I don’t think the subsidy is going to all workers – it is going to well off workers (often managers in the public service who are not really workers because they control the work lives of others) and small business, and now if the Government extends it, to larger businesses as well.

It just seems inequitable to me that someone on the average wages subsidises large ACT businesses and PS managers to produce green energy when that money could go into a Government owned solar farm.

The ACT Government is in the process of setting up a privately owned farm, but again this will mean increased electricity costs falling disproportionately on those on average incomes.

There is no mechanism for clawing back the increased costs on workers from those who benefit from the polluting system, the bosses.

wow! 261,000 divided by 27 equals 9666. So either there are less than 10,000 “electricity consumers” in the whole ACT- with its population of about 350,000- or the power company is making a buttload of money with its $27 price hike.

Or the $27 figure is wrong.

if instead of 9660 there were 96,600 electricity consumers out of that population of 350,000 -and the tariff was evenly split amongst each consumer regardless of their usage or economic means- then by my maths the bill for the tariff would be $2.70 extra per six months instead of the $27 quoted…

If you made the richest half of those 96,600 consumers pay $5.40 then the poorest half could avoid picking up any of the tab…

“Further it appears to be extremely costly in reducing greenhouse gases – about $500 a tonne.”

According to the united states EPA the average carbon emissions for one megawatt hour of delivered electricity is 1,329.35 lbs CO2.

A megawatt hour divided by a thousand equals a kilowatt hour. For this you would have emissions of 1.33lbs CO2 per kilowatt hour, or in metric terms (assuming one pound equals aboutt 450grams) 600grams of co2 per kilowatt hour.

bear in mind electricity in the US is i think slightly less carbon intensive than in australia due to their use of nuclear power. so australian emissions per kilowatt hour would likely be higher than in the US.

but, going off the EPA figures, if you were paying 50 cents for every 600grams of emissions you avoided by subsidising a kilowatt hour of solar PV power, then yes, the price per tonne of emissions avoided would be pretty bloody high- $833…

however if you are talking about a 2kilowatt installed home solar setup, worth about $8,ooo- and if it produces on average for 3.5 hours per day (taking into account cloudy days, less sun in winter, produces steadily less on either side of midday etc.) then it would produce

3.5 x 2 x 365 = 2555 kw/h per year
2555 x 50 cents = $1277.50

The 3.5 hours average could be out but i think is a semi decent ballpark figure to use.

Whilst $1277 per annum is a decent slice of money, its still going to take six years to pay off the setup at that rate.

So the fact that you are paying $500 or $800 per tonne of carbon emissions avoided isnt necessarily the problem, the problem (as your article points out) is that you need to make sure the feed in tariff is not used as a way of garnishing money off the masses’ power bill to make rich solar investors lots of cash once they have paid off their investment.

Maybe the tariff could be paid for with a carbon tax, and/or a steaming coal export tax, so that the more the feed in tariff bill goes up, the higher the tax on steam coal exports becomes!

I think the assumption that the money for a feed in tariff should all just come off working peoples domestic power bills is extremely problematic. but i think the idea of subsidising workers (and small business, schools, public buildings) to put panels on their roof is a good idea.

regards

zane

*apologies as this was originally sent to an email list and had html links to sources embedded in it. i havent been able to put such hyperlinks on the blog.

Say the various public housing bodies put solar panels on public housing roofs, can they rule out any adverse impact on the tenants as a consequence benefits wise?

Sid, another consideration is the capital gains exemption for the family home. An owner occupier (who can rent it out for some time before they lose the exemption from memory) can put panels on the roof and then sell the house (including the panels) CGT exempt.

They may think that the panels increase the value of the house more than their cost although this may not in fact be the case.

If they do increase the value, then there is an added incentive to put panels on roofs, and again this exemption is a subsidy that we all pay for (especially those who are tenants and so can’t avail themselves of the exemption.)

Your question about rates of return doesn’t detract from my argument about regressive distribution.

I haven’t done the figures. It would depend whether they are tax free or not and the cost of the installation, whether there is negative gearing, the marginal tax rate of the investor.

If they are (contrary to my argument) tax free and return say $1000 a year on a $15000 investment, then the return is almost seven percent. If it is tax free (and assuming a marginal tax rate of say 40%) this is an effective pre tax rate of return of about 11 percent. If it is not tax free then the return is roughly comparable to some fixed term interest rates. It is much much less than last year’s share gains, but also much much less risky. And the benefit to each individual of reducing green house gas emissions (even if costly) can’t be valued.

It seems to me the money would be better spent on large scale solar and wind farms.