Solar leasing – another great use of the integrated grid

Solar power

The recent announcement of a solar leasing offer in the energy market by US solar giant Sun Edison is providing another option for customers to take up new energy technologies made possible by the integrated electricity network.

The news was welcomed by the Energy Networks Association (ENA), with CEO John Bradley saying the solar market in Australia was among the most competitive in the world, and electricity networks are encouring more consumer choice and the economic use of new technology.

Mr Bradley said it is important consumers carefully assess the costs and benefits of the proposal, which effectively includes a finance product to recover the cost of the solar installation over an extended period.

“There have been reports that a solar lease, at 14c/kWh, will be ‘half the cost’ of the grid electricity service but customers should be aware this is not an ‘apples for apples’ comparison,” he said.

“The solar leasing service will continue to rely on a connection to the grid to maximise the value to the customer – so its costs are really comparable to the wholesale and retail charges which would be lower than 14c/KWh in most states other than Western Australia.”

Mr Bradley said trends in technology and business innovation will make the grid a vital platform for a two-way exchange of energy and other services.

“Dynamic changes in technology and falling costs will change the way customers use grid services but they will also provide enormous innovation opportunities for networks and other service providers,” he said.

“Most of the serious solar companies in Australia and overseas see the integrated grid as vital to their business model and are leveraging the electricity network to create value for customers.”

This approach recognised, even with falling technology costs, it would be likely to cost customers five-to-eight times more to try to replicate a grid service with a stand alone power system, according to Mr Bradley.

“The grid is vital to maximising the economic value to a customer of their solar installation today or an investment in storage tomorrow,” he said.

Mr Bradley said installed solar costs in Australia had fallen by up to 80 per cent in the past five years driven and continued to receive significant subsidies paid for by other electricity users.

“Significant subsidies have driven world’s highest penetration rates of rooftop solar but they have also unintentionally exacerbated cross subsidies under outdated electricity tariffs, pushing up costs for other customers,” he said.

Sun Edison’s leasing initiative received direct assistance from the Australian Government in the form of up to $70 million in finance from the Clean Energy Finance Corporation.