Myths and facts

Many myths exist about solar power – around what it costs, what it can do and whether governments should support households and businesses in going solar. This fact sheet helps set the record straight.

MYTH  Solar panels are very expensive…
FACT  Solar panels are inexpensive and becoming affordable everyday

The cost of producing and installing solar power systems has fallen dramatically over recent years, and continues to fall. The solar panels installed on rooftops today are more than 500 times cheaper to produce than the first solar cells of the mid-1950s and costs are still coming down fast. Four years ago a solar system could cost as much as a small car; now it costs about the same as a big TV.

But how does solar compare to traditional energy, such as coal and gas?
If you count the cost of setting up a fossil-fuelled power source by including the return on investment, operation costs, fuel and maintenance over its entire life, solar is close to the cost of fossil fuel-based energy and will be the cheaper option within a few years.

Solar is an insurance policy against the rising costs of fossil fuels like coal and gas.

MYTH  Subsidies for solar and “green schemes are why electricity bills are going up
FACT  Subsidies for solar account for only around 6 percent of the average houselhold electricity bill now and this
           is forecast to fall by 2020

The cost of deploying renewables across Australia is just a small proportion of electricity bills.
By far the largest component of electricity bills is network costs (40 to 50 per cent of bills)3 – that is, upgrading transmission and distribution infrastructure such as poles and wires to handle rising peak demand and replace old equipment.

The growth in ‘peak demand’ – those few times a year when demand for electricity is the highest (usually the hottest few days in summer) is a major factor driving up costs. More houses, more air conditioners and other gadgets, all being used at the same time for just a few hours a year, puts enormous strain on the system. To avoid blackouts during these few hours we need to build extra power plants – at considerable cost. This is the real issue that Australia needs to confront if we want to stop power price rises.

The next largest component of electricity bills is the wholesale price of electricity (20 to 30 per cent of bills)4. Solar is an insurance policy against these rising costs.

MYTH  Solar panels are often installed badly
FACT   The solar industry is well regulated and safe and a reason why local is better.

Solar panels and inverters (the component that converts the power generated by the panels into a form compatible with the electricity system) have to comply with the relevant Australian Standards, and every solar installer must first be qualified as an electrician, and then undergo additional training and accreditation in solar systems.

The Clean Energy Council has a free consumer guide on its website to help people ask the right questions and to get a quality product and installations

We recommend a local supplier who is recognised and can offer you ongoing support for the life of your solar investment.

MYTH  Solar can only ever make a small contribution to our energy needs because it does not produce power at night.
FACT  Solar already makes a significant contribution and impact on our energy consumption and it’s just getting started

Solar power and energy efficiency schemes are helping cut our overall demand for electricity. Data released in 2011 by the Australian Energy Market Operator (AEMO) shows that overall demand for electricity in Australia actually fell for the first time in decades.

“The drivers behind this change vary from state to state, however it is becoming apparent that electricity consumers are changing their energy use in response to rising electricity prices, adopting energy efficiency programs and the installation of rooftop solar photovoltaic systems,” AEMO Managing Director Matt Zema has said.

Solar systems can also be a perfect fit for many businesses that use a lot of power during the day, but almost none at night.

Finally, battery and other storage technologies are rapidly coming down in price, with some household systems already sold with storage batteries included. Cost-effective large scale energy storage technologies are just around the corner.

MYTH  Solar panels are mass-produced in China so there are few Australian Jobs in solar
FACT  Thousands of Australians are employed in the solar industry

It is true that most of the solar panels in Australia are produced overseas. However, there are thousands of Australians employed in the local solar industry. It is estimated that there are 39 jobsdirectly supported in Australia for every 1 megawatt (MW) of solar installed. In 2011, 500MW were installed, taking the national total to over 1000MW. This equates to around 14,000 jobs.

MYTH  Green schemes help the rich buy solar, subsidised by the poor
FACT  Lower and fixed income households are driving the solar boom

The suburbs with the highest percentage of solar installations are overwhelmingly low- to middle-income suburbs and places with a high proportion of retirees. These are the households that are the most concerned about rising electricity prices. Over 1 million Australians live in a house with solar panels installed.
Dubbo, NSW – 28 percent of houses with solar
 Caloundra, Qld – 27.3 percent of houses with solar
 Aldinga, SA – 24.7 percent of houses with solar
 Ormeau, Qld – 23.2 percent of houses with solar
 Hallett Cove, SA – 23.6 percent of houses with solar
 Pinjarra, WA – 24.7 percent of houses with solar