Solar is a great technology, just not for New Zealand

Last updated 11:34 23/09/2016

Greenpeace would be better to direct its efforts at shutting down large-scale fossil fuel plants, writes Nathan Ross.

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OPINION: In recent months, Greenpeace has been running a campaign against what it calls a 'solar tax'.

The campaign is in response to a decision by the Electricity Authority (which regulates our electricity market) to allow an electricity retailer to pass on certain costs to the owner of a photovoltaic (PV) solar system.

In this instance, Greenpeace has got it wrong.

Greenpeace's petition demands that the Electricity Authority prohibit electricity providers from penalising solar users.

But there is no 'tax' or 'penalty'.

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The electricity retailer merely wanted to get the owners of PV systems to cover their own costs. If the company couldn't do that, if they were forced to absorb those costs, they would have to pass them on to all other electricity users.

In effect, Greenpeace is asking people who don't own a PV system to subsidise those who do.

There might be an argument for spreading the costs this way if solar had other benefits, and Greenpeace expects solar to cut greenhouse gas emissions (CO2). But they're wrong again.

Solar PV systems are made mostly in China, which has carbon-intensive manufacturing. Then the systems are transported from China to Auckland to wholesaler to retailer to homeowner. In other words, there's a whole lot of CO2 generated in manufacturing and getting the systems on New Zealand homes.

These emissions are called the embodied carbon and, theoretically, it could be offset by saving CO2 down the line.

However, because around 80 per cent of New Zealand's electricity is already from clean sources, solar only offsets renewable energy. It doesn't stop the burning of fossil fuels.

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Solar panels are seen at a Portugal power plant. (REUTERS)

In 2014, the Energy Efficiency and Conservation Authority (EECA) examined the CO2 impacts from household electricity savings. They found that electricity savings do not affect existing generation and, therefore, do not reduce CO2.

Installing solar actually delays CO2 reduction by deferring the development of large-scale renewable power. The windfarm in Makara, just outside of Wellington, generates enough zero-carbon electricity for around 62,000 homes.

EECA was concerned that with solar water heating and solar photovoltaics, public perceptions are at odds with the facts. A recent study by Concept Consulting came to the same conclusion.

So, in sum, there are no CO2 savings from solar PV in New Zealand. It's counter-intuitive, but this is the reality of our unique electricity system. Solar never saves the emissions made in manufacturing and transporting it to New Zealand.

By failing to save local CO2 and instead creating CO2 in manufacture and transport, supporting solar in New Zealand actually increases both global and domestic emissions.

On top of the lack of emissions savings, solar also has cost implications for everyone. Because they are highly intermittent, the PV systems linked to the grid (which is most of them, because people don't want battery back-up systems) create problems for the electricity distribution system. These problems can only be mitigated by investing in that system, and that will drive up domestic prices.

Price increases matter. Estimates are that between 10 and 25 per cent of households are already in energy poverty, meaning they spend over 10 per cent more of household income on energy. Policy-makers can't ignore this issue: you can't design electricity policies without considering the impacts on prices, and the impacts of price rises.

On top of that, people – including those at Greenpeace – expect solar energy to be subsidised, either by other electricity users or by taxpayers. But large-scale renewable electricity is already cheaper in New Zealand than coal, oil and gas, and so it happens without any government subsidy. Developers are simply waiting for demand for their wind and geothermal electricity so that it makes sense for them to build.

Climate change is the number one challenge of our time, and renewable energy is central to meeting that challenge. For New Zealand's electricity system, though, solar has only a tiny part to play.

Greenpeace would be better to direct its efforts at shutting down large-scale fossil fuel plants, like Huntly. There's plenty of large-scale renewable energy ready to replace it.

Alternatively, they should focus on our major emissions sources: cows and cars.

Nathan Ross is a research fellow and PhD candidate in international law at the Victoria University of Wellington. Before that, he was the manager of the solar programme at the Energy Efficiency and Conservation Authority.

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