraretto: Yes solar hot water systems are solar thermal as opposed to solar electricity systems which are solar photovoltaic. So solar thermal like the name says, it absorbs heat and that heat then goes into the water which gets stored in the tank which you then use for your showers or whatever – which is a very simple thing to understand for most people. Whereas photovoltaic’s you know, has sunlight heating as opposed to heat which you know dislodges - say the photon dislodges an electron and that creates the flow of electricity which then powers the appliances in your house when the sun is shining. You really need both. It’s more cost effective to have the solar thermal for your thermal needs and solar photovoltaic for your electricity or your electron needs, being things like – you know, your solar thermals of course best for your hot water, then solar photovoltaic good for your TV, air conditioning, fridge and microwave and computers and so on. So a combination of both is good. Solar thermal is still very, very popular here in Australia.
Clive Tompkins: Adrian, I believe there is the assistance in the form of green loans to help with the purchase. Can you tell us about this?
Adrian Ferraretto: Yeah sure. Green Loans is a Federal Government scheme when you get an independent assessor to come to your home to show you how you can save energy in the home. And then you can get a green loan from the Government to help buy whatever, you know, suggestions that this independent assessor has come up with and one of those suggestions could be solar panels for example, or solar hot water or insulation or a rainwater tank or energy saving light globes or whatever. And then that’s an interest free loan for a period of five years – yeah, so that’s available for solar photovoltaic panels as well as having pre-paids and feed in tariffs. So there’s a lot of help out there for people to go green right now.
Clive Tompkins: Other than price what should consumers be looking for in a system?
Adrian Ferraretto: Well solar electricity panels have got very, very nice guarantees on them, like twenty-five years. So you want to make sure that the manufacturers of the solar panels are going to be around for twenty-five years to support their products. So my advice I suppose usually to consumers is to go for a tier one brand or a brand which you can trust. There are brands like Sharp and Sanyo, Kaneka and BP and those types of brands. Stick with the tier one brands, you know those guys will be around for the next twenty-five years.
Clive Tompkins: Are solar power systems star rated?
Adrian Ferraretto: Solar panels don’t have star ratings on them, so you really have to trust the brand and the provider of the solar system because not all solar panels are created equal. We’ve seen discrepancies of near twenty-five to thirty percent from, you know, from panel A to panel B on exactly the same roof. Different technologies have different rates of light absorption and different behaviours under certain temperature conditions. A good solar installer can, I suppose, simulate a system over a twelve month period to demonstrate exactly every month per year, every hour of the day what the system should be producing.
Clive Tompkins: Last question. How long does it take to install the solar power system?
Adrian Ferraretto: It takes a long time for the process before the actual day of installation. The day of installation is usually half a day - you know it’s three or four hours to install a solar system. But before you actually get onto the roof and start installing the system, you need to get permission from your electricity retailer, from the electricity utility - the people that own the poles and wires. You need to get rebates organised and approved - Council approval in some instances – so the actual installation is the easy part, it’s all of those approvals beforehand which, you know, again a good solid company will do for you.
Clive Tompkins: Adrian Ferraretto, thank you for giving us a better understanding of solar power systems.
Adrian Ferraretto: Thanks very much Clive.
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