Renewable Energy Getting Cheaper

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By Vittorio Hernandez | November 14, 2011 6:37 PM EST

Although the Australian government is apparently battling an uphill fight over the carbon tax, renewable energy and similar issues, trends support the Labor government's position that the country should shift toward renewables and away from coal.

CBD Energy (ASX: CBD), a renewable energy group pushing for solar energy, pointed out that solar prices are coming down. Gerry McGowan, managing director of CBD, compared the price trend for solar panels to digital camera. When first introduced, digicams were unaffordable to the ordinary consumer, but over time, the prices kept on going down and the trend will continue to move toward that direction.

McGowan said the falling prices of solar panels are due to the price of silicon, the main ingredient used for manufacturing solar panels, has gone down to $25 per kilogramme now from $450 per kg in 2008. Besides, getting cheaper, solar panels are also becoming more powerful.

Scare campaigns by some groups have sowed fear in potential solar panel buyers, including potential roof fires caused by improper installation procedures. McGowan stressed that solar installers must not only be licenced electricians but also have special training and accreditation to install the solar panels.

"There's also so many safeguards and audits around solar installations that so long as people make sure they've got a qualified installer, there's no impediment to them using free sunshine to get cheap electricity for the long term," McGowan said in a statement.

He added that solar power systems in New South Wales undergo three separate audits by the electricity authority in relation to the panel's connections to the grid, the Department of Fair Trading for tariff application and by the federal government over qualifications for solar credits.

McGowan predicted a much cheaper for solar-panel produced electricity at 5 to 7 cents per kilowatt hour compared to 20 to 30 cents for regular sources of electricity generation.

At current installation rates from $2,000 to $12,000, the payback period for households shifting to solar panels would range from four to eight years at current electricity prices.

Among the political groups pushing for a heavier reliance of renewable energy is the Green Party which believes Australia could shift 100 per cent to sourcing its power requirements from renewables.

The proposal - which followed the approval of Australia's carbon tax - was criticized by Labor officials, among them Assistant Treasurer Bill Shorten and Energy Minister Martin Ferguson.

Shorten said the 100 per cent shift to renewable energy is unrealistic, while Ferguson said the Greens are living in a fantasy land. 

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