Recent investigations into Green Power claims make me think… Why should we choose some institutionalised approach to investing in more environmentally friendly energy sources? Why can’t we buy direct or directly invest in the generation of solar or other renewable power?

The people selling the Green Power products are not exactly in favour of it. They are committed to coal and other traditional methods of generation. BUT they are happy to have use pay the extra money to buy something that we might think is helping the environment. Of course, caveat emptor – we need to check up on them to see that we are getting what we think we are and not subsidising the things we are hoping to change.

One reason is that private or privatised Government corporations now own the public infrastructure that was paid for in the past by the public purse. They are able to make decisions that are not subject to scrutiny like Government is. Then we have the energy retail business that was supposed to be “contestable”. It is not really and Green Energy shows that well. Even if Green Electricity is cheaper to generate and buy, it will remain more expensive in the pricing model offered – it is declared to be more expensive (because we will pay it) and that is the end of the discussion.

Now, wouldn’t it be nice to be able to invest in a small solar thermal or wind generator that sells the electricity to the grid and just buy your electricity at normal prices? Sure, there is a risk in that. It might cost you extra because of troubles with the generator or the conditions might be bad for a long time and you will not earn much. The upside is that you know you are helping with genuine reduction in the need for fossil fuel and you know you are not being deluded by fancy marketing spin (assuming you are involved in the generator more actively). What would it cost to do this? Lets say you had a 1/10th share in a $200k generator. $20k is a big investment but it will return you money that covers the margin between normal electricity prices and the premium prices for “Green Power”. On top of this, if electricity prices rise, you will get a higher return. When the Carbon Tax/Offset/Levy comes in you can sell credits and make more money. It could be a new kind of cottage industry for those who have the ability to get involved as a true investor in sustainable energy.

We are sure as you can be that we are experiencing effects of global warming. Observed temperatures are in line or ahead of predictions from the Greenhouse Effect. We have been told many times that the main cause of that is emissions from burning fossil fuels. Clearly this is a problem that needs to be met head-on by replacing fossil fuels with renewables. Or does it?

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Glenn Pure wrote a letter in The Canberra Times on Saturday that sparked some discussion.

This page did some analysis on the subsidies and effectiveness of Solar Hot water and PV technologies – particularly payback periods and the effect of subsidies.

The bottom line is that you can get a return on investment for solar hot water in 2-5 years in Canberra if you are an average user of hot water. If you use a lot of hot water then you get a pay back quicker. There is almost no need for boosting because we have clear skies and the Evacuated Tube technology is so efficient at converting diffuse sunlight to heat.

Subsidies for solar hot water are low compared to the benefits that Government gets in terms of saving the need for building more generating capacity and from carbon emission reductions.

So the question is whether it is good Public Policy to provide large subsidies (~$A8,000) for PV electricity generation or to provide small subsidies (~$A2,400) for solar hot water where the benefits to Government and the consumer are actually higher for the smaller subsidy. If Procurement guidelines were followed then there is no doubt that the Value for Money requirements would not be met, technically putting the Government in breach of its own guidelines.

Back in the mid 1970’s there was a group called “the Club of Rome” who wrote some papers that showed how exponential growth would cause the depletion of natural resources by about the year 2020 and probably by 2050, even if growth slowed. Where are we now?

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