Gareth Hughes
The future is brighter for solar

Solar power is a great solution for New Zealand to deliver cheaper locked-in electricity bills, increasing clean energy generation and greater resiliency while building jobs and globally the future for solar is bright. International analysis just out from Bloomberg shows solar developers around the world will install record capacity this year. They report:

About 44.5 gigawatts will be added globally, a 20.9 percent increase on last year’s new installations, according to the average estimate of nine analysts and companies. That’s equal to the output of about 10 atomic reactors. Last year new capacity rose by 20.3 percent, after a 4.4 percent gain in 2012.

The solar industry is seeing tremendous growth around the world: in the U.S. every four minutes another panel is installed on a home or business’ roof, and Australia already has one million homes with panels. Here in New Zealand, we are seriously lagging behind and missing the opportunity. That’s why we’ve launched the Solar Homes policy, to help Kiwis take advantage of low-cost loans paid through rates to make it easier to install their own panels. With the Government bending over backwards for the oil industry offering tens of millions of dollars in tax breaks and subsidies, criminalising protest activity at sea and removing any public say from risky exploratory deep sea they are looking to the fossil fuel past and ignoring the smarter, greener clean energy future.

This election we are giving Kiwis a choice: under National rising power bills, energy assets flogged off and risky deep sea drilling, or with the Greens cheaper power bills and a vision for a clean energy future, with insulation under your roof and solar panels on the top.

Roly Runcinan, recently retired, installed a 3KW solar PV system for $10,000. His monthly bill is down to almost zero (except fixed lines charges).

Roly Runcinan, recently retired, installed a 3KW solar PV system for $10,000. His monthly bill is down to almost zero (except fixed lines charges).

311 thoughts on “The future is brighter for solar

  1. I don’t see any scaffolding in that photo. Nor any fall protection. I hope you were compliant with health and safety standards for your photo op.

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  2. Don’t want to be a naysayer, but the numbers do not work.

    $10K for 3KW is not an economic proposition.

    The capital payback period is 10 years assuming zero annual maintenance costs. Too long.

    The 20-year NPV is under $2500. Too little.

    Factoring in a low interest expense will worsen these economics. Too much.

    My calculations were for a sell price of $0.12/unit, against a buy price of $0.24/unit. If the Solar Homes policy were implemented, then power companies would likely react by reducing the price they buy home gen to around the 6c/unit price point (average wholesale price), further reducing economic viability. “Spinning the meter backwards” for home gen is simply not sustainable.

    At a 15% capacity factor, a 3KW solar panel will generate around 4 MWhr pa which is around half of the average domestic annual consumption. So this 3KW size of PV panel will save household expenses by offsetting household consumption but it will not generate an income stream.

    Which all means that solar PV will only be installed for “green” reasons, not economic ones. Which is fair enough but the consequence will be that the uptake of the Solar Homes policy will be less than what it could be.

    Some will regard that as a policy fail. Can the Greens afford that?

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  3. You miss the point entirely. It is being done for economic reasons, rural johnny.

    Or do you think there are no economic consequences of climate change? How much profit are you going to make off your farm if the water table is so low that you cannot irrigate (Otago desertification), or that the water table is so high that you are underwater (projected inundation of coastal regions like lower hutt, or the lower Waihou river valley?

    But hey- who wanted all that bother of farm work anyway? Besides- electricity from coal is so much cheaper, right?

    That is, until the full bill comes due.

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  4. @John Messerly: Missed the point did I? My point was entirely about economics! And whether you like it or not, my figures are correct.

    You do not know what I think about climate change and that subject was not mentioned once in Gareth’s article. His reason for launching the Solar Homes policy is that “…we are seriously lagging behind and missing the opportunity.”

    Is this envy driving the Green’s policy agenda?

    One new solar panel installed on a US home every 4 minutes equals 2,200 panels per year. There are 121 million homes in the US – climate change will have over run the world before that installation rate has an impact. Meanwhile, Americans are tapping in to gas and coal tar fields and releasing more GHG pollutants as a consequence. Climate change policy is not driving their solar panel installation rate either.

    The Australians cancelled their solar subsidy program because it distorted the market too much – greedy solar PV installers raised prices to take advantage of the well meaning but flawed policy. Retail prices for solar panels dropped when the subsidy was removed. So much for climate change driving policy there too (since the change of government).

    From the Greens’ Solar Homes Policy Paper: “Energy freedom is all about … the freedom to generate your own power. It is freedom from fossil fuels and climate disaster.” That is the only use of the word ‘climate’ in the entire document.

    If this is an example of smarter, greener economics in action, then we are all stuffed, consigned to be remembered as a race who saw the problem (climate change) but remained focused on the politics of greed and envy, doing too little, too late.

    I had hoped that the Greens can do a whole lot better.

    So what is the Green’s climate change policy exactly?

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  5. I’m with rural johnny on this one. The costs of a complete 3kW system are still too high to be economic compared with some of the alternative renewable solutions such as utility-scale wind power (3MW turbines). The capacity factor of solar here in the land of the long white cloud is poor, whereas wind farms here have capacity factors which are up around the 40-50% mark – some of the highest in the world. (When it comes to adding resilience to the grid, systems with low capacity factors aren’t likely to be available when they are needed.)

    Solar power may be growing world wide, but most of it is going into areas which get more sun than we do and/or which get less wind.

    I believe that there is a niche for solar power in New Zealand, but it isn’t a very big niche – sites which have a significant continuous electrical load and preferable which already use much of their power in the form of DC either directly or via uninterruptable power supplies. (Sites meeting these criteria don’t need to convert the DC from the solar panels into AC power which is synchronised to the grid, and don’t have issues such as metering the power being fed back into the grid as they can use all the solar power they generate themselves.)

    Trevor.

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  6. Posts by rural Johnny and Trevor are essentially saying: It’s foolish to buy a home. Look! renting costs are cheaper.

    The foolishness here is not examining hidden costs. Perhaps Trevor and Johnny believe the hidden costs I enumerated will never come due. Or they may not deny they will come due, but not in their lifetime, so it will be their children’s problem to deal with.

    Which means they are either ignorant on the economic realities of climate change, climate change deniers or they are sociopathically irresponsible about forcing other people to pay their bills.

    National party MPs express views that are generally a combination of all three.

    What do I propose instead? Factor the long term costs of burning fossil fuel into prices and you will see that solar and wind are a LOT cheaper.

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  7. John Messerly: By putting false words in to my mouth your response is insulting. Please do argue the point, but rationally and without irrelevant analogies to make a confused point.

    I am not sure what the hidden costs you enumerated are. Is it the cost of water tables that are too low (typically more to do with excess drawings than climate change) or too high (in coastal areas, yes a consequence of climate change).

    How about government subsidies to the fossil fuel exploration industries? Do the Greens’ have a policy around this? If those same subsidies were available to the renewable energy industry then we would see more solar and wind generation projects. And the problems we now face would be no different.

    Factoring in the external costs of burning fossil fuels absolutely needs to be done. But that in itself does not make solar and wind ANY cheaper. It will improve the relative economics of solar and wind. But only by raising the price of every other energy source.

    Some very different thinking is required if we are to handle the climate change disaster that is now clearly with us. Regrettably, I do not see the Greens thinking differently.

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  8. I don’t know how rural you really are Johnny or where you are from but in my part of the Waikato the ground water table has been measured as 300ml lower than last years drought and there is no significant irrigation in the area. Maybe intensified dairy farming. The rain through our warm winter was not sufficient to retop the underground aquafers, although the surface was producing extra. If we don’t get rain soon production gains in spring will be negated by a short season. This is in a better year so lets see another dry year that we are told is more likely.

    This means there is a cost in water reserves and irrigation makes little difference.

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  9. Rural Johnny: “Factoring in the external costs of burning fossil fuels absolutely needs to be done. But that in itself does not make solar and wind ANY cheaper.”

    Sure. When I said cheaper I was saying cheaper than fossil fuels.

    But I am not sure I follow your point. You think it should be cheaper in absolute terms, but changing the efficiency costs of particular energy generation technologies is in the domain of science and the economies of scale achieved due to higher demand, right?

    It is good to know you agree that the hidden costs of fossil fuel burning should be factored in. So do you then agree that this would make solar and wind generated electricity cheaper than fossil fuel electricity? If so, then why would subsidies be necessary? The market would be flocking to alternative energy. Banks could see the wisdom of financing the cost of them both to small scale generators and to homeowners. The markets would already be doing the right thing so it is unclear why the further intervention of a subsidy is necessary. It’s not I’m against subsidies- they and other incentives are a great tool to kickstart particular technologies for a limited incubation period, but I don’t see the need if wind and solar would be cheaper than fossil alternatives.

    I am in Christchurch and a southwesterly in the last hours ripped up several trees on our land and took out our power. It is really ripping, but all that energy is going to waste. We can harness these winds and use pumped storage in the mountains to use the energy when it isn’t blowing. We need substantial grid improvements like a high voltage DC backbone running the length of the nation so that surges in generation may be utilized in distant locations elsewhere, or if not needed, accumulated by such pumped storage facilities wherever they are. It doesn’t take much for such a facility- you need a micro water turbine, a water pump and a steep rocky ravine somewhere near a body of water. The nation is littered with sites like that. Transpower has been upgrading some of its grid in anticipation of increased generation from alternatives, but these projects have not materialized. And progress will continue to be retarded while fossil fuels are perceived to be cheaper.

    Instead we spend 8.4 billion per year on Oil imports. That money could and should stay in NZ and contribute to a green economy rather than stoke the fires of a planet destroying carbon economy.

    But besides contributing to our balance of trade, there are added benefits. A recent study published in the journal Nature Climate Change shows that wind farms substantially reduce the impact of extreme storms. (The research paper was summarized here.)

    But National sees no sense in any of this. They think NZ electricity should rise to the same price as world electricity prices and that we should be integrated into the global carbon economy. Normally electricity is not fungible but actually it is if you allow NZ hydroelectricity built at ratepayer expense to be exported the world in the form of aluminium. “Sell everything not nailed down” is National’s motto. If it is nailed down, they are looking for a crowbar.

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  10. oldlux: yes there is a cost to water availability. It’s an interesting area and one that I like to think of in the context of The Commons. The problem is that so many take water as a matter of right and without thought to the consequences or rights of others in the community affected which leads to the ‘tragedy of the commons’.

    I also am in rural Waikato, north of the River and south of Pukekohe. Water is again an issue for us, not so much in its availability but in its application to our parched lands to sustain pasture production. Whilst no one can say for sure that the present drought, on top of last year’s drought, is a consequence of climate change, it is simply wrong for John Key to take a head in the sand approach and say that there is no causal relationship. We need politicians to stand up and do something to prepare our society for the catastrophe that science says, climate change will wrought. Even if the scientists are to be proved wrong.

    If the Greens wanted to differentiate itself as a political force different from the others, then a Commons approach to land, water, radio waves, electricity and more, would I believe, serve it well. Their NZ Power and Solar Homes policies are muddled. In my humble opinion.

    @John Messerly: My point was simply that solar pv is not yet economic and policies that seek to subsidise it will likely fail. It is not that I think solar pv should be cheaper in absolute terms (although new solar panel technologies will change that in time). It is that solar pv must stand as an economic proposition before it will gain widespread adoption.

    How solar pv may compare against unsubsidised fossil fuel technologies I do not know but solar pv panels also have hidden costs (eg the scarce minerals used in their construction).

    Solar pv is not yet the panacea to solve our energy/oil/climate crisis. If the Greens were objective in solving those issues then they would develop policies that solve problems rather than policies that focus on populist matters such as NZ Power and Solar Homes.

    When I think about individual and societal resilience in the face of climate change, I see a need for small scale and distributed renewable energy generation systems. For example, 20KW wind turbines in areas with a sufficient wind run are both economic and add to resilience. 3KW solar panels do neither. Well-considered policy in this area is where the Greens could readily differentiate itself.

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  11. Rural Johnny- You made this statement:

    Factoring in the external costs of burning fossil fuels absolutely needs to be done.

    If this came to be, then solar would stand on its own as an economic proposition. Now, it seems to me that the Greens and not National or Labour are advocating serious measures to factor in those external costs.

    Costs like wars of migration as lands become inundated or costs of lost GDP as once fertile lands are now desert.

    Costs in the range of multiple trillions of dollars.

    The surcharges on fossil fuels would have to be massive to cover those hidden costs. Or do you disagree?

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  12. “John Messerly: By putting false words in to my mouth your response is insulting. Please do argue the point, but rationally and without irrelevant analogies to make a confused point.” – exactly right rural johnny.

    I find myself in a weird position – John Messerly is calling me “sociopathically irresponsible” yet agrees with what I have said! I can only conclude that he has a problem actually reading what I have written.

    Let me try again – solar power is too expensive. Wind (and geothermal) are much better options, not only with respect to cost but also with respect to availability.

    Trevor.

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  13. Good Grief! All into the weeds, on things we largely agree about too. Trevor and Rural Johnny have the right of it in several senses.

    Solar Electric is just about the least economic of all the “alternative energy” sources we can promote.

    Subsidies are always a market distortion when they occur, and are ONLY necessary when the alternative of putting a realistic price on the damage of the CO2 producing power generation is abandoned.

    Those costs are immense, and using Fossil Fuels is anathema but putting a subsidy on this technology because that worked to get a lot of panels installed in Germany doesn’t make the numbers any better. One needs to examine those economics

    I might take issue with some of the specific numbers used by Rural Johnny, as the portion of the power that is offsetting domestic use (not selling back into the power grid) is compensated at the full retail price of 24 cents a unit, and that price is going to go up unless we take control of it and the power generation arrangements (*and this scheme would seem to conflict with that one in some ways), and the 3 KW unit is as he points out, going to provide power almost entirely in this regime. So the capital payback and NPV are quite a bit less invidious than his numbers. OTOH, if I do it and don’t stay in my home for 10 years or so I am apt to have some difficulty recouping the value… or not… depending on which way the price of electricity goes and the rate of deterioration (quality) of the installation.

    Still, he’s right overall because this is a high latitude “land of the long white cloud” and our solar resource is a lot less than the resource in Southern California where one of OUR drier years would be regarded as wet. So the payback of some OTHER energy system or conservation is apt to be better.

    We ALL know we have to stop burning dead dinosaurs and start collecting wind and solar and conserving and setting up tidal generation and more geothermal.

    Everyone here is agreeing violently about that.

    Greens argued early and often for higher prices on the CO2 emissions. We still do but we get nowhere. So it may be necessary to turn to subsidies, but this subsidy is, by itself, still a distortion. We’d do better to subsidize double glazing retrofits, further insulation improvements, heat pump installations and then generic alternative energy that includes wind turbines and solar and anything else.

    We should play to our strengths and work against our weaknesses as a nation, and not pick winners for alternative electrical generation. That makes more sense for us as a party and I am not that pleased with this policy. I hadn’t heard of this before it appeared.

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  14. Ok Trevor, we are getting at what Rural Johnny was saying. You don’t seem to like it. The point here is that fossil is way way more expensive when the hidden costs are factored in.

    Do you agree with rural Johnny that “Factoring in the external costs of burning fossil fuels absolutely needs to be done.”

    Because I see no such factoring in the calculation of whether solar is more competitive or not. By burning fossil fuels we are borrowing on our future and handing the bill to our children and grandchildren. Let them handle the balloon payment that will come due.

    It is fair to call this behavior sociopathological, whether you recognize it as such or not.

    Instead, the Greens are painted as being unrealistic about economics. If it were not so sad it would be laughable. We are lectured on the economics of solar as if they have even the least bit of competence with their numbers. In solemn tones we are told that the arithmetic doesn’t work out. Yet Rural Johnny can’t even do simple multiplication. He has so little care for the numbers that he couldn’t be bothered to correct his error.

    When you find you are being sold an idea by people who can’t be trusted with simple maths problems, why should we believe about their financial assurances that solar panels won’t pay for themselves? Projecting wholesale and retail power prices is exceptionally complex, yet rural johhny can’t even manage to figure out how many minutes there are in a year and divide that number by 4.

    National and Labour don’t want fossil fuel to be priced at what it really costs. Although fossil fuel enjoys this accounting distortion, solar and wind is stripped of any policy initiative that aims to allow an offset to compensate for that distortion of the economics.

    Even this zero cost financing proposal that Gareth is promoting has a load of rubbish heaped on it.

    Why.

    It’s because Rural Johnny and Trevor are arguing the case for the carbon economy. It’s a conservative calculus where the numbers simply don’t add up. National doesn’t want to pay the bills. They have no interest in responsible economic stewardship of the nation. The Greens do. Their policy proposals address real economic challenges facing the nation. National wants to run from them while garnering the greatest short term profits for their friends in private industry.

    The spectacle is disgraceful, and especially disgraceful is the suggestion that the Greens are naive about the financial dimensions of the problem. On the contrary, they are all too aware of how the deck is stacked against the Kiwi consumer, and how profiteers aim to sustain systems that gouge consumers on prices every day.

    In this case, electricity retailers hate the idea of having to pay homeowners the daytime wholesale rate for power- the time the panels are generating energy. But Johnny didn’t tell you that. They hate the idea of more and more homes cutting their electrical consumption substantially by going to solar. The household power is their premium segment of customers with the highest profit margins. That is the real reason that National hates solar. It’s because they view it as driven by “envy”- taking money out of the pockets of their benefactors. When all that is being aimed at is preventing those benefactors taking money out of the pockets of the people, and in the process taking out an enormous loan that our children will be forced to pay.

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  15. John Messerly: You have twisted the point I made (that solar pv is not yet economic and that this will therefore likely lead to failure of the policy) to your own but different ends. I do not see that you understand what has been written by myself nor others.

    Yes I believe that the external (unaccounted for) costs of burning fossil fuels need to be factored in to the price. But it is a leap to far for me to agree that “The surcharges on fossil fuels would have to be massive to cover those hidden costs.” as you argue. I simply have no way to quantify those hidden costs. If you do, then please tell us what and how much they are. That lack of knowledge does not make any of us sociopaths and to label us as such is insulting.

    Wild, speculative and emotive arguments such as yours do nothing to help our populace understand the significance of climate change.

    The real peril here is that whilst John Key’s government are leading us to climate crisis oblivion, I do not see credible alternative policies by the Greens. Please believe me that I do want to see the Greens develop that credible alternative. The Solar Homes and NZ Power policies are not credible.

    My calculations of ROI, NPV and capital payback on 3KW solar panels are credible. bjchip “might take issue with some of the numbers” but to the best of my ability, I have done this accurately. My calculations were based on differential buy/sell pricing, included operating costs, a cost of capital at 7% and inflation at 3% pa. If you want to counter argue that, then do the calculations.

    Your dig at Trevor is quite misplaced. He and I are in complete agreement that solar pv is not economic. At the moment. I qualify that only so far as new solar technologies offer the promise of higher solar efficiencies and therefore, better economics. If and when that point arrives, I can see a possible role for subsidised installations to realise economies of scale much quicker.

    Finally, your point that “the Greens are painted as being unrealistic about economics” is I think, true enough. Sorry, but I think your contribution to this discussion is actually a clear brushstroke in that painting. Whilst the Solar Homes policy is well-intentioned, it does not serve the Greens well (for the reasons outlined) and will do nothing to mitigate the the causes of climate change and too little to help us adapt to it.

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  16. @John Messerly – you still haven’t actually managed to read correctly what I wrote! I have NEVER argued the case for the carbon economy and calling me a climate change denier is absurd if you bother to search for other posts I have made on this site. And I have no idea what I wrote that led you to claim I am saying “It’s foolish to buy a home. Look! renting costs are cheaper.”

    What I am saying is that solar power in New Zealand is an expensive way of generating power just when we don’t actually need a lot of power. It does NOTHING to meet our winter peak power demands which occur after sunset. Yes we need more renewable power generation, but we need to generate power in winter at night and on cloudy days. Wind can do this, but not very reliably. Geothermal and hydro can do this reliably. Tidal power can generate power reliably but not all the time – good for powering loads that can be interrupted for a few hours at a time or for conserving the water in a hydro lake. Subsidising solar power so it can push down the price paid to the other generators of renewable energy is not going to help their economics, yet they are the generators we need to wean ourselves off fossil fuels.

    Trevor.

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  17. Does anyone know of an elegant way to store solar/wind energy generated during the day to be used at night?
    Hydrogen cracking? Gyros?
    I’m looking to take an entire hotel off-grid. The big problem isn’t the cost of the power, around $80k annually (yes I know that hurts), It’s the lines fees of being connected to the grid which amounts to an eye-watering $72k before you even turn on a switch!
    On that basis feed-in tariffs etc become irrelevant compared to the incredible cost of just being connected.
    I’m figuring that the total solar and wind energy available on a 365 day basis adds up to one heck of a lot of ‘free’ energy…but how to store it…????

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  18. John states:

    What do I propose instead? Factor the long term costs of burning fossil fuel into prices and you will see that solar and wind are a LOT cheaper.

    And how exactly do you intend to “[f]actor the long term costs of burning fossil fuel into prices”?

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  19. The big problem isn’t the cost of the power, around $80k annually (yes I know that hurts), It’s the lines fees of being connected to the grid which amounts to an eye-watering $72k before you even turn on a switch!

    Pay the $72K, its a bargain.

    $80K annually puts your average daily consumption somewhere north of 400 KWh.

    Up at the top of this thread is a pic of Gareth and some bloke called Roly Runcinan, proudly standing next to a 3KW system, cost about $10K. For $72K you could get eight-ish of those 3KW systems, which would give you a peak output of 24KW. You would need 166 hours of hot sun per day to generate the power you need. Then you would need to store it for when the sun don’t shine…

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  20. dbuckley, you are right. But the power consumption of this property is VASTLY more than it should be due to it’s stunningly inefficient design and construction. that said, this property is an absolutely ideal candidate to retrofit for spectacular gains in energy efficiency and heat recovery (both air and water). Should this work the percentage of lines fees compared to actual power bill will get very skewed very quickly.
    It’s tempting to buy a f-off big generator(s) and run the thing off diesel and downsize the generators as the energy efficiency improves. (remembering that I can recover the heat produced by generators as well as the electrickery) Anyone know about that?
    Given the current $150k energy bill, that same $150k will finance a heck of a lot of energy efficiency upgrade and diesel!
    @ ruralJ, Interesting…what kinda critter is that they have installed? Battery, but…??

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  21. Samiam

    Look into storing heat and using heat rather than electricity for heat, wherever possible. Hot Water is probably your most efficient use of Solar and it is relatively OK for storage.

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  22. It’s tempting to buy a f-off big generator(s)…

    Prime power rated diesel gensets (which is what you’ll need) are not at all cheap. You can’t run them 24×7, they need maintenance, so you need to plan for power downs. Fun in a hotel. And they break down occasionally. You’ll have to truck the diesel. And get a resource consent to use it.

    I say again; $72K to be on grid is a bargain. Compared to what it will cost you not to be on grid.

    (Traditionally, for cogeneration, which is what you’re inkling towards, you size the plant for the heat required, and then you get the electricity as a “free” byproduct)

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  23. The elegant solution to samiam’s question is in-ground thermal storage.

    Think of it as the inverse to ground-source heat pumps where heat is pumped underground and stored. Some countries are using this technology for seasonal heat storage (store it in the summer, retrieve it in the winter). It is also being used to provide a heat source to de-ice roads in the winter.

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  24. I laugh at all this talk of economics as a precise mechanism. It is at best an attempt to quantify elements of our ;ives, using mainly the dollar and ignoring social/environmental costs – the common that ruraljohnney alludes to is hardly recognised as it can’t be easily measured or sold most of the time.

    Good economic analysis includes the art/wisdom of seeing the trends outside the calculations. The Greens have a good record of backing winners and someone calculated the Values Party policies wre 80% adopted as mainstream policy over time.

    The percentage not adopted and generally still in Green focus is the bit that the so called economists of the ruling elites can’t or won’t get their head around because of self interest and lack of ability to comprehend. The Greens probably have a higher number of academics than most parties and this is modified by the rural and alternative focus of a large proportion of members.

    A policy that pushes our power system toward sustainable and diverse production as opposed to centralised, more monopolied, and large scale generation is socially and environmentally superior. A lot of these policies are modified and improved as they grow but it is the direction that shows responsibility. Monopolistic, well paid detractors are always around as they have something to looses. Wind power, heat storage etc. maybe an extension to the original proposal and technological improvements will undoubtedly improve the outcomes, but this start off helps the momentum.

    The Greens are also seriously questioning the effects of deficit financing and its effect on globalised centralisation of the economy, government subsidies to the unsustainable status quo, making the access to the Commons more equal, the list goes on.

    This government has tired old policies that support those that continue the anti-social policies.

    The Greens are forward thinking and those who always rattle the economic bogies are usually not thinking enough of the unmeasured Commons.

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  25. samiam – the classic answer to storing solar energy so it can be used at night is Concentrated Solar Power, where mirrors are used to focus the direct sunlight and heat a working fluid, the heat is stored in insulated containers, and used when required either directly or through a conventional heat engine. However these installations don’t tend to be small, and don’t work well using scattered sunlight, i.e. when there are clouds around.

    There are a number of ways of storing electrical energy but only two don’t involve conversion to another form of energy – big inductors or big capacitors. Any conversion process adds more losses. Most conversions are some form of battery, i.e. a conversion to and from chemical energy. Flywheels store the energy as kinetic energy. Several storage systems use potential energy, i.e. lifting weight whether this be water (as in pumped hydro storage – the most common form of utility storage) or some other material (including gravel!). There is compressed air storage, but that one is tricky. There is even heat and cold storage nicknamed a “gravel battery” just to add confusion with the other gravel battery I just mentioned.

    Electrolysis of water into hydrogen and oxygen is an option too but hydrogen is tricky to handle and the efficiencies are poor, particularly of the conversion from hydrogen back to electricity. If you have the power and can use the heat, this may not be an issue. Of course if you have a need for high grade heat e.g. for cooking, you can simply burn the hydrogen.

    What makes most of these systems unusable is the cost of sufficient storage to handle several days without significant generation – still, cloudy days. You will probably need an alternative source of power which probably means burning something, so unless you want to burn biomass and run a steam-powered generator, you will probably need a diesel generator.

    I hate to say it but dbuckley is probably right – your best bet may be to just pay the $72k.

    If you do try to go it alone, my suggestion would be to wherever possible store the energy either in the form it arrives (probably solar heat) or in the form it is needed (heat or cold or pumped water), so you minimise your conversion losses. Then maximise your other efficiencies such as LED bulbs for light, good insulation, careful choice of appliances, etc. Also try to diversify your power sources to minimise the times that you need to use the stored energy.

    Trevor.

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  26. dBuckley: “And how exactly do you intend to “[f]actor the long term costs of burning fossil fuel into prices”?”

    I have already answered that. I favor Carbon taxes implemented with an auxiliary currency. As long as coalition partners refuse a cost based approach, leveling the playing field against carbon solutions with aggressive incentives would be a good place to start. The one that Gareth is advocating is one such approach that demands support from responsible adults in the room.

    Accepting that climate change has costs is not just a sound bite. Let’s look at facile expressions of support for the idea that the costs of Carbon emissions should be factored into the pricing of energy sources. What amount does Rural Johnny propose to cover these hidden costs of climate change? We don’t know if it isn’t zero because he won’t say. The structure of his response is a typical trick of the sophist: the Appeal to Ignorance. “You see,” these seemingly sympathetic voices reason, “It is complicated. Sure a 2 degree rise will result in accelerated melting of the icesheets, but we can’t actually prove how much of Christchurch, Auckland or lowlying coastal tourist and farming areas will be underwater or how those landowners should be compensated. Sure, changing climate patterns may result in desertification and more frequent duration and intensity of droughts in parts of New Zealand that are now productive. But scientists can’t predict that so let’s just keep the surcharge for such hidden costs zero and we can let our children and grandchildren deal with it. She’ll be alright, don’t sweat it-”

    In other words, “we can just fob this cost off on the kids, because we can always tell ourselves we never had anyway of knowing how enormous that cost would be.”

    If you believe this sociopathic yarn, then you simply have to believe that scientists are wrong about the outcomes of climate change.

    Perhaps rural Johnny can give us some indication of what he thinks a fair surcharge for the hidden cost of climate change is. At least a range. After a gentle phase in of the surcharge, what would it be? Does he think that a billion per year would be adequate? Or is it more in the range of 10 or 20 million?

    What do we do with known unknowns? Well, responsible people perform an analysis of the risk scenarios. But wait- we have done that- and scientists are willing to state that it is likely that the global temperature will increase by about 1°C to 3°C by the mid-21st century and by about 2°C to 5°C by the late 21st century. (source: IPCC Managing Risks report, page 13.)

    Is it emotional alarmism to point this out? No. This is science- is a five degree change such a big deal- especially if it is spread out over the next 70 years? National Geographic described a 5 degree this way:
    “Now we enter the twilight zone of climate change, a nightmare vision of life on earth. Perhaps most frightening of all is how much we can’t know. Traditional social systems would break down.” ( “Degree Five”- 1 minute in)

    When negative outcomes are possible, adults make preparations to make them less likely or to blunt their impact when and if they do materialize. That is what responsible people do. Yet sophists in the National and Labour parties like to use dishonest tricks of argument like the appeal to ignorance to evade doing anything substantial, and excuse themselves from any culpability for their irresponsible inaction.

    So where is the burden of proof? A clear majority of scientists are telling us is that the carbon economy is potentially very harmful, and that there are economically viable solutions. Isn’t the burden of proof on the side that says that the carbon economy is not harmful? Because this is the side where there are potentially dire consequences, but not on the other. The Green side says, if we’re wrong, we’re wrong, but then there’d be no potential disaster for the planet. If National and Labour are wrong, then our future is stuffed. We are addicted to carbon and yet the so called “fiscally responsible” parties in power refuse to do anything about it though scientists have warned us of the enormous risks. If that is not sociopathological behavior on a massive scale, I don’t know what is.

    Regarding putting words in Rural Johnny’s mouth, he refuses to acknowledge his ridiculous calculations but and hope we didn’t notice. He wants me to point out what’s wrong with his figures, but when I point out even the simplest one he acts as if I pointed out nothing.

    Ok- Here’s the passage: Rural Johnny stated “One new solar panel installed on a US home every 4 minutes equals 2,200 panels per year.” This financial genius can’t even multiply. He is so bad with numbers he can’t even detect that there is something fishy about the range. 2,200? Really? There are 365 days in a year, but we are talking about a phenomena measured in minutes? You think you might be off a tad in your wild guess? Johnny, try maths. Multiply 60 minutes times 24 hours times 365 days. You do not wind up with a number anywhere close to 2,200.

    These are Rural Johnny’s words and numbers. Think about what he is stating. You think his other assertions about more complex details like what the daylight hour wholesale rate would be are correct? Perhaps numbers and finance are not Rural Johnny’s strong suit.

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  27. @Samian- I presume you have investigated the high end deep cycle batteries like Trojan, Surrette, Solar One. These are long life but come at a price premium. Some off grid people seem to be opting for lower quality deep cycle batteries and accepting the cost of replacing them every 5 years or so. Physicist Amory Lovins’ model solar home formerly used Nickel-Iron, but he has gone to sealed lead acid- specifically a bank of industrial quality Absolyte absorded glass matt type batteries. Example USD price and specs here.

    Do your grounds have any big hills or better- rocky ravines? If so you might consider hydro storage instead of batteries. Even if you don’t have an area suitable for a dam, you could pump to containers. Let’s take a cheap and ugly though disguisable form: 40 foot shipping containers. These have 76.4 cubic meters and if you had a property on Banks Pennisula near where I live, you might be able to be able to position a container so that the pipe going down to your microturbine is 120 meters below. Just quick check using this calculator, it appears the ideal potential gravitational energy (which of course the microturbine will not entirely capture) seems to me to be about 24 kilowatt hours. So at $3K per 40 foot container, and maybe 15K for a microturbine, and maybe another 5K for a pump to store the power, you are in range for a very high capacity battery at low cost.

    However, I am not aware of anyone who has constructed such a system using shipping containers. Lots of people do micro hydropower and you can get those turbines on the net, but as for this configuration for stored hydropower, you might be the first one to do it. Stick a bunch of them on a hill, bury them and you could store several weeks of power up there at much lower cost than what you are paying for line fees.

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  28. @dbuckley – when I wrote “I hate to say it but dbuckley is probably right – your best bet may be to just pay the $72k.”, I didn’t mean to imply that I hated to agree with you :).

    @samiam – it sounds (from the high grid connection cost) as if this hotel is in the middle of nowhere, in which case it could be at serious risk of losing its grid connection in the type of storms that we have seen in the past few days. If that is the case, then you might need to consider some form of backup power anyway.

    Trevor.

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  29. Trevor: “What I am saying is that solar power in New Zealand is an expensive way of generating power just when we don’t actually need a lot of power.”

    Oh? How do you propose that we get on a glide path to producing power for transportation? If you were an analyst for power companies on the South Island, there is no question that there are better choices than consumers deciding not to pay premium prices for electricity and going solar. Sure, a 3MW wind turbine is far far more efficient than solar power. It is far more efficient than a home scale wind turbine because of ideal siting and scale- that power increases with the square of increases in the sweep of the blades.

    All true. But even if it is less efficient, that doesn’t mean it doesn’t make economic sense for a home owner. What they about is reducing their monthly costs. And even rural Johnny admitted that it achieves that goal. He just doesn’t like the ROI on it, and has cooked his numbers to make it seem ridiculous.

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  30. John, the point is that a home scale wind turbine is going to be more cost effective in most cases, than the solar, as the demand is highest just at dark-thirty in the winter. A solar-thermal install with hot water storage is going to be more efficient. A farmer might do better with biomass. When storage costs reduce and the climate changes some more, the advantages will shift, but for now the choice of solar-electric as the sole beneficiary of this policy, is a bit… questionable.

    respectfully
    BJ

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  31. John Messerly: Whew!

    I am pleased that you have read earlier posts to understand them and in so doing, found an error on my part. Yes I transcribed the wrong number and made an error. But that error was incidental to the main discussion and the conclusion from it (that climate change is not driving the US solar program) remains valid. That error also does not invalidate my other calculations of capital payback, NPV and ROI.

    Again, tell me where you think I “cooked [my] numbers to make [ROI] seem ridiculous”?

    Anyway I went back to the Solar Homes policy and looked at the numbers therein.

    I note that a price of NZ$3.33/W for solar is used ($10K/3KW). This compares to the average installed price in the US of US$4.81 (NZ$5.77) for residential solar installations. There is no indication of the average solar panel size in the data I accessed. I can buy solar panels ex China for ~NZ$2.20/W and doubt that shipping, taxes, installation and a commercial profit would come in at $1.13/W. The Australian experience of subsidised solar installations was that commercial companies increased their margins and that would likely happen here too.

    Second, the policy document sees $1,000 of electricity produced per year at current prices (==$0.28/unit) which equates to a 13.3% capacity factor. A $10K loan at 4.1% over 15 years sees capital and interest payments of $900 per year. So the net benefit to consumers is only $100 per year for the first 15 years, then$1000 per year for the next 10 (at today’s prices). My calculations were based on a 20-year project life – if that is extended to the 25 years in the policy, then the NPV moves up to $4,320. Will 30,000 people take up that offer over 3 years?

    So I say again, there is no economic sense for home owners to take up the Solar Homes offer. Many will do so for environmental and feel-good reasons and good on them. But the economics simply do not stack up.

    So now to come to your further bullying insults (sophist!). I cannot “give [you] some indication of what [I] think a fair surcharge for the hidden cost of climate change is”. It is not that I “won’t say”. I cannot and do not need to attempt a wild guess. Your use of “billions” in this regard, even if correct, is meaningless to the original issue and not helpful to a rational discussion of the issues.

    I referred to the subsidies given to oil exploration companies but have not been able to find a Green Party policy statement about removing this. If there is one, please point me its direction. But for a rational environmental policy, that would seem to be a good starting point. To move beyond this to factoring in costs of environmental damage appears to be so huge that even your policy developers have not contemplated it. So how could I? But I again agree that it must be.

    Finally, your point about getting on a glide path for the electrification of our transport fleet is an interesting one. Parked battery-powered cars represent a good electricity storage medium and a lot of work is being done to explore how that storage could be used to even out supply/demand spikes. It is a concept that sits well with home gen.

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  32. To focus on something positive, I see the WWF have a concept that the Green Party could pick up verbatim and run with as a specific, measurable and realistic policy goal: “Eliminating government support for oil and gas exploration would, on the face of it, free- up NZ$46 million per year of expenditure and revenue currently foregone.” That $46million could be used to “…for example, pay for a multi-year programme to install grid-connected solar panels onto the roofs of Housing New Zealand’s 70,000 homes”

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  33. Ok, I pointed out the error before and you took no notice. Everyone makes mistakes. What alarms me is that the magnitude of the number that you calculate was far off and it didn’t seem fishy to you. That suggested to me that you are not all that familiar with numbers- which was particularly offensive given the condescending financial tone criticizing the Green Solar Homes proposal.

    So where to begin. Let’s begin with the rhetoric. Is this subsidized solar? No. Gareth is talking about a financing scheme. This is not a giveaway, so let’s just cut the conservative meme nonsense that liberals are spendthrifts who cannot be trusted with money.

    As for figures, let’s look at some of the glaring assumptions. The first is that power prices stay the same. Is that a fair assumption? Since National took office, those prices have skyrocketed. Isn’t it safe to assume that no matter how many Labor-Green governments come in to hold down energy price increases that subsequent conservative governments when elected will just turn back on the money spigots to their benefactors? Of course they will.

    There’s another reason though. If we are serious about going carbon free that means elimination not just the carbon emitting generation on the north island. It means working towards elimination of carbon transportation fuels. That will place enormous demands on our generation. Substantial new hydro in the south island and utility scale wind needs to be built but that will require substantial investment cash. Note that the North Island will not want to see big wind farms anywhere near their lifestyles, so these farms will likely be sited away from cities- which means what? Substantial investments in the grid so that we can move energy from the south and rural areas to the Northern urban areas.

    So tell me again that electricity prices are going to stay the same as they are today, and in the same breath suggest that this is responsible economic realism speaking. It is absurd.

    Next you stated that generators will cut payment to the solar producers to the average wholesale rate. That’s nuts. Look at the profile of spot prices in the wholesale market. The prices for power are high during the day when solar is generating. Even a conservative government would agree that paying PV generators less than what the utility scale generators are getting is not fair. And this is assuming that the single buyer system that Labour/Greens are proposing is not implemented, and they don’t have something to say about microgeneration buyback pricing.

    The policy paper points out that even using conservative figures of recovering $1000 per year that the program pays for itself. Just after that statement they point out the obvious- that “As technology improves and Solar Homes grows the market, prices will continue to improve.” Are we to believe that installation prices won’t come down markedly as the market grows? The residential cost of solar in Germany is half that of what it is in other countries, and most of that is due to soft costs like installation efficiencies. (source)

    So- lots of faulty assumptions in there, and lack of plausible models for the development of this market segment. Not just bad arithmetic.

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  34. BJChip- I agree that an incentive finance scheme for all microgeneration home techniques that complied with parameters would be more desirable than a technology specific position. In this case there is an incubation argument which justifies temporary incentivization. Even Adam Smith accepted this proposition. Though PV is fairly stable at this time, installation technology can cut those costs resulting in a final fully installed price on PV half what it is in other countries. After such a period necessary to get Kiwi installation techniques as efficient as those in Germany, I could see a phase out of the specific incentive in favor of a generalize incentive scheme for microgeneration.

    The requirements might be: 1) carbon free generation 2) financing set at a maximum of X dollars per estimated annual KWH for the site 3) residential use 4) estimated KWH implies the technology has been reviewed as reliable for the return on investment. That is it must possess acceptable characteristics- eg units do not have a short service life/ are too unreliable- no financing of DIY windmill or water turbine contraptions and so on. 5) means testing- those with net wealth in the top 1% should be able to arrange their own financing without government assistance.

    If you think about it, such a generalized scheme would be significantly more complex and would be a heavier political lift. You have to start somewhere, and solar has a minimum of variables and would be and expected choice for many people even if they could get financing for a wind turbine. (eg- noise, and neighbor complaints about it being an eyesore).

    Trevor seems to make the case that is generic for any decentralized small scale generation scheme. Utility scale generation is always going to be more efficient than small scale, but he is confusing engineering efficiency with political efficiency. He is confusing what approach gets the biggest green bang for the buck at the macro scale with what green approach delivers the greatest perceivable savings for consumers. Unpercieved benefits don’t deliver votes, and lack of votes for to combat climate change means fewer projects. A popular microgeneration policy whose technology is only 10% efficient is far more effective than an unpopular utility scale scheme that is 3 times as efficient. Trevor suggested that there is a zero sum game being played here, with money going to microgeneration as retarding progress that large generator entities are doing with green technologies. That happens to be a divide and conquer meme frequently used by advocates of the carbon economy- pitting people religious about wind with advocates of geothermal, solar or biomass. It is counterproductive to publically speak ill of these other approaches. They all provide a piece of the puzzle as we drive towards a carbon free economy.

    Lastly, this meme about solar not being a good fit for NZ is shear nonsense. We have far more Sunshine hours than Germany, but Germany already generates 3 % of its electricity from solar, 18 Terawatt hours- or what NZ’s national generators- everything is able to produce in about 2 months.

    And all this from a country that is far far more cloudy than NZ.

    Solar PV reduces people’s household costs of energy providing much more reliable cost expectations than promises from hypocritical National MPs, and Labour MPs with negligible support for effective strategies to get NZ off of our carbon addiction. They don’t have to trust what Labour says, or what National says. They can trust what their panels do for them faithfully every day, rain or shine. And there will be no middlemen between these pioneers and the panels insisting on their pound of flesh.

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  35. Johm Messerly asked “How do you propose that we get on a glide path to producing power for transportation?” Once again, he failed to read what I have already written:
    “Yes we need more renewable power generation, but we need to generate power in winter at night and on cloudy days. Wind can do this, but not very reliably. Geothermal and hydro can do this reliably. Tidal power can generate power reliably but not all the time – good for powering loads that can be interrupted for a few hours at a time or for conserving the water in a hydro lake.”

    I could add wave power to the list, although this is not a proven technology. New Zealand’s South and Western shores have world-class wave resources – up to 70kW/m. Even with only 30% conversion efficiency, we might be able to harness 20kW/m. Doesn’t sound much? Consider a 1MW plant requiring just 50m of coastline. That is some serious power available. 20% of New Zealand’s power needs could be met with 50km of coast, although the generators could be out to sea – depending on the technology.

    I already pointed out our world-class wind resource.

    New Zealand has more than ample renewable energy resources. We don’t need to choose a resource that isn’t ideally suited to our conditions, even if Germany chooses to subsidise that resource in even less suitable conditions. However I am not saying that solar PV shouldn’t be installed, just that the economics are against solar PV for most applications, and one of the reasons for this is that compared to other forms of generation, solar power is probably the lowest quality, in that it is only available for part of the day – the same part everywhere in New Zealand (give or take an hour), and may not be available even then. Considering that it is available between peaks of demand and not available at those peaks, it is quite poor at meeting our power needs. At least wind and wave tend to be available more of the time and during some of our peak demand periods, and different sites generate power at different times.

    Trevor.

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  36. samiam, you might like to try to track down the book “retrofitting buildings for energy conservation”, edited by Milton Meckler [gogle search].

    Its an interesting book.

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  37. Trevor thinks this is purely a technical question from the point of view of a Power Utility. In his mind, there is no place for microgeneration. He will poo poo anything a homeowner can do to contribute to NZ’s power generation.

    A Solar Home is good green alternative from the perspective of a home owner. A Home owner cannot install a dam, geothermal, and most cannot install a utility scale wind turbine or even a home scale one due to community restrictions, and noise / visual complaints from neighbors. The dBuckley’s and Trevors of the world council green advocates to let big business sort this one out because they are best at it. Yet even Rural Johnny admitted that the Home Solar project is net cash positive for the homeowner even while they are paying back their loan.

    So what we don’t understand is why the homeowner should just go on taking it in the bum from the power companies when they could be somewhat insulated from the pricing caprices of the power companies.

    We could be generating 18 Terawatt hours per year just like Germany. And we have far far more sunlight hours per day than they do. Even on cloudy days PV generates power, and we don’t have anywhere near the dense cloudy days of Germany. So on a very large scale the advocates of utility scale green power are forced to admit that Solar is practical and economically attractive from the point of view of consumers. Sure big utilities can and should major new wind farms, dams and geothermal. But what are we saying- that home owners/ voters are disqualified from being personally invested in the national march towards a non carbon economy?

    This gets to my point about Green advocates who exclusively focus on engineering efficiencies- as if these technologies will immediately be implemented in a political vacuum due to their superior large scale engineering and corporate profit characteristics. Well, that is simply naive. There is a simbiotic relationship between all these solutions. We should be advocating all of the above approaches. Home solar happens to be far far more politically efficient because individual voters become political stakeholders in a carbon freedom. They become very interested in what a feed in tariff is, and the activities of a single government buyer of electricity is doing.

    There’s more though. Clearly Home Solar can help move us away from carbon dependence, and do that in an economically sustainable way. Rural Johnny, Trevor and dBuckley are not denying that. They are in universal agreement it is not attractive from the point of view of utility companies. And I agree. This is something that will deny them the ability to charge premium daytime rates (and the peak demand in the evening if the homeowner buys a 1KWH battery to dodge the gouging they do for that period.

    What Trevor is not pointing out is that not only does microgeneration take money out of the pockets of the power utilities, denying them premium residential rates, but it has the down stream potential to take money out of the pockets of the big oil companies. This is where we must move if we are to end our insatiable demand for fuel that is destroying the planet. While you are at work, your car is being recharged by the solar on the roof of your workplace, and the wife’s car at home is being charged by excess power from the home solar panels. Transportation changes the load profile markedly. It also changes the profitability of home solar because now solar is not just saving 24 cents in power costs, it is saving $2.19 at the pump.

    And for that, it would be real real nice if we had a similar financial support program to finance the high initial cost of PHEV vehicles.

    None of this is in opposition to big wind, hydro or geothermal projects. Trevor thinks it hurts them because he views the chessboard as a zero sum game between technologies where non powerful pieces have no value simply because they don’t have the abilities of queens and knights. In fact the lower efficiency technologies make political efforts to fund and incentivize those projects more tractable. It’s called investing voters- getting them personally hooked into the political discourse on energy issues.

    It speaks not just to their heart, but their pocketbook. Which is a theme I will continually emphasize in this forum.

    I don’t think it escaped anyone’s notice that Rural Johnny never answered the larger question about why all green alternatives are far cheaper than carbon solutions. He admits that the hidden cost should be factored in, but declines to put a number to that because it forces him to put his cards on the table. If he puts the number too low, he can easily be painted for what he possibly is- a climate denier. Put the number too high and he is forced to abandon the theme that Green means being naive about economics. On the contrary, Green solutions inherently more economically responsible, sensible and practical solutions, leaving carbon solutions supportable only by profiteers, shills and sociopaths.

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  38. Once again John Messerly is labelling rural johnny and myself “sociopaths” for pointing out the technical limitations and costs of home solar power. His behaviour is more sociopathic. Only a fool or a sociopath sets out to make enemies of his potential allies.

    John has failed totally to address the issue of meeting our electricity needs on cold, winter nights. His one contribution to this is the idea that a 1kWH battery can meet some of a household’s evening peak power requirements yet fails to look at the costs of doing so – costs which exceed the cost of the electricity saved even at $0.25/kWH.

    If the electicity utilities are required to meet the winter peak demand but are not going to be paid for running their generators during the day, then they will look at cheap generators with high fuel costs rather than expensive generators with low fuel costs. Can you guess which generators are which? Yes, John’s approach will push the generators towards more fossil-fueled peaking plants rather than renewable generation – and he accuses rural johnny and myself of supporting the carbon economy!

    Trevor.

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  39. John says:

    The dBuckley’s … of the world…

    As John seems to be the mater of misstating other peoples views, let me state what my views are, so there is no possible confusion.

    The dbuckleys of this world are very happy for homeowners to have their own power generation, be it solar or otherwise, and always have been.

    The dbuckleys of this world require of grid-tied generation:

    a) That such a home generation system is safe, and does not cause additional risk to anybody. This is already the case because of AZ/NZS 4777.2. It is already an offense with substantive fines to connect non-compliant equipment to the grid. I would go further and if injury or death is involved then add jail time to the penalties available.

    b) That such a home generation system does not interfere with the existing supply networks. My approach on this is that it is assumed that a domestic installation will, for network planning purposes, on average, put a 3KW load on the grid. Thus a system that can generate up to 3KW is unlikely to cause bother to existing infrastructure, and should be permitted with little more than a rubber stamp. Systems larger that 3KW will probably require additional engineering effort from the lines company, and that actual cost should fall on the connectee.

    c) There should be no unnecessary barriers to entry to such generation. It is my opinion that the regulations brought in under ESR 87 are excessively stringent, and thus are a barrier to entry, and as such should be slightly modified.

    d) There should be no additional cost to non-generating customers due to the presence of generating customers. Thus any contribution to the grid, and thus cost to the utility to supply that electricity should be on a level playing field basis, so the unit price paid for excess electricity generated should be no more than the wholesale cost of electricity plus the avoided transmission charge.

    So there you go, knock yourself out. As I have illustrated, I’m fully in favour of homeowners generating their own power. But, as ever, I am not in favour of wealth transfers, and in particular, wealth transfers outwards from those with the least ability to pay.

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  40. Back in 2007, on this very blog, I stated this:

    The bottom line is it doesn’t actually matter what the KWh cost of the power produced is, for there to be any substantive uptake in house or factory based distributive generation (which is where PV can make a difference) you need to persuade the customer to switch from on demand, pay as you go electricity costs to self-financed capital investment. For most residential households in NZ, thats not going to happen. Most folks today can save a third of their power bills by having solar hot water heating, which has a reasonable payback, but they can’t or won’t.

    At a government policy level it frustrates me that there is endless capital available to build new power plants and new transmission systems, yet at best token support for initiatives like solar hot water that will reduce, postpone, or remove the need for more infrastructure. The government – once – had the foresight to build a national electricity infrastructure without direct cost to the consumer, but modern government lacks that will or foresight.

    Since then, the price (as in price per watt) of PV has come down dramatically, whereas the price of solar hot water heating hasn’t. It is now looking like it is cheaper to have solar PV and use the power generated to heat hot water, than to use traditional solar hot water.

    Also since then, we now have this Greens proposed policy to attack the “self-financed capital investment” issue I mentioned in the quote.

    So things are changing, and changing for the better. But the Greens policy will ensure that it is the case that “For most residential households in NZ, thats [as in generating their own juice] not going to happen”. The Greens talk about 30K homes, a tiny fraction of the households. Which is a long way short of the “substantive upatake” I wrote of back in 2007. And they will be the more affluent house owners, who can commit to the plan, and these people will probably already have a lower essential electricity use than the poorer of society.

    So despite the new potential policy, and improvements in technology, nothing really will have changed since I wrote the quoted statement in 2007. This isn’t a solution, this is PR.

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  41. One of the justifications for the Solar Homes policy is that “Families get reduced power bills and more …”

    On the face of it, that appears true enough. By how much will power bills reduce?

    The figures in the policy document states “A … 3KW solar array … produces $1,000 of electricity a year at current prices.” As determined in an earlier post, that $1,000 relates to a current price of $0.28 per unit. If all of the solar panel generation were either sold at that price or offset purchases at that price, then annual power bills would reduce by that $1,000.

    But it is not the case that home gen will be sold at that price. Neither is it the case that all 100% of home gen will offset purchases at that price.

    The typical NZ home consumes almost 8 MHr per year. That is roughly 1KW of continuous generation. But the panel generates 3KW only when the sun shines. So in the day time, when people are away at work and typical domestic loads are close to zero, that 3KW is excess generation and for grid-tied installations, can only be fed in to the grid. Some people will use load shifting strategies to utilise that excess generation but most will just let the system do whatever it does.

    So what price will generators buy that ‘excess’ home gen at?

    It is not sustainable for power retailers to simply spin the meter backwards so the remaining (if any) generators that buy home gen at the same price they sell at, will cease the practice. Currently home gen is purchased by the generators at $0.12 to $0.06/unit.

    Therefore, for every unit of excess generation sold (at say $0.12), it must be re-purchased at a different time of the day and at the more expensive price ($0.28). For these people, the value of the electricity generated is less than “current prices”.

    Therefore, the benefit to households will vary between $1,000 (where 100% of the home gen offsets grid purchases) to around $420 (all of the home gen is sold to the grid at $.12/unit).

    Factoring in a future reduction of the sell price to $0.06/unit, that benefit falls to $210 pa.

    Given the homeowner’s cost is $900 pa over 15 years, this Solar Homes policy will not give most families a net benefit. For many, it will cost them up to $690 per year.

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  42. John Messerly: Oh there is so much that is wrong with your meandering, self-indulgent and insulting posts that I want to respond. But I will not. There is no point to doing so. Your past counter-posts tell me that you do not listen to understand what others are saying, but only to shoot others down with your bumptious opinions.

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  43. @dbuckley:

    “This isn’t a solution, this is PR.”

    Absolutely agree. This is indicated by the target market (homes with families), the apparent reason for launching the policy (envy) and the appeals to emotion that justify it. Which is a shame because NZ so desperately needs an alternative to the increasingly centralised big-business focus of John Key.

    There is a germ of an idea coming out of this discussion thread. Instead of subsidising the installation of solar panels, a policy that commits to purchasing excess home gen (whether solar, wind, micro-hydro, bio-powered,…) at an attractive price (say $0.18/unit) would enhance the economics of home gen significantly. Then let the market do its unfettered magic. The impact on the major generators needs to be thought through but the concept appeals at this stage.

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  44. dBuckley please. You defended two climate deniers last week with a tautological statement that the IPCC report says what it says, and were unwilling to support my characterization of what the IPCC report really said.

    I showed that the way they were portraying the report and the issues was warped. I was not mischaracterizing their position in the least, and demonstrated this with direct quotes from the report. After which the deniers were silent as were you.

    Passivity in the war on the carbon economy is not an option. Where has laid back support for Green energy sources gotten us? Since dBuckley’s enthusiastic support for solar water in 2007, we along with the rest of the world have fully participated raising not decreasing Green House Gas emissions. We are moving dramatically on emissions, but it is in the wrong direction. Those emissions are accelerating, and it is fueled in part by our consumption from countries who are fully invested in that acceleration. For all the faint support for solar water, smarter light bulbs and insulation, so called progressives sip their chardonnays and pat each other on the back for a job well done on climate but stalwartly refuse to phase in some sort of system to make carbon products cost what they really cost. The excuse given is that these will hurt the little guy.

    So what exactly in the Solar Homes policy will hurt the little guy? Why not be an enthusiastic supporter of this policy? What exactly in the position Gareth is advocating violates any of the principles DBuckley enumerated? Just as with Rural Johnny, we don’t know because he didn’t say.

    DBuckley gravely adds that he is not in favor of wealth transfers as if Gareth’s proposal represents one. So let’s confront the ideological red line head on. Let’s ask this simple question: If the carbon economy involves substantial wealth flowing into the hands of those who control fossil fuel energy sources, then doesn’t deconstruction of the carbon economy involve a wealth transfer when we tilt the economic playing field in favor of a green economy. Specifically, when we seek to introduce the hidden costs of those fossil fuels into the equation, doesn’t this mean that less wealth will be flowing to the oil companies? Can’t it be painted as a “wealth transfer” if that those fees from those surcharges are redirected into funding for green projects. You bet it will be portrayed that way.

    Yet that defunding of carbon economics must take place if we are to avoid the calamitous costs due to rises in global climate that scientists agree are likely in this century. To hear dBuckley speak, he would oppose aiding the financing of the purchase of PHEV cars because use of crown borrowing would tend to come at a cost to other needs for crown borrowing. Subsidies funded with surcharges on petrol would be out of the question because owners of petrol cars would be having their wealth transferred to owners of green cars. That’s the way the carbon economy likes to frame the debate on alternative energy sources.

    They enjoy portraying Greens as those interested not in climate change but in wealth redistribution. They hide behind that rhetoric.

    It’s time for the cowards to be painted for what they are. They would play games of sophistry while likely outcome of our carbon consumption means that our children will be paying the formidable bill we are racking up for them. Those are the people who are least able to pay. The generations who follow us who will inherit a New Zealand far less bountiful than it is today.

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  45. So what exactly in the Solar Homes policy will hurt the little guy? … What exactly in the position Gareth is advocating violates any of the principles DBuckley enumerated?

    The Greens plan violates item D, “There should be no additional cost to non-generating customers due to the presence of generating customers.”

    If an electricity utility pays you (say) 12c per unit you feed to the grid, and $6c (plus a bit for transmission) per unit it gets from the big generation, then that 6c difference has to come from somewhere. So of the 12c per unit you pocket, 6c is rightfully yours, and the other 6c comes from people who don’t have panels on their roof.

    How to fix this problem?

    You get paid the correct price for what you contribute, which is the wholesale cost of electricity plus the avoided transmission charge. Or a bit under $7c/KWh.

    Now if you have panels on your roof ‘cos its the right thing to do, then getting just 6.something c/KWh is fine. If you put panels up for financial income, then you will be disappointed.

    If you need to have an enemy here, it is that we are blessed with a huge resource of low cost hydro electricity with sunk costs, built with taxpayer money. A resource that was adequate just a few decades back to make us 100% renewable most of the time.

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  46. With the discusion of costs to the consumer, we need to look a little wider. The usage reduction of alternatives, even during the day, if encouraged to sufficient levels, must give the poower generators several savings in capacity/capital. One is the storage of water for the peak loads that come outside of sunshine hours, the other is the savings in transmission waste. These savings are improved with a diverse mix of generation alternatives.

    This is all negated by the present ownership structures of parts of the system. Companies who have different parts of the generation system will have varying savings and losses in tariffs because of this ownership structure. A huge part of this structure was paid for out of my and others taxes. But the sale of parts has now turned a system that could be integrated for the common good, in all senses, makes winners and losers. All because of a transfer of the common good to the use of wealthier investors so they could make a profit from the tariffs. This gives the impression that their are winners and losers out of looking after the common good, but maybe the investors that loose and want to pass their losses on to the consumer as tariffs are just not taking the losses from their selfish indulgences in monopolisation.

    The situation we face could be seen as proof that the capitalisation of the common is not really a saving of efficiency.

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  47. The usage reduction of alternatives, even during the day, if encouraged to sufficient levels, must give the poower generators several savings in capacity/capital

    Sadly, not much.

    The construction cost of a power system is related to the peak load the system must carry. The last few percent of the load represents nearly 10% of the cost of the network. However, the revenue generated by the network accrues only to the actual load.

    And this is where I start to get really annoyed…

    The really clever people who built New Zealand’s electricity network stretching back many decades understood this. And they sought to limit the peak power required by using ripple control to manage loads. One of the most advanced systems of control in the world, back in its heyday. By managing the peak loads they were able to significantly reduce the investment necessary in the electrical infrastructure.

    Fast forward to the so-called market reforms. The new market-driven folks didn’t want to reduce load, as load makes revenue. (For commercial customers part of the cost of the electricity supplied is based on peak load) So they wanted to run the network flat out for most revenue.

    Of course, there were tears, as the system was never designed to run like that. So, of course, investment was necessary to increase the system (peak) capacity.

    And of course, that investment required repayment, and that money came from… our electricity bills.

    And that is why our electricity is so fecking expensive compared to what it once was, and still could have been.

    Nevertheless, reducing consumption by improvements in energy efficiency directly reduces costs to consumers, and may will reduce the emissions due to electricity generation. We’ve got the built capacity now (albeit not all in the right places, and not runnable at the right time, so more stuff still needs to be built) so we’ll never get that capital back.

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  48. You say that new generation has to be built to cover the peak time, but the Capital won’t come back to the builder. Isn’t this the problem with new economic theory. The Capital is capital structure and the money is only how we are counting the reources used. The structure has it’s own intrinsic value, and much of it is not countable. If making that infrastructure improves the health of the community in the way it is used then there are savings elsewhere, but if it used to run another toy on the e-market then the extra cost is not noticed by the player but then is a burden to someone poorer trying to warm his/her kids. This is where the market can’t sort out the issues when there is a shortage of essentials on the market.

    Without fossil fuels we have such a shortage for the lifestyle large numbers choose, so minimums are needed to protect the essentials before luxury. This then implies a democratic debate over what is essential before resources are allocated, or we have an anarchic system where survival is at stake for the weaker.

    If we were guven a choice of the luxuries of our modern age, and the looking after our fellow man then I believe a majority would choosem the later. Yet, without debate new things are marketed via the media with little question until see consumers see the harm.

    TV peak viewing of the news etc. could be delayed, maybe even TV transmission turned off till peak power drops, heat storage could be subsidised, all then drops that need for that expensive peak power structure .

    While the return on capital for investors is an issue, this peak load will be encouraged instead of the things that make clean power a use to society.

    If what we see happening in Christchurch doesn’t show us the issue of adverse events (including weather) and the inability of our insurance’economic systems to cope, then multiply what we see by 20 to 50 for other more frequent probabilities and a picture is made.

    The redeeming thing is the great stories of people knuckling in and helping each other, humans need the right information to do the right thing, shame on those looking after their own interests when it comkes to climate change.

    Lets add to the initiative of solar power loans by adding all the other possibilities, as doing our bit.

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  49. You misunderstand what I say; the expenditure on new infrastructure has been made, past tense, and we the billpayers are on the hook for it. So even if we were to now turn back the clock and run the way we did, making some of this new infrastructure unnecessary, we as billpayers don’t get back our money on our bills. The money is now gone, never to return.

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  50. Wow- so what DBuckley is saying is that Contact energy’s cost of electricity is 7 cents and they are selling it to me for 26.1 cents? Someone please remind me who DBuckley claims is redestributing wealth from whom? Oh yeah- he thinks that my neighbor were paid more- 12 cents with solar panels then he would be stealing from me because Contact energy would be getting only 100% profit on the 12 cents they would be charging to ship electricity 100 meters to my house. Instead, DBuckley proposes that what is fair is that Contact energy sell solar electricity at over triple what they pay for it. And he claims that the solar producer being paid a reasonable feed in tariff that is typical for green nations- they would be ripping off non producers because retailers would be getting only 100% profit. Wow. Is he giggling as he types this stuff?

    In any case, he did not read the Green proposal because it clearly states “The rapid uptake of solar power in other countries has been driven by significant Feed-In Tariffs that pay homeowners more than the market price for electricity that they produce. The Greens do not think that is the right choice for New Zealand. We can support solar without subsidies.

    File dBuckley’s response as an example of lazy thinking/ defense of retail market price gouging. So let’s not let DBuckley put words in the mouths of the Green party. They are not proposing feed in tariffs, so it does not violate his principle D as he claims.

    All he is saying is that they won’t save money. But even Rural Johnny admitted they would even with extremely skeptical assumptions. So let’s look a little closer at dBuckley’s bogus numbers.

    Contact Energy just sent me a sympathy letter. They regret to inform me that that Orion has increased their rates for access to the local lines that feed my house- and are therefore Contact must jacking up their rates by 1.4 cents. They really didn’t want to do it, but life is rough- they hope I understand. So here we have DBuckley claiming that the savings for the solar power coming directly from my neighbor without use of the the distribution lines is just 1 cent. Sorry- the savings are well in excess of 1.4 cent, because they just jacked them up that much.

    DBuckley uses Rural Johnny’s number of 6 cents as the assumed average wholesale rate. Is that fair? I’ve already addressed this- Of course it is not fair. Trevor is correct that the load profile does not match up perfectly with the supply profile of solar, but daytime spot wholesale rates are a lot higher during the day when people are awake performing their activities. The spot rates are very low during the night and follow demand. So let’s look at that. What would be a fair rate for summer daytime when solar panels would be cranking out lots of power? Assuming auckland’s load profile for summer is something like that of California, an average rate of 6 cents is pretty unfair. Look at that huge demand during daylight hours. Why should solar guys be paid a number averaged in with the night time low rates coincident with low demand? So really, regarding a wholesale price based scheme, the fair metering rate for microgenerators ought to correspond to hourly spot rates at which electricity is being sold to local distributors during the precise hours that the solar panels are generating power.

    But let’s get back to the triple return on cost of product. There are several solutions to such gouging, but it is reasonable to assume that microgenerators will always get this kind of shaft from retailers? What if customers were allowed to split their purchasing to two vendors? I could keep my Contact account, but my preference is to purchase power from a state run corporation similar to KiwiBank/ NZ Post who distribute microgenerated green power near me. The deal is that I would pay KiwiPower whatever rate Contact is charging as long as the microgenerator providers get half of it. If no such power is being clocked out in my area, then I pay Contact their energy.

    Or maybe KiwiPower does everything for me since their charter is to extract no more than a 10 percent margin.

    If private enterprise is really more efficient than state run enterprises, then they can compete for that microgenerated power.

    Finally, people who make such are choice to become a microgenerator are not doing it to feel good. They are doing it because it is our responsibility to wean ourselves from carbon. NZ needs more alternative power and this proposal delivers some. NZ needs programs that are economically sensible and this proposal would save home owners money even if the skeptical numbers of 6 cents per KWH are assumed. But really these skeptics are just unhappy that the wealth redistribution engineered by NZ’s 1% will be chiseled into by a few thousand responsible Kiwis.

    It is insufficient that the 1% owns more than double what the 50% of the least wealthy Kiwis own. The 1% wants more, and National is delivering it via ever higher energy bills.

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  51. John – do you have to use so may words to say so little?

    All he is saying

    Again you are attempting to restate me, and again, incorrectly. Must you continue to do that?

    6c is taken as the average wholesale price of electricity. Although – today – pricing is driven by spot pricing, and the actual cost can very between, well, about zero/KWh and $$$$$$/Kwh. So the right answer – today – is spot pricing plus transmission saved. BUT… if NZPower comes to pass then apparently that is all going to be past tense. And a jolly good thing too, in my opinion.

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  52. I am simply pointing out your misrepresentations and faulty numbers.

    Great. You concede that Solar Homes makes money for homeowners. You assert it would not be much if one were to use the 6 cent figure which you agree is too low. You further agree that aggressive competition spurred by a proposal I suggested would allow producers to save considerably more on their power bills.

    But I didn’t hear a retraction of your assertion that Solar Homes violates the principles you enumerated. I believe even a cursory reading of the Solar Homes document reveals that that point was a misrepresentation.

    It seems to me my generous verbiage fell on receptive ears, seeing so many reversals of your ill thought out arguments. Perhaps spending more time considering your position more carefully would be time well spent.

    Really, the Green MPs are far more sensible than either National or Labour. Perhaps it is time to apply your mind towards a more aggressive posture towards climate change. In the worst case, you can lay on your death bed satisfied that although the children following us inherited a significantly warmer, less productive and more dangerous world that at least you did everything in your power to avert that outcome.

    Not because it felt good, but because you are a responsible person.

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  53. Will solar power increase New Zealand’s renewable electricity generation (clean energy) and reduce our use of fossil fuels as claimed by Johm and Gareth?

    New Zealand’s average electricity usage is around 5GW, a bit higher in winter which we can ignore because there isn’t going to be much solar generation then. A significant amount of our generation is must-run or use-it-or-lose-it, including some of our hydro (no dried up rivers!), geothermal and wind. If we install more solar than the difference between this generation and the 5GW demand, then we are going to have to store the rest or waste it. I don’t have a total for the must-run generation, but as a starting point, let us assume that 2GW is geothermal, must-run and wind. That leaves 3GW of solar generation – 60% of our needs. Great. We can achieve 100% renewable generation with that can’t we?

    Well, no. That 3GW has a capacity factor of the order of 15%, so it is only going to average 450MW. We are achieving 75-80% renewable power now, so we need another 1GW or so, so solar power isn’t even going to meet half that need. What if we double the amount of solar? Well we get closer, but only if we store the excess power with pumped hydro or some similar scheme. That will work, but now we need 6GW of solar plus 3GW of pumped hydro, and we still can’t guarantee to keep the lights on in winter.

    So what is the problem and what is the answer? The problem is that 15% capacity factor, and the low output in winter. If we harness renewable energy with a higher capacity factor, we don’t need as much of that expensive pumped hydro scheme to handle the excess, and we can use the renewable energy directly more of the time which boosts efficiency.

    So which forms of renewable energy have a higher capacity factor? Pretty much any other form of renewable energy with the possible exception of biomass, and biomass is dispatchable, i.e. we can choose when to use it.

    Solar isn’t the low cost renewable solution to our electricity needs. Wind and geothermal are much better options. A small amount of solar power to help meet our summer irrigation and air conditioning demands will probably not cause any issues, but large amounts of solar will be wasted much of the time.

    Trevor.

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  54. Your question was, “Will solar power increase New Zealand’s renewable electricity generation (clean energy) and reduce our use of fossil fuels as claimed by Johm and Gareth?”. Sure, you can make a case that there are more solutions that deliver more bang for the buck. But- Does it increase renewable energy generation? You did not disprove that. Can it be a piece of the puzzle to how we get ourselves off fossil fuels? You didn’t disprove that either.

    We clearly don’t agree on the scale of the problem. Our problem is NOT a 15% capacity factor in our electricity system. The problem is that 70% of NZ’s energy supply comes from hydrocarbon sources, and this must end otherwise we will suffer massive economic consequences on a global scale. If we are to replace them entirely, then we are not talking about fractional increases in capacity. We need to triple generation.

    And the “Market” in its infinite wisdom is not going to lift a finger to build this kind of capacity because no one expects individual companies to be motivated by such a large scale social and economic challenge. They do what we designed them to do: respond to profit opportunities and avoidance of unacceptable costs that will materialize in periods measured years, not decades or centuries. That’s why arguments that believe the Market is some sort of Messiah that will address this problem are fundamentally flawed.

    I appreciate the engineering argument you are attempting to make but an unbuilt optimal solution is 0% efficient.

    Trevor, your approach is to
    1) identify a single most optimal energy source from an engineering perspective.
    2) deprecate any other approach that does not agree with your reasoning.

    Such intolerance makes you a good tool of the carbon economy to keep the alternative energy community in disarray fighting pointless internecine battles. If you want to advocate building more hydro, there is a lot of untapped capacity there, so I am for that. That doesn’t mean I am unsympathetic to arguments about its weaknesses. Yet I will be right there with you defending your proposal as stalwartly as I am defending Solar Homes. Others favor greater wind capacity and I am for that too. Don’t mistake my advocacy of multiple technologies as lack of appreciation of technical merits. My career was in engineering and I am pretty comfortable with analysis of practical and optimal solutions so understand that I can appreciate your point of view. However in my experience, identifying the optimal engineering solution is really pretty trivial compared to the political and economic barriers to getting a project built.

    Let me say it again: An unbuilt project is 0% efficient. To get it built you have to confront the practical problem of building support for it. You aren’t going to get there by promoting one approach over all others as if the problem is to come to consensus on a single optimal approach. The futility of that exercise is precisely why carbon advocates aggressively search for advocates who take your approach. You become an unwitting ally to maintain the status quo of inaction on climate change.

    If you must have a religion, let it live by the maxim not to speak ill of other alternative energy proposals. We are few in number, and united we are far far stronger. My defense of solar is not some sort of religious position that overlooks its weaknesses or its lack of ideal fit for meeting the practical immediate challenges confronting our national electricity system. It is one of many technologies and none should be central above all others to our alternative energy buildout.

    I am of the school of “all of the above”. So long as an approach will survive on its own merits and people are ready to build it, I am for it. Really- it seems to me that your approach of “my way or the highway” is not practical from either a political or an economic perspective.

    I have already pointed out that what is efficient from an engineering perspective is oftentimes inefficient from a political perspective. No one is talking about 30% solar. We are talking about a program that saves consumers money, increases carbon free generation capacity, and is economically practical. But here is something it does have that utility scale projects don’t: it invests voters in power generation. If you look at the political terrain necessary for large national scale collective investments required to get ourselves off of carbon dependence, then we need many more voters who see that as an important goal.

    People aren’t going to vote for your project simply because you have developed an unassailable engineering argument. That’s not the way it ever worked in corporations I worked at.

    If you would like to discuss other energy solutions, I would find that very interesting but it seems to me that it would be off topic.

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  55. John

    You’re lecturing us but you need to examine who you are on the offensive against here.

    Trevor did NOT identify a single approach and deprecate all the others.

    I didn’t do that either, nor dBuckley nor rural Johnny. NONE of the people you casually labeled as “deniers” are anything of the sort. When one of them shows up here we usually make short work of them, but I haven’t seen one in donkey’s years.

    The despised “market” is in fact the tool we HAVE to use because politics is the art of the possible. What does an ideal solution that we cannot implement get us?

    Slow up. Think about where you are going with this. You owe a fair few people apologies already. We’re all understanding enough to cope but don’t make the mistake of underestimating the people here. Most aren’t even Greens. I am but there isn’t a method of knowing on this blog. On the party internal blog one knows.

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  56. Those making economic arguments have been making condescending posts about how the Solar Homes proposal is some sort of naive feel good green policy that is ill thought out both from a practical, economic, or engineering perspective. MPs cannot be rude and confront those who engage in the typical messaging used worldwide paint Greens as naive tree huggers with uneducated and overoptimistic notions about economics, engineering, and reality in general to be trusted with power.

    “If this is an example of smarter, greener economics in action, then we are all stuffed, consigned to be remembered as a race who saw the problem (climate change) but remained focused on the politics of greed and envy, doing too little, too late.”

    The politics of greed and envy? Is that polite? Is that fair to Gareth? I think not. The following post, Trevor comes in and gives aid and comfort to the notion that this is not smart economics. Standing MPs cannot say these things about the condescending rubbish that gets piled on their hard work. Frankly, from what I have seen the Green MPs are far more civil and kind that I could ever manage.

    I recognize that I am making no friends but really comments like this must be shown for what they are. But do you really mean “Slow down?” Wake up. After ten years of effort where has going slow gotten us? NZ is increasing not decreasing its emissions. Labour is out there declining to block drilling. If you are concerned about rudeness, how polite will future generations be towards ours- our generation who had the opportunity to do something about our 70% consumption of hydrocarbon energy sources and yet were more concerned about decorum and not ruffling each others feathers?

    I don’t think you understand how rude those generations will be if we hand them a planet with 6 degrees of warming.

    Am I looking for enemies? No. We know we are addicted to fossil fuels, and like any junkie we will engage in any tactic to delay and decline to do anything substantial about our addiction. We are the enemy, and I am just as culpable as everyone else here. Going cold turkey will not be pretty.

    Deconstructing the carbon economy is going to do a lot more than ruffle people’s feathers. Billions of dollars in profits are at stake. If this interaction has been a little bit hurly burly, how do you think it is going to get when members of the status quo actually feel threatened?

    I appreciate the call for assuming good faith on the part of others. I am more interested in keeping focus on making more aggressive efforts and I have little tolerance for misrepresentations of Green positions. I am just a single voter and so I can make lots of fiery posts and mainstream Greens can be free to distance themselves from things I say. I don’t care. I am not here to make friends with them either. I want to save the planet, and there is a place in the mix for angry dogs nipping at the heals of those putting Greens on the defensive with nonsense posts as we have seen in this thread. If I ever have any intention to standing for political office, you will know it when I decline to display my umbrage at the rubbish being piled on honest Green efforts like Gareth’s.

    As a postscript, please note that I don’t despise the market at all, and regard the attitude as somewhat absurd- as if one would despise a hammer. It functions as designed. It goes where we point it. As I explained, I am for tilting the playing field so that the market will pursue desirable outcomes. Instead of the market gaming government, industrial policy needs to game the markets. The proposal I mentioned to dBuckley- of introducing a state owned corporation to compete in the retail electricity markets will curb their tendency to engage in tacit collusion. In another thread, dBuckley correctly pointed out why it is that our retailers are so successful in the tacit collusion to gouge customers. It is barrier to entry. Rather than engage in ham fisted command control techniques like wage and price controls, game theory counsels intervening in indirect ways. dBuckley gave the example of how 2 degrees introduced real competition that the major players were unwilling to engage in. The state can intervene in a similar way to introduce real competition in the retail market if no “2 degrees” company shows up to do so.

    My foot is hard on the accelerator. I don’t think we can afford to wait around. We need massive new generation projects, and high retail prices can be used to demonstrate a reliable revenue stream justifying that that generation buildout. Let the major electricity generators compete with big oil. That is a battle Kiwis will win due to their ingenuity and backbone.

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  57. John Messerly thinks that the Solar Homes policy is economically sound. I would question that.

    For a 3kw solar PV system with 15% capacity factor, the cost is around $10,000. The output averages just 450 Watts, so that is around $22 per Watt of average power output. This is injected into the local grid, so losses are lower than for power generated from a big utility. I think a 10% adjustment might be generous, so let us call the output equivalent to $20 per Watt of utility-generated power.

    Mighty River Power’s Ngatamariki geothermal plant cost under $475M and generates 82MW. That is $5.80 per Watt.

    Contact’s Te Mihi plant cost $750M and generates 166MW at $4.50 per Watt. The Te Huka plant cost $100M and generates 23MW at $4.40 per Watt.

    (I haven’t adjusted for the capacity factors of these power stations because the capacity factors are >95%.)

    So John would argue that we get cheaper electricity by investing in Solar PV systems that generate electricity only part of the time and not when we need it most (winter evenings) at a price per Watt of average power output around 4 times that of geothermal plants that run 24/7 and can be relied on (as much as any power plant) to generate electricity when we do need it most.

    Beats me how that can be cheaper.

    Trevor.

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  58. Solar power has bright future but wind power cannot be ignored at all. Those countries which are near seas can also take benefit from wind energy.

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  59. John notes:

    But I didn’t hear a retraction of your assertion that Solar Homes violates the principles you enumerated.

    At this time, you wont hear a retraction that the policy violates point D, simply because the statement is factually correct. And I don’t believe you’ve argued it isn’t true either.

    In “Solar Homes Green Party Policy paper”, the Green Party states:

    Under this plan, the Electricity Authority will create a default contract allowing households to sell their power to retailers, setting a fair and reasonable minimum price between the retail and wholesale electricity price.

    Currently, families with solar power are subject to one-month contracts that change on the whims of electricity retailers. The Greens will provide stable, fair, long-term contracts for families that produce their own electricity

    When ones sees an animal that waddles, and quacks, one might reasonably assume it were a duck. An electricity price that is “between the retail and wholesale electricity price” may not be called a feed-in tariff, but applying the duck test, it sure quacks like a feed-in tarrif.

    So, the facts are (a) some generators will be preferentially paid more than the average price that the retailer pays for electricity, and (b) retailers are not (and indeed, shouldn’t have to) going to aborb that extra cost to them. Thus the only reasonable conclusion is that the price of retail sold electricity will increase.

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  60. have been making condescending posts about how the Solar Homes proposal is some sort of naive feel good green policy that is ill thought out both from a practical, economic, or engineering perspective.

    Yes.

    At best the solar homes project will create (30K x 3KW) = 90MW of generation, and that generation is daytime only, non-dispatchable, and intermittent. So although a long way from useless [footnote 1], its not a huge dent in the country’s (round number) 5GW high-average consumption. And its lack of reliability increases the size of frequency keeping needed, though not by very much.

    Bigger question: Are the Green Party in favour of energy from renewable sources? One would instinctiuvely think the answer would be “yes”, but the actual answer is “sometimes”.

    One would think the Greens would support a renewable energy solution that would generate 540MW of dispatchable, reliable, renewable energy, would not one. But the Greens railed against such a scheme, and were “delighted” when it was cancelled [footnote 2]. The Greens state we have The right to disagree with clean, green wind energy

    So the reasonable conclusion is the Green Party only support renewable generation when the mood takes them.

    As a Green Party voter (last time!), the Green Party often disappoint me.

    1) Intermittent energy sources will be more useful when we have electical storage available to make use of this energy. The most likely source of significant storage will be the batteries of electric vehicles.

    2) Every Watt of energy that isn’t generated renewably is generated by burning fossil fuels. So by opposing more renewable generation, the Green Party supports (present tense) burning more fossil fuels. For a party that is supposedly about the environment, that is a strange place in which to be…

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  61. I agree Kamran.

    Meridian’s project West Wind has a peak output of 143MW and a cost of $440M, or just over $3 per Watt, less than the cost of the Solar Homes PV systems being promoted here. However the capacity factor is much better – around 40-50% or about 3 times that of the PV systems, and more of the generation is in winter or during peak consumption times. Not all wind farms can expect such a high capacity factor, but there are plenty of windy sites in New Zealand where 40% or more can be achieved.

    There are many consented wind farm projects ready to go but the gentailers aren’t proceeding because “the economic conditions aren’t right”, which can be loosely translated as “the price of CO2 emissions isn’t high enough”, as the government subsidises the costs of the exploration for more fossil fuels.

    Trevor.

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  62. I just received the following link from the Transition towns newsletter. I haven’t had a chance to check it all out but it seems a very relevant discussion from a Seminar on Sustainable energy planning http://science-and-energy.org/?page_id=298 is the list of papers given

    Since research shows consumer buy in of ethical choices is a progrssive process then I support Gareths policy as a way of gettting public acceptance and buy in – a progression from insulation support. All the other more complex scientific answers and solutions can be advancements. Technicality is a big turn off to the average punter, So a less perfect solution that starts us in the right direction has value, a process seen in so many true advances in society.

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  63. There are many consented wind farm projects ready to go but the gentailers aren’t proceeding because “the economic conditions aren’t right”, which can be loosely translated as “the price of CO2 emissions isn’t high enough”

    I don’t believe that it is carbon charges (or lack thereof) that is the “economic conditions” to which the genetailers are referring; I suspect it is that the country’s electricity consumption, which, after straight line growth pretty much continuously since the “reforms”, has, well, stopped growing, and thus there is no immediate need to continue to build generation.

    Pretty graphs [here].

    Perhaps the price is sufficiently high that consumers are starting to manage consumption?

    If carbon charges were lumped onto the appropriate parts of the supply, I don’t think it would make a difference to building or not building, as the genetailers will just pass the additional carbon costs (plus profit, of course) on to consumers.

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  64. DBuckley: “So, the facts are (a) some generators will be preferentially paid more than the average price that the retailer pays for electricity”

    This policy paper makes no specific proposal for pricing for electricity generated by people with solar panels on their roofs. DBuckley is confusing his nightmare speculations about what form the pricing might take as a fact. It isn’t a fact, it’s an assertion about another policy that is not the subject of the Solar Homes proposal. DBuckley asserts that the Greens are lying and that his speculation is fact- that this single sentence can only mean a feed in tariff in sheeps clothing. Even if inferences were facts, the inference is weak because there are other plausible forms that would not amount to a Feed in Tariff. For example, the Greens might propose a policy that simply organizes the individual suppliers into a collective so that they can negotiate sell prices collectively in order for them to be on a more equal footing with large generators. Would this amount to gaining more than the average price paid by retailers and DBuckley asserts? Yes, and I have shown why- the wholesale rates during the day are higher when solar is being generated because there is more demand then. I refer interested parties to take a look at the load profile I cited above. DBuckley does not contest the point that solar generators should get paid the fair rate corresponding to the wholesale prices at the hour the power is generated, not a rate that averages in far lower nighttime rates when home owners are not generating electricity. Yet dBuckley circles back to his flawed rhetoric about average rates as if there is no use in pointing out facts to him.

    Next, DBuckley characterizes the Greens opposition to Project Aqua as categorical opposition to utility scale hydro projects. Is this fair? He likely knows that the Greens have supported large Hydro projects, and he likely understands the reasons given for the opposition to Project Aqua. We don’t know for sure. But you have to wonder what purpose there is in distorting Green policies after repeated corrections.

    Maybe his fears about wealth redistribution, and hidden agendas are misplaced. Maybe he should fear more the consequences of climate change. Because a global temperature range in the range of 3 to 5 degrees is judged to be “likely” by a consensus assessment of IPCC scientists. That doesn’t make it a fact, but such a consensus assessment does put the burden of proof on those who would oppose new projects that do generate more green electricity in an economically sustainable manner.

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  65. Trevor-”Beats me how that can be cheaper.”

    Once again, Trevor shows why it would make sense for a utility to build wind, hydro or geo and not solar.

    Homeowners would see lower electricity bills, and the only disagreement with dBuckley and rural Johnny is how much lower it would be. But it would be lower, and the panels would be paid off without subsidies. So it is economically sustainable, and it does provide a lower electricity bill for a homeowner.

    If it beats Trevor how a lower electricity bill means electricity is cheaper for the homeowner, then perhaps he is to accustomed to looking at energy infrastructure improvements from the perspective of utilities, not voters. But as I said before, I am 100% in for the projects and approaches Trevor advocates. I take great exception to his point of view that this is a zero sum game between different projects. Advancing Solar Homes does not come at the cost of advancing other green energy projects as DBuckley and Trevor seem to fear.

    If there is such a cost, then they have not shown how this is so. What I have pointed out that there is only a benefit, because enlarging the number of stakeholders in green energy decisions enlarges our power base. It is no longer an academic question to average citizens. It affects how much money they have in the bank from month to month. And when National or Labour make bad green energy decisions, they are much more invested in paying attention, because such decisions affect them in a direct, immediately perceivable way.

    Technocratic consultants often miss these factors. To them, they are outside the economic and technical parameters they feel can be quantified.

    Unbuilt utility scale projects are zero percent more efficient. The way they do get built is when they enjoy widespread support by green voters who accept that these projects are being built in a way that is sustainable and do not ignore environmental constraints.

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  66. This policy paper makes no specific proposal for pricing for electricity generated by people with solar panels on their roofs.

    The policy paper “Solar Homes Green Party Policy paper” certainly does make a specific proposal, and I quoted it, and even emboldened it. Here it is again:

    Under this plan, the Electricity Authority will create a default contract allowing households to sell their power to retailers, setting a fair and reasonable minimum price between the retail and wholesale electricity price.

    This isn’t “nightmare speculation” or even “an assertion about another policy”, its a straight quote!!!!!

    Thus you cannot argue that the price paid by the retailer for home solar generated electricity won’t be more than the wholesale price, because the Green Party says, in black and white, that it will be.

    There is space for difference of opinion about what the “wholesale” price means, no doubt about that. However, the NZPower policy makes it clear [footnote 1] that the wholesale price is intended to be lower than it is today.

    1) quote: “A single buyer called NZ Power mandated to drive down the average wholesale power price”

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  67. DBuckley’ “thus there is no immediate need to continue to build generation.”

    The reason? There Market tells DBuckley what NZ needs. In his mind, that is the final authority. Never mind that scientists say that a rise of 3 to 5 degrees is likely and that it will have catastrophic economic consequences.

    The market will never demand the changes necessary to the carbon economy- there are substantial market barriers to elimination of our 70% reliance on hydrocarbon sources of energy.

    Carbon taxes need not take the ham headed approach that dBuckley asserts they would take. In an auxiliary currency approach, generators would be paid a green energy credit proportionate to how free their emissions are of greenhouse gases. Hydro, wind and solar would accumulate these credits like crazy. Biomass, biodiesel and other such approaches would be net neutral and would accumulate few such credits. Fossil fuel producers would generate zero credits. These credits have value because the carbon tax must be paid in the form of green energy credits. This forces fossil fuel based electricity generators, drillers and fuel retailers to buy green credits from those companies who are generating green credits.

    By gaming the market rather than passively allowing the carbon market to game New Zealand, fossil fuel prices go up and green energy prices go down. The same applies to carbon fuel consumption taxes on the consumer side. Those fueling their vehicles with electricity generate green energy credits. Those fueling their vehicles with petroleum do not.

    I wait patiently for the accusation that this is wealth distribution. It is not. It is factoring in the unacceptable long term hidden economic costs of our fossil fuel addiction.

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  68. Next, DBuckley characterizes the Greens opposition to Project Aqua as categorical opposition to utility scale hydro projects. Is this fair?

    If your statement were true, then you could ask if it would be unfair. But it isn’t, because I have stated no such thing. Once again, you find words where none are present.

    …and he likely understands the reasons given for the opposition to Project Aqua.

    Not that I can remember, but, ultimately, it doesn’t matter. Here’s why, and again, let me quote you again:

    Maybe he should fear more the consequences of climate change.

    I do. And that is why I, and many other people who actually worry about the future of our environment, can find no reason whatsoever that the Green Party, supposedly an environmentally based party, would choose any reasons whatsoever to to burn even more coal and gas when we could instead use hydro.

    Let me be absolutely clear and unequivocal. It is my opinion, stated often, that man made climate change is real, and is going to have devastating effects on mankind.

    I would have assumed that the Green Party are made up of people who hold a similar opinion. Yet somehow they thought that burning coal was a better option than whatever other objections there might have been to Project Aqua.

    That, to me, is madness. And a few solar panels isn’t going to close the gap, either the madness gap, nor the renewable power gap.

    It is my opinion that Aqua has been postponed, rather than cancelled, and when the time is right, it will come back and be built. And every year we don’t have Aqua is (round numbers) another million tons of CO2 in the atmosphere.

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  69. The reason? [we dont need to rush to build more generation] There [sic] Market tells DBuckley what NZ needs. In his mind, that is the final authority.

    Again, making up stories. What I said was:

    I suspect it is that the country’s electricity consumption, which, after straight line growth pretty much continuously since the “reforms”, has, well, stopped growing, and thus there is no immediate need to continue to build generation.

    It is there in words of, at most, four syllables. New Zealand has, from Wikipedia, 9,862 MW of (utility scale) generation, and we use, at most, a little over half of that. At this moment we are using 4955 MW, it was a bit higher a moment ago. We are not actually short of generation.

    What we could do with is using less power, and then we could return to being close to 100% renewable, as we were not so long ago. We could actually use less power, if, as a nation, that is what we wanted to do.

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  70. John

    I’ve been here, and a Green, for 10 years. In that time there has not been any hydro power project proposed that I remember being supported in these pages, and I have argued a lot with people who would rather save eels.

    This isn’t my imagination or DBuckley’s, there is some serious obstruction from within the party, to anything that resembles a dam.

    Sometimes it is well founded, as the dams are simply expected to supply more farmers with more water to turn into more milk and sewage (which winds up in the river). With other projects though, the obstructionism is coupled with further attempts to thrust NZ back to into a more primitive version of civilization.

    I don’t regard that as constructive, I am dead certain that it isn’t electable and I have serious issues with the understanding that the proponents of such efforts have of the issues around AGW.

    It is however, the case that Greens opposed Aqua, and pretty much every other dam proposed in this country.

    If we really want to save all that pretty landscape we’re going to have to do better on ALL the other fronts.

    respectfully
    BJ

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  71. The discussion has gone in many directions since I raised my observation that the numbers for the Solar Homes policy do not stack up.

    Firstly, I demonstrated that the economics of each solar home does not stack up as an economic proposition. My numbers have been doubted but no one has produced any numbers to dispute mine.

    Secondly, I have shown that the social implications of the Solar Homes policy are negative for some households that will pay more in loan repayments (capital and interest) than they will gain from reduced power costs. It only takes one family to be financially worse off for the policy to be ridiculed.

    There is a third and a fourth aspect that determines the environmental credibility of the Greens.

    Third is that the Solar Homes policy does too little to address the causes of climate change. The policy is for a 3KW solar array in 30K homes over 3 years. The 120 GWh the policy will generate per year (after 3 years), is 4.4% of the coal-sourced generation or less than 0.4% of total generation in 2012. A policy that addresses the source of pollutants from coal generation would be a grand and inspiring objective, except perhaps in Huntly and the West Coast.

    The fourth aspect is around energy return on energy invested (EROI). It is a still-controversial area but to those that do seek to discredit green initiatives, solar pv is not a strongly green solution to our energy crisis. The determination of the numbers for that subject will have to wait for another day.

    These, like my other criticisms, says nothing about the need for renewable electricity generation, the desirability for solar pv, nor my views on climate change. They speak only to the credibility of the Green party. My desire is that the Green’s credibility not be compromised because John Key has his head in the sand on the environmental issues we face. Through the shortcomings in the Solar Homes policy, the Greens are squandering an opportunity to really stand out from mire of the populist polices that do too little to address real issues. IMHO.

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  72. I suspect it is that the country’s electricity consumption, which, after straight line growth pretty much continuously since the “reforms”, has, well, stopped growing, and thus there is no immediate need to continue to build generation.

    It is irrelevant that the carbon based market does not demand more from non carbon based generation. Really, it is inconceivable why it would given the resistance to adding the hidden costs of carbon. Carbon based sources of transportation fuel appears much cheaper, therefore there is no demand for electricity to power vehicles. What a shock.

    Notably I see that dBuckley has refused any comment on how factoring in the real costs of carbon might work.

    If dBuckley thinks that status quo demand will allow Adam Smith’s Invisible hand save the planet, then we are doomed. We have to change the dynamics of the market so that this hammer goes where we want it to. It currently isn’t. NZ is increasing, not decreasing its green house gas emissions and the solution is not going to involve just asking people to ride more bicycles to work or to avoid gaming the markets out of some religious belief that it is unwise to engage in anything other than laissez faire industrial policy.

    @rural johnny- I have repeatedly pointed out that you yourself admitted that Solar homes DOES save voters money on their electricity bills. If we were to assume your ultra skeptical buy back numbers are correct, we would agree they would not save much- maybe $100 per month, and they wouldn’t pay back the loan very soon. But the point is, that they would be better off, and the scheme would pay for itself. Your point is not that it doesn’t make economic sense to the potential green voter, but that it is not a wildly profitable proposition.

    So What.

    It generates green energy, it invests voters in green energy generation and it pays for itself. None of these point have you contested. You have expressed frustration that other programs would generate more energy than solar can. Ok fine. But why dump on Solar Homes? Why should support for Solar Homes mean that there should be no support for big wind or big hydro? Take the proposal at face value. It is green energy and it saves consumers money.

    So it is unclear why it should not be supported. If there is some zero sum cost to supporting Solar Homes, I will say again- this case has not been made. Not that it has been made convincingly, but that this case has not been made at all. Why is it that supporting Solar Homes detracts in any way for hydro, geothermal or big wind projects? It seems to me that people are just projecting their fears and assuming this is a zero sum proposal. I don’t see why anyone has good cause to believe that is the case.

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  73. If you want to see good cause, then you need to read posts to understand what people, including me, are actually saying. No one is dumping on Solar Homes. There are valid issues with it. Economic issues (capital payback, NPV). A social issue (for some, the policy will in fact cost people money). And environmental issues (EROI, Energy payback). As I have clearly said many times on this thread, my concern is not against solar pv, it is with the credibility of the Green party.

    Given today’s awful gaff by David Cunliffe, the Labour party are compromised on this issue, leaving an opportunity for the Green party to establish economic credentials with a green basis. If the solar homes policy were exposed for the flaws it contains, the consequence would be that John Key will earn a free home run.

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  74. @dbuckley – New Zealand’s peak winter electricity demand is around 6.5GW – about 2/3 in the North Island and 1/3 in the South Island. This needs to be met in both islands even if there is a failure of a generator or a link. The 700MW of HVDC Pole 2 is the most troublesome potential failure as if that goes out, only 500MW is available from the South Island to meet North Island needs. Also you can’t rely on wind or some of the peak output of run-of-the-river hydro schemes, so there isn’t a huge amount of spare generation capacity. What is reliable is roughly 2.5GW of fossil-fuelled generation and 2.5GW of hydro and geothermal generation in the North Island and a bit under 3.8GW of hydro in the South Island.

    The gentailers who own that fossil-fuelled plant will run it rather than build new renewable generation if they think it will be cheaper. The cost of renewable generation needs to be balanced against the cost of the electricity which would otherwise need to be bought or the sell price of the electricity it can generate. Increasing mid-day generation will reduce the spot price at this time of day, but do little for the morning and evening peaks, which has the effect of reducing the return on renewable generation such as wind, geothermal and solar. That mid-day solar generation will displace some fossil fuelled generation, but not necessarily as much as might be expected as the fossil fuelled generation is still needed to meet the morning and evening peaks. The most efficient fossil-fuelled generation uses combined cycle i.e. it includes a thermal stage, but unfortunately this ramps up and down slowly. If the utility needs to run fossil-fuelled plant to meet morning and evening peaks but not in between, they are likely to use more peaking plant which can ramp faster, but is less efficient, resulting in smaller CO2 emission reductions.

    However if the price of running fossil-fuelled generation increases through either higher fuel costs or emission pricing, any gentailer or power company can build new renewable generation and compete with the existing gentailers. Passing on the costs to the consumers doesn’t make these gentailers competitive again – it will just cost them market share.

    Trevor.

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  75. bj – the Stockton Plateau hydro project (25MW) was supported here. I am not sure of its current status, but it was expected to be commissioned around 2016-2020.

    Trevor.

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  76. The result of subsidising home solar panels at 3-4 times the cost per Watt generated (of average power) compared to wind and geothermal power may be lower electricity prices for those home owners owning these panels, but it is likely to result in increased prices for everyone else. The solar generation will decrease the sales of the electricity companies but do little to reduce their costs, many of which are incurred in meeting peak power demand. (Solar power does NOTHING to reduce the winter peak power demands.) Faced with this, and falling mid-day sales, the power companies’ natural reaction may be to introduce more price periods, reducing the prices for mid-day power (bought or sold) and increasing the prices of morning and evening power further. This will impact all consumers, but will increase the costs and decrease the rewards of those with solar panels. The average household electricity bill will probably go up.

    It would be unrealistic to expect the power companies to pay for the solar panels at 3-4 times the cost of their own generation, particularly if they still need to build and operate all their own generation to meet the peak demands. However if you claim that homeowners with these solar panels can make a profit from them via the electricity sold back into the grid, then that is exactly what you are expecting.

    Trevor.

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  77. John

    If I, as a voter and a tax payer, subsidize a “savings” for a few people who obtain this reduction by dint of owning their own homes and having the wherewithall to go ahead with this scheme, and it is NOT the most effective means of saving/generating energy, then I have misused money that would have been better employed the better answer… like double-glazing retrofits or wind turbines or electrification of more of the rail system.

    This is organized as a borrowing scheme that allows me to borrow money at the crown’s interest rate. That means additional borrowing on behalf of the government, which low interest is getting paid out to who? Borrowing which is money we cannot borrow for something else without raising our foreign debt (given the way our economic system is distorted). It means I PERSONALLY am paying for something that will reduce my cost of electricity when I least need it reduced and I will be lucky to break even after 11 years and my house will still be cold and USE too much electricity in winter… and I will have no ability to borrow the additional money to fix the real problems. They bank will look at me and say “sorry, you don’t have enough equity to borrow any more”.

    The fact that it may (barely) “work” for the individual does not mean that it “works” for the society. It is not the value to the individual voter that determines whether it is a good idea… it is the value to the society as a whole. Spending our effort and our political capital on something that is sub-optimal simply goes against the grain. It is a subsidy causing mis-allocation of resource.

    It smacks of a decision made by a committee that could agree on nothing else, or a committee that had no engineering nous at all in it, or a policy that we could get support from Labour on. It irks me not because it is done poorly so much as because it so adroitly avoids doing the better things that could be done.

    DBuckley and Trevor and You and I all recognize the need to do everything we can to reduce emissions and obtain more generation capacity for this country.

    The problem with the policy is that it will be an easy target for the opposition because it is NOT an efficient and effective method of addressing the problems. It is a “feel-good” that will have little effect and may make matters worse because it IS an easy target and we have to get elected, and right now we’re not putting a lot of points on the board.

    Ask yourself whether this is more effective than double glazing. More effective than community wind. More effective than transport electrification and improvements to mass transit. More than any other viable party this one COULD make a difference, and it seems determined to choose the empty gesture instead.

    respectfully
    BJ

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  78. Incidentally, I won’t retrofit double glazing into beer-can frames. PVC or wood please, thank you very much.

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  79. One of the arguments supporting the Solar Homes policy is that the US are seeing a solar installation every 4 minutes. The envy argument implies that “we should too”.

    As impressive as this growth rate sounds (29% of new generation in the US last year came from solar), the reasons for it are changing and so this growth will decline significantly.

    The first reason for rapid solar pv growth in the US is that net metering laws require electricity utilities to purchase home gen output at their retail sell price. Turning the meter backwards is not sustainable for the utilities which increasingly are crying poor at the policy.

    Second is the federal tax credit for roof top solar is 30% of eligible project costs. When that 30% declines in 2017 to 10%, the wind will be taken out of solar’s power sails.

    Third is that the recent rapid decline in solar pv panel prices looks set to reduce to a trickle when the oversupply from Chinese manufacturers is shipped.

    Finally, some US States require electricity utilities to purchase renewable energy on a quota system. For many States, those quotas are close to being filled and lobbying from the powerful anti-renewables sector (Heartland Institute and others) means it is unlikely they will be extended.

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  80. dbuckley – while we could reduce our electricity consumption, this isn’t the right way to go. I expect that improving insulation, increased use of more efficient lighting and other efficiency gains will reduce the household use per capita, this will about match our population increases. What should be increasing our electricity consumption is moving our other energy uses off fossil fuels, such as domestic and commercial space and water heating, school and rest home heating, etc and transport. Heat pumps are more efficient than burning fossil fuels, even if the power to run them has to come from gas turbines.

    What irks me though is to see new subdivisions going in, with most houses equipped with a gas fire, gas hob and gas water heating. Don’t people know that the price of gas (particularly LPG) is going to go up? Actually they may not – I haven’t seen any natural gas or LPG price predictions, and it has been a long time since I saw any predictions on oil prices. What are treasury’s forecasts?

    Trevor.

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  81. Actually @Trevor29, reducing our energy consumption absolutely is the way to go. This can be achieved through improved efficiency (insulation, more efficient lighting, micro charging of portable devices, smart metering, …), conservation (avoiding wasteful use of hot water, …) but most importantly, individuals simply “wanting less”.

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  82. I believe what Trevor meant was that exclusive reliance on conservation is not the way to go. With that said, there is no question there are substantial savings to be had with relatively cheap amendments to what is considered best building practice.

    The big problem is how bring our 70 percent dependence on hydrocarbon energy sources down to single digits. Conservation plays an important part but will not get us there without far more substantial focus on radically increasing the substitute green sources of energy in the same range of utilized energy. Why do I assert that it would have to be radical? That 70 percent figure represents 684 petajoules of gross energy (source)- or 190K gigawatt hours- minus the relative difference in thermodynamic efficiency of devices using emissions free energy versus those using these hydrocarbon sources.

    As of 2012, NZ generated just 43K GW hours of power. So although our needs are sufficient for our carbon emissions based economy, to get off carbon will require roughly quadrupling our current capacity*. I am completely with Trevor that we aren’t going to get there chiefly with the small scale programs I happen to strongly support- like solar microgeneration technologies, more and safer bike lanes, european standard energy building standards and so on.

    *(The fine print about the needed power is that this will be somewhat less because we need to replace utilized, not gross caloric energy and electric motors are far more efficient than internal combustion. But somewhat more due to the extended time frame required for the political and physical engineering required to get this capacity build means that our demand will be higher. )

    RE the inquiry on LPG: Global LPG costs were $12 per million BTU before fracking, and plummeted to $2 per million BTU last year. They are projected to remain low due to the global proliferation of fracking technology. Although I am confident we will be successful in blocking fracking in NZ, local prices will reflect the global price. LPG generates half the CO2 as other petroleum sources, and some argue that it is a good bridge fuel while we transition to a carbon free system. (As my prior posts probably suggest, I am not the kind of advocate who buys such “go slow” arguments.)

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  83. BJ- I don’t think you understand public backed debt. If a program provides an income stream to pay back the debt, it does not incur the injuries to other programs or to your personal borrowing that you listed. Currently our debt to GDP ratio is 38%, much much lower than typical for western economies. France and Germany are at 89%, UK at 90, Iceland and Belgium are at 99%… So as far as norms go, we are underutilizing our finance options for infrastructure building necessary for conversion to a low carbon economy. If you think that is not the case, then please provide citations to some stories that make you think that borrowing for such programs has such onerous costs as you imagine.

    There has been no demonstration how this program harms any other green projects. These projects are not in competition with each other like some rugby game- it is not a zero sum game.

    @RuralJohnny: “No one is dumping on Solar Homes.”

    Hmmm. There have been several misrepresentations of this self financing program, misstatements of fact and only belated grudging admission that the program saves voters money. That’s not dumping on the proposal? With “friends” like this, who needs enemies?

    @ Trevor : “The result of subsidising home solar panels at 3-4 times the cost per Watt generated (of average power) compared to wind and geothermal power…”

    I see. Kiwibank and Vector Limited offer similar financing of Solar Panels. Are they subsidizing home solar too? These companies are not in the subsidizing business and nor is this program. So please. Stop calling it a subsidy because it isn’t- the owner is obligated to pay the loan back in its entirety with interest.

    “The solar generation will decrease the sales of the electricity companies but do little to reduce their costs”. Ok. So if the reason that we should block this program is that it is going to harm these electricity companies, then why does it also not follow that we should block KiwiBank and Vector Limited from harming these electricity companies?

    Trevor- at a time when electricity companies are getting what some posters here calculate as a triple return on cost of wholesale electricity, you will be hard pressed to find voters sympathetic to the notion that these retailers require protection from big bad greedy homeowners taking a loan in order to lower their electricity rates.

    Your point is generic to capitalism. If anyone is able to find a cheaper way to reduce their costs, it will decrease the profits of those who formerly were chiseling them. If Kiwibank and Vector should not be blocked from supporting such loans, then why should the government be blocked from offering them?

    Such a government financing should be offered to the entire category of emissions free generation. I understand the engineering temptation to pick winners and losers, but history has shown that this is a fools game for governments. As far as I am concerned the government should be offering all zero emission generators attractive financing for bulking up our electricity capacity so that we will be in shape for elimination of transportation fuels. The usual terms and conditions apply- the generator must demonstrate high confidence they can pay back the loan and so on.

    You admit that this program would save voters money, and does generate green electricity so in a nutshell all your point amounts to is that it doesn’t save electricity companies money, and that we don’t get to pick which technologies are the winners and losers.

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  84. What irks me though is to see new subdivisions going in, with most houses equipped with a gas fire, gas hob and gas water heating.

    Its not entirely madness. Every cook who has used both gas and electricity to cook with will tell you that a gas cooker is vastly superior. Instant gas water heating is a reasonable idea too. For my household, if I had instant gas water heating I would use less energy on heating water, however I would not save money. For my household, there is no cheaper way to heat water than to use off-peak electricity.

    Last I looked, gas per KWh was not majorly different than electricity.

    It is a mixed blessing that New Zealand is moving away from the traditional logburner for space heating. Log burners are carbon neutral, but do emit bad particulates. With low density houses those particulates are not a problem, but up the housing density, and have strange atmospheric conditions, and you get big issues that make logburners unacceptable.

    But this is where John M is on-target. If (and its a big “if”) we want to shift space heating on-mass to heat pumps, then we will need more electrical capability, and if we do, then it doesn’t make the best sense to burn gas for power for heat pumps. The efficiencies come back to it being less bad to burn gas for heat directly. But if you have more renewable power, and a method [footnote 1] of matching supply and demand, then on-mass heat pumps becomes an excellent idea.

    1) I know we don’t see eye-to-eye on how to do that matching, but the how is a detail, its just that it needs to be done.

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  85. Trevor29 mentions:

    …this will about match our population increases.

    That is actually the “elephant in the room” problem. After allowing for agricultural changes, once one corrects for population change since the 1990 benchmark, then the per-capita emissions change is actually quite modest. Too many kids (even given that our birth rate is around replacement levels), too many immigrants.

    Of course, we aren’t going to do anything about any of this :)

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  86. Most of our hydrocarbon consumption goes to transportation, not electricity generation. But the quadrupling of our electricity generation necessary to avoid the “devastating effects on mankind” is not something that the market will demand on its own. Or do you disagree? Presumably you do not think that markets are self aware and will understand that climate change is a significant threat to our economic survival. If the IPCC scientists are correct that the temperature change will likely hit in the 5 degree range, we are talking about damage to the NZ economy measured not in billions but trillions. Market demand follows short term perceived needs, so it is difficult to understand any argument that begins with observations about how market demand for such radical capacity improvements is low.

    I agree the market can drive demand for the radical shifts in infrastructure needed for a largely carbon free economy if policymakers change the profit calculation dynamics of the energy market.

    Whatever form a gradual phase in of a carbon tax takes, the idea is precisely that it would be passed on to customers so that they would by choice reduce their consumption of fossil fuels in favor of green alternatives like electric vehicles.

    Market manipulation? You bet it is. Is it necessarily ineffectual? The burden of proof is on the detractors. I proposed a more politically defensible carbon tax implementation using an auxiliary bankable currency. The political longevity of the program is protected because conservatives attempting to deconstruct the program would be perceived as taking money from the voters.

    Investing voters as stakeholders in Green policies must be central to our political calculations.

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  87. John

    The problem is not the public backed debt, it is MY debt, because I for my sins, would be paying the money out of my pocket for 15 years. It isn’t the public/private split but the total that comes due. If you focus on the public cost (the government obligation) you miss the societal cost of MY using money that might be better used on something else… there are a finite number of people capable of “investing” in power generation of this sort, power conservation or power generation of any other type. They have a finite amount of money. In this arena it IS a zero-sum game.

    Encouraging them, through this loan scheme, to misallocate funds better spent elsewhere is a classic mistake… and imagining that because it doesn’t cost the government anything (much anyway) that it doesn’t cost anything, is another one. It comes out of MY credit rating… debt I owe and must pay back. In this proposal, through my rates.

    I understand this. TANSTAAFL. Money is work done and conservation of energy rules apply to it. I understand how this will become a target in the election year we face. You’ve done a good job trying to defend it but I see the holes and I know that there are others on the other side of our politics who are smart enough to spot them too.

    respectfully
    BJ

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  88. Investing voters as stakeholders in Green policies must be central to our political calculations.

    I wish it were John. Stakeholders cannot be invested in Green policies when those policies are so easily shown to be deficient.

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  89. Re: BJChip’s note: Oh. Perhaps was confused by your preface. You stated,

    If I, as a voter and a tax payer, subsidize a “savings” for a few people who obtain this reduction by dint of owning their own homes

    You led with the conservative meme that this is a subsidy/ giveaway. Your note above seems to abandon that position, solely focusing on whether or not the choice was the best choice for a particular individual. You point out that you spending the 10K would not be a good decision on your part, and the objection is not that Kiwibank, Vector or the Government are not on solid banking grounds for extending the loans. Further, the objection does not have to do with the public debt, but that I “miss the societal cost of MY using money that might be better used on something else”.

    Sure. Individuals make a lot of decisions you or I would disagree with. Maybe a person would get a far better reduction in their electricity bill if they installed a wind turbine. But maybe they are afraid it will topple over on them like in the big storm last week in Canterbury, or maybe they don’t like the noise or fear that it will kill local birds. The thing is, you don’t get to decide for them. Their decision is complicated, and maybe they put their trust in generating their own power from the sun than trusting the utilities to generating the power more efficiently and passing those savings on to them. Maybe they are paranoid that the utility companies won’t pass those savings on and really have no interest in reducing prices to consumers.

    It doesn’t matter if you think that they are making a poor decision. They are adults and are making a choice. Maybe for their site, a 20KW wind turbine would be better for them. Maybe not. Maybe someone in Nelson with very high sunlight days and a poor site for wind would be better off with solar.

    But you are saying never mind. People shouldn’t even have the option available to them. We should remove a green option from the table because we know so much better than they how to run their household accounts. If we are so certain that investing money this way will harm consumers, then why then does it not follow that we should pass a law to bar KiwiBank and Vector from making such loans. Isn’t the harm the same?

    Do you really think it is government’s role to choose winner technologies and loser technologies? It seems to me that the role is much more like that of an umpire, ruling on:
    1) the degree of carbon emissions the generation scheme releases.
    2) whether the scheme can be expected to reliably pay for itself
    3) DBuckley’s items A-C that the scheme be safe and fair to new entrants.

    @rural johnny: “Stakeholders cannot be invested in Green policies” Oh? If they own solar panels on their roof, don’t they feel some investment in their investment? Don’t they tend to prick up their ears when they hear that microgenerators should get less for their electricity than what they believe is fair? If they participated in this program, you bet they would pay attention. When a Green or green minded labour MP is on the radio saying that microgenerators should get 2 or 3 cents more because that is fair, who do you think they will be rooting for? Or do you think they will just switch off because they think it is a political spat that has nothing to do with them?

    On the contrary Rural Johnny such programs survive because people regard them as things they have a right to and are delivering them perceptible advantages. Woe to the politician that attempts to take away those advantages. Motivated, invested voters is key to building our base.

    To the larger question though. Do you believe the assessment that the cost of climate change is measured in the trillions? Or do you think it is more on the order of magnitude of millions or low billions? You once said the cost of fossil fuel should be factored in, but then refused to give any indication of the range of that cost. Really, your evasion of the question on range of the hidden cost of fossil fuel consumption gives reason to suspect that your support for emissions free generation is not exactly what you’d regard as a very high priority.

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  90. From the EECA website (4 March 2014) – http://www.eeca.govt.nz/about-eeca/news-and-events/opinion/do-the-sums-on-solar-power

    From a national perspective the economics of solar power are questionable. New Zealand would be investing in solar generation at a cost of about 30c/kWh, which will displace cheaper renewable generation like geothermal and wind, costing about 8-9c/kWh. The country still needs to pay for the national grid.

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  91. John: you confuse stakeholders being invested in Green policies with stakeholders investing in green policies.

    The Green (capital G) Solar Homes policy is misleading (telling consumers that they will save money when it will cost most some money). Most will see through the rhetoric. Those that don’t will have no investment in the Green party when they realise what that investment actually meant ($ out of their pockets).

    Those who invest in green (small g) policies may well choose to install solar panels to generate electricity but they will do so because of their green beliefs and not because they were duped by the Green party.

    Look at the numbers John. You will see that he price for home gen needs to be more than 2 or 3 cents more (more than what?). It needs to be more than $0.12 per unit. Do the numbers John.

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  92. There is an exception there though, Johnny; if you can use solar to reduce one’s daytime consumption, then every KWh generated is worth the retail price of juice, something north of 20c. Now we’re talkin…

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  93. John – Misallocation of capital is bad. It is ALWAYS bad. DBuckley makes the only possible case for this and one I pointed out much earlier in the thread.

    This is NOT a good allocation of capital and the policy ENCOURAGES that mis-allocation.

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  94. @dbuckley: Yes as noted in this post The Solar Homes policy itself assumes a retail price of $0.28/unit. But if even one family cannot sell all of their excess gen at this price, and are forced to sell at $0.06 – $0.12, then the price they are forced to buy back at loses them money.

    Is no one interested in the economic reputation of the Green Party? Or is that already blown?

    Like him or not, John Key has the economy apparently hummin’ along. That is what will grab the voter’s fancy and get him re-elected. Never mind the future price that we will all pay because of his policies.

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  95. @rural johnny – I wrote that electricity consumption shouldn’t be reduced, not energy consumption, which I agree should be reduced. The point I was making is that we need to get off fossil fuels, and the way to do this is to harness renewable resources, most of which can be used to generate electricity and have little other use. (Geothermal energy and biomass can be used directly or converted.) So to move off fossil fuels requires us to generate more electricity.

    Trevor.

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  96. dbuckley – burning gas for electricity is around 50% efficient assuming combined cycle rather than peaking plant. Heat pumps for space heating have a coefficient of performance of 3+ so multiplying gives 150% or more heat output of the energy in the gas. Therefore burning the gas directly is less efficient.

    The best use of gas for heating is combined heat and power (CHP) generation.

    Trevor.

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  97. “Misallocation of capital is bad. It is ALWAYS bad. ”

    Was I arguing that misallocation of capital is good? Who would?

    What I stated was that adults are entitled to make decisions that may not get the most renewable energy bang for the buck but funding such generation is acceptable if their plan is economically sustainable. The policy paper states that EECA controls the approval process for applicants and installers. Presumably they have a solar map of new zealand and are able to identify good candidates. Say for example a home around Auckland with high summer daytime air conditioning usage and a roof with ideal angle to the sun. They will self consume their solar and so would enjoy excellent savings. Are you suggesting there aren’t 30K homes in NZ that would enjoy savings? One would think that EECA personnel are competent enough to be trusted with identifying poor sites or usage profiles so out of balance that the owner would wind up owing more money than they could ever hope to recoup. In the case of the hypothetical auckland user the owner is 1) displacing their need for daytime fossil fuel peaking plant generation and 2) saving 28 cents of costs not selling electricity at 6 cents. But you realized this would be the case for some owners. Why do you think the EECA wouldn’t? Or don’t you think there are 30K of those kinds of users in the nation? I think there are, and there are many more as our installers learn how to get install prices get down to Germany’s 1.77EU per watt. But even before these technique improvements and the cost of panels and batteries continue to come down, there are enough homeowners with a convincing plan for saving money. Of course, they could save considerably more than the minimum baseline of $1000 per year specified in their policy paper. Understandably, the Greens wanted to demonstrate feasibility using conservative numbers and gave a minimum generation parameters- possibly the minimum below which the loan would not be approved. I take exception to how rural johnny used them as a cudgel. Maybe all his concern is that not a single Solar Home participant get burned. I think we all agree this outcome is concievable if the EECA neglected to perform due diligence.

    Now, some posters have claimed with the success of such a system that it is fair that retailers would push the prices paid to solar users extremely low, but the policy paper has an answer for that predictable bullying tactic. It proposes that these generators be aggregated and be paid more than such a wholesale rate and less than the retail price. We have gone over why this is fair, but the details are that the NZ electricity market is separated into 48 half hour periods for which the spot wholesale price during solar generation hours is higher than the average wholesale rate. Additionally, microgeneration at the edges of the network avoids distribution charges. This distribution cost is not insubstantial- it is much than 1.4 cents because that is what Contact just increased my rates by due to Orion’s increased distribution charges.

    The details of how EA would determine such the “fair and reasonable” long term price as mandated in the proposed bill is open to speculation. Clearly it must be higher than the wholesale rate due to the savings of distribution costs. What the figure is as I pointed out before, a matter of speculation since the determination is left to the EA, and not Rural Johnny’s skeptical assertions of what the market would dictate. So it must be higher than wholesale but it also must be lower than retail. This is fair because even though the solar generator may be putting as much energy into the system on a given day as they are extracting, they are using the grid as a battery- and scaling up microgeneration beyond toy stage will require major distribution network upgrades. For that they need to be paid a charge plus profit needed to build out management of distributed generation. Is 16 our of 28 cents a fair number for that? Rural Johnny thinks so.

    But then again, he thinks that factoring in the real costs of climate change are irrelevant to this discussion. They are very much relevant because that roof top solar can be replacing not just 28 cent electricity or fossil generation outside auckland. That solar can also replace $2.19 per liter petrol.

    The home owner could opt to avoid the night time peak rate by buying a 1kwh battery- specifically for Trevors benefit- a Trojan 27-AGM 12V 100Ah AGM Battery with a rated output of 1.2KWH that regularly go for 10 years. They don’t cost 23 cents per kwh. At $302NZD with 3560 cycles that gives them a cost of a little bit more than 8 cents per kwh. Maybe Trevor is using dated figures.

    A commerce commission study conducted over two years pointed out that all generators have gamed the NZ electricity market using their market power to inflate prices. The commission ruled that such gouging did not violate section 36 restrictions. ( report, bottom of page 10). Not some of them. All of them. And they did it with dams sold to them built at taxpayer expense that cost about a penny per KWH to run. Why did we do this? Because it is more efficient? Really?

    Apologists for this thievery have used the solar homes proposal- an extremely minor threat to this monopoly power- as an opportunity to rediscover their compassion for the little guy. Why should it be regarded as perfectly acceptable for these companies to gouge customers and have the commerce commission know it and do nothing? Is this not wealth redistribution?

    But to tell gentailers they can’t charge 16 cents for solar homeowners to use the system as a battery? Is it really fair to characterize it as ideological wealth redistribution and the politics of envy? Maybe it is just people looking at their electricity bills and wondering if National or Labour MPs believe in justice any more.

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  98. “Maybe Trevor is using dated figures.”

    Maybe Trevor is using real figures.

    Have a closer look at http://www.trojanbatteryre.com/PDF/datasheets/27AGM_TrojanRE_Data_Sheets.pdf

    The battery life is typically 1000 cycles at a 50% depth of discharge per cycle. The capacity is 82 Ampere-Hours at the 10 hour rate and 89 AH at the 20 hour rate. You are not going to charge and discharge that battery once per day at the 100 hour (4 day) rate to achieve close to its 100 AH rating. But ignoring that detail, 50% gives you under 50AH per day at 12 Volts is 0.6kWH. 1000 cycles makes this 600kWH over the life of the $302 battery which is close enough to 50 cents per kWH.

    Batteries are not cheap!

    The Trojan batteries may last 10 years in standby use or with shallow cycles (under 20%). They won’t last 10 years if they are heavily used every day.

    Trevor.

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  99. The best use of gas for heating is combined heat and power (CHP) generation.

    Sometimes, sometimes not.

    Historically, I’ve been a fan of CHP, and as a big scale system, I’ve seen loads of examples where it works well. Some installations (in horticulture) needs heat and CO2, and for them, CHP is a no brainer. I used to work in a building that had 3 CHP sets on the roof, and the “waste” electricity was 900KW per set! 2.7WH of “free” electricity to offset the spinning meters, along with a goodly chunk of the building’s standby power at no extra cost.

    Since then, boiler efficiency has risen dramatically, and now boilers with efficiencies of over 90% are common, so for a domestic, a boiler is more cost and energy efficient, and more reliable, and less hassle than a CHP plant.

    Even with lower efficiencies, for houses, instant gas heating is very attractive as there is no energy lost through keeping the cylinder warm, as a traditional system is want to do.

    So for some applications, yes CHP is (sometimes, far and away) the “best” solution. But for others…

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  100. John, thank you for posting the Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill. I had not seen that before. All it does is to increase my concerns about the policy.

    Yes I am concerned that “not a single Solar Home participant get burned”. Why are you not at all concerned with that outcome?

    One part of my concern is for the people who will lose money under this policy, but it is also, and to make the point once again, for the Green Party, whose reputation will suffer alongside the financial loss to those families.

    But yet again, you fabricate arguments and presume much to support your untenable position. You also seem to be compelled to resort to insults to self-justify your arguments. A theme through most of your posts is that you deploy the very same tactics that you accuse others of (for example “…predictable bullying tactics”). I therefore resign, again, from responding to your posts.

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  101. Additionally, microgeneration at the edges of the network avoids distribution charges. This distribution cost is not insubstantial- it is much than 1.4 cents because that is what Contact just increased my rates by due to Orion’s increased distribution charges.

    No, there is no saving of distribution costs; it doesn’t matter much whether Orion take their power from the Transpower GXP, or from your rooftop, they still have to distribute it around the area, and their costs will, at best, not alter a jot. [footnote 1] Or there is an outside chance that the costs may increase a fair bit, if it turns out that all the new microgeneration is at the opposite ends of the distribution network from the GXPs, and thus the network “far” end needs reinforcing.

    The saving that can be made is in transmission costs, those that are levied by Transpower, who take the power from large generators and deliver it to retailers.

    Transmission and distribution are very different things.

    [footnote 1] You’ll note that I stated in the list of points above, point B, that homeowner generation systems up to 3KW can reasonably be connected to the existing distribution grid without undue impact to the local network. If Gareth’s dream of 10KW exporters becomes true then there will be costs to upgrade the network. If there is a lot of 10KW systems, then there will be a lot of cost. Expect a much bigger bill from Orion.

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  102. ruraljohnny says Like him or not, John Key has the economy apparently hummin’ along. That is what will grab the voter’s fancy and get him re-elected. Never mind the future price that we will all pay because of his policies.

    This convinces me that his perceptions are coloured by his desire to support the political status quo.

    Comments by Farm leaders in farm papers I have read in the last week say the MPI predictions of the meat output for this year are well overinflated, one reason being breeding stock losses from the dry,, and that the meat industry needs government guidance to help sort profitability. I wonder if this overinflated figure is common in Government figures that get commentators talking about a golden economic place for his team. A few years ago budgets totally underestimated prices for oil and so were all out.

    The way Government measurement of good performance is so inadequate is illustrated by the way the Christchurch rebuild is ramping up GDp to look good. It is really only a late count of getting things back to status quo. Are all the delays in administration of rebuilding acceptable to them as it puts the rebuild boost in the election year figures/
    If we look at the performance of Insurance companies who last year paid out $174m odd for adverse weather and needed assistance from my taxes to stay solvent with Christchurch, I wonder at the solvency of this type of support system, and all of this work the $174m bought will be counted as growth in the GDP, when it is a cost of not sorting the biggest threat to the economy will we ever have.

    I wouldn’t rate this as good economics but an indication the finance/insurance industries are their to create money illusion so they can live in excess, while the real farmer pays the price. John Key is just one of thiose corporate raiders with a PR spin.

    The power retailers with this same corporate outlook will sell the view that the power consumer is the loser by diversifying the generation/distribution base, and it is them who have invested in something to monopolise at a time when human survival needs a complete rethink of the system. They need to take the loss and stop handing it on to the poor consumer.

    John Key is so out of touch he is still selling the mess to unaware investors, or maybe he does know and is so out of touch with humanity that he sees the clean generation as a great market and damn the consumers.

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  103. Rural Johnny: “I had not seen that before.” Huh. It is pertinent to this discussion isn’t it? And yet you claim you are fact based and well researched? I note you are also silent on the ComCom report about price gouging at the Wholesale level. This so called market based system is complicit in maintaining the status quo. Like it or not, NZ is among the highest green house gas emitters of the world, and we continue to increase not decrease our GHG emissions.

    We need to be far more aggressive in confronting the facts.

    The fact is the policy paper specifies controls against the feared abuse.

    A productive criticism would not be to make an ad hominem against a good faith Green policy position but to offer constructive criticisms regarding the perceived weaknesses. I am not convinced that the EECA and the approved installers would recommend or approve the kind of system configuration that rural Johnny describes. It goes without saying that many sites in NZ simply don’t have the sunlight hours needed for solar. If there is a case that they controls are insufficient, then let’s hear that case and make specific recommendations to address those weaknesses. I am with oldlux in my instincts about where Rural Johnny is coming from, but as far as I’m concerned well intentioned obstructionist FUD posts promoting pointless internecine battles in the Green community are no less obstructionist.

    Trevor. Thank you for the correction. The Trojan model that off grid people are more likely referring to that “regularly last 10 years” appears to be something like the IND13-6V, and you would at least need need two of them to prevent going past the 50% discharge. I agree the price point gives them at best parity with grid power, and due to other factors, I think the actual kwh/hr costs may well be even higher than you stated.

    Yet those costs are not static and the technology winds are blowing in favor of ever better savings as power can be shifted to peaks if the utilities are successful in preventing solar providers from getting fair sell prices for their electricity. The manufacturing cost of very heavy duty batteries needed for electric vehicles is alredy $200USD per KWH, with a projected cost of $165 per KWH by 2017 ((source). Obviously, these manufacturer costs are not going to be available to solar homes owners soon, but the technology trends are favorable and apparently irreversible. The near term benefit is the availability of large numbers of such heavy duty batteries with 70% of their capacity- making them no longer suitable for EVs but with extreme long life that deep cycles cannot approach. This is because their “recharge-discharge cycle is engineered so the battery will effectively never wear out,” according to this extremetech article.

    This makes not just solar smoothing, but smoothing of Wind power a much more practical proposition. Certainly, it does not answer the winter problem of solar (generating 1/3 or less power), but it will bring the economic characteristics to break even for many more Kiwis, improve the profitability of those who are already at break even and significantly confront the exorbitant line charges such as those Samiam earlier explained he is faced with.

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  104. The policy paper states that EECA controls the approval process for applicants and installers.

    OK.. THAT I missed. Possibly because it isn’t stated quite that way.

    The EECA apparently isn’t going to tell you that you’re not allowed to get a loan because your house is in Invercargill on the wrong side of a mountain. The degree to which they WILL do that is important and not really that clear… but at least the process as stated starts with the automated evaluation of the likely value. Better than nothing.

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  105. dBuckley- Since this proposal is 3KW, we can defer the discussion of 10KW systems. It has interesting and exciting engineering implications for the local.

    I apologize about my sloppy description. (I understand the distinction you make and you will see my contributions in 2008 to electric power transmission wikipedia article- for example the first illustration in there was mine. It is nice to see much of the text I contributed remains.) Anyway, power “transmitted” using Orion’s local lines from my neighbor’s solar house to mine does not travel on what is called a “Transmission” network. No- Orion is “distributing” it, not tranmitting it. “Transmission” properly speaking is reserved for bulk transfer. Ok whatever. Despite my sloppy gloss over the non wholesale costs I did mean that Orion doesn’t deserve their full pound of flesh. Solar power certainly does not pass into transpower’s backbone, but the point is that the miniscule supply added by my neighbor utilizes a tiny fraction of the Orion infrastructure needed to transmit a non solar KW from a node to my home. Sure, it would be bigger as more supply goes onto their network making load balancing a network not engineered to flow backwards and sideways from branch to neighbor branch of the distribution network. For the purpose of this particular proposal I am saying that the fair price for that “transmission” [more technically "distribution"] from my neighbors house to my house is very small. Presumably the EA would consider this as part of the bill’s mandate that they determine what a “fair and reasonable” price for Orion’s charge would be. I see no reason to assume that EA will quack out a “preferential price” to this particular class of generator as you feel they would. If anything, their recent pronouncements suggest they are hostile to incursions on the business models of the major generators. The text of the bill does not provide preferential guidance to EA, and you have provided no evidence that EA is more inclined to give preferential treatment to solar over other technologies.

    So your assertion that your principle D would be violated remains an a speculation not supported by evidence.

    As you know, I don’t agree with your principle D as stated since among other factors I strongly support of introduction of surcharges to carbon costs to fossil based generation- so as far as I’m concerned I would go along with Feed in Tariffs but preferably less ham fisted adjustments to tilt the playing field in favor of non carbon outcomes. I just don’t see that this proposal violates it. So its not a FIT but you probably guessed I am leary of explicit wage-price approaches like this, and we probably share some common ground on that score. As a temporary intervention technique though I can go along with it as an expedient to give confidence to lenders during the economic chaos of the transition from carbon.

    Business as usual is not going to get us there. None of this is going to happen very quickly, but we are not even talking at this stage about any significant change in our behavior. I view it as a simple preliminary step to building a coalition of voters who are tangibly involved. They are no longer participating by proxy. It is immediate. They are taking action and become a citizen of the green economy community. This is the idea of personal investment, of individuals no longer feeling resigned to having their fate determined by others. Such a stakeholder is far less likely to fall into apathy or fatalism about climate change.

    It’s nothing new, it is pure Saul Alinsky.

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  106. @oldlux

    This convinces me that his perceptions are coloured by his desire to support the political status quo.

    Seems that I need to practice my use of irony somewhat! Although I do think that my perception of John Key was made clear in earlier posts, including this one.

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  107. This is good policy. Most of the analysis I’ve read in the above comments, is flawed, to say the least.

    1. Planned new generation by power companies is almost all gas. They do not see a profit in renewables while the US continues to subsidise hydrocarbons.
    2. This will displace the need for at least some of the gas use. A balance of payments advantage as well as an environmental one.
    3. Even without feed in tariffs, there is a decent payback period for house owners. Even more so if the Government continues to drive up power prices to guarantee power company profits.
    There is an argument for feed in tariffs to correlate with the marginal spot price at the time, as the distributed generation saves the marginal cost of new generation, which we would require otherwise.
    4. The cost to the Government is essentially zero.
    5. I doubt if home owners will install solar panels, if they live on the south side of a hill in Bluff. Even if the EEC let them. The negative cost benefit ratio is obvious.
    6. Puekert effect, discharge capability and life cycle of batteries make them an expensive option, unless you are off grid by necessity. However we have an excellent grid storage battery system already. Hydro plants.
    Electric transport will later supply even more storage/downtime usage capacity (Charging at offpeak times).
    7. Solar, is a good start, but it is only part of the answer, we need to address other sustainable energy development, and we will.
    8. The fact that this policy may limit the excessive profit taking, by privatized power companies, is a feature, not a disadvantage. (Overcharging us for power from dams we paid for years ago).
    9. More distributed power generation in the North Island cuts the transmission capacity needed from the South Island and makes supply more robust.
    10. Contrary to some comments, most power consumption is during the day when the sun is shining, by industry. As you can see from the daily spot prices.
    11. This graphically illustrates the stupidity of privatised power which automatically seeks higher energy use as that gives more profit. Including oil and gas. The more that the oil majors sell, the more tax breaks they get in the USA.

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  108. BjChip- “OK.. THAT I missed. Possibly because it isn’t stated quite that way.”

    I agree my reading is possible but by no means certain. It says nothing to suggest that the program may not be a good fit for everyone. It explicitly says installers must be approved, but does not discuss the details of the approval of participants. But this is a building proposal and involves consents. No one expects consents or financing to be automatically granted on request and I think people would be shocked if a $15K solar installation was granted to a person living in a cabin in a dense forest with little direct sunlight. Do we think that EECA is populated with insane people, or that the Greens would instructed them to not scrutinize any plans? The political cost of abuse as you point out would be obvious to sentient political players.

    Anyway, when I arrange a loan with a banker, the necessary process is that we come to an “agreement” about the parameters of the loan. The text of the proposal says “you agree with EECA on the amount you want to borrow from EECA for the solar panels”. I fully agree with you that it is vague. But does the wording imply that EECA is compelled to agree with you? It didn’t say that. But to take your point- neither does it specify due diligence over the verification of the technical implementation or the certainty for a reasonable payback period.

    However we interpret it, at the end of the day it is not fair to assume agreement implies no control whatever. Agreements are collective.

    So sure- the proposed bill might not express the EECA’s role in the way I assume a responsible craftsperson of policy would. When it materializes, we can have that discussion.

    So the constructive criticism in this case might be: “I am very concerned that we not lose credibility if this is poorly implemented. What specific controls do you have in mind in order to prevent abuse, poor siting, a poorly thought out payback expectation, or unscrupulous or incompetent vendors?”

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  109. However, one thing I do not want to see is the same “approved supplier” model that was used for the insulation scheme.
    The price gouging by “approved suppliers while other insulation suppliers, (mostly smaller companies or sole traders), not “approved” were locked out, meant the scheme cost a lot more, for both homeowners and the Government, than it should have.

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  110. Rural Johnny: “smoothing small scale generation output using batteries is quite practical, just not economic.”

    I can buy that a DIY person can rig up something with second hand fork lift batteries or discarded EV batteries that no longer have sufficient power for car applications.

    But for mainstream users in a wind or solar program like this? Please provide details. I think Trevor was right to box my ears about this error. $200/KWH batteries will be available soon according to Tesla’s CEO Elon Musk. Given the scale of the battery plant he just got through financing, it is quite plausible he will hit the $165/KWH within this decade.

    That will represent a sea change for distributed generation and intermittent green energy sources.

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  111. One of the easily overlooked disadvantages of using batteries to smooth the output of intermittent generation or meet peak demand is the charge-discharge cycle efficiency. With lead-acid batteries, the charging voltage is around 14V but the discharging voltage is around 12V so you lose around 15% of the energy you put in. (YMMV.)

    You also need a lot of batteries. If you have a 3kW solar array and don’t use significant power during the sunny hours, you may have up to 8 hours of generation – say 20kWH. (It won’t all be at rated power.) If you use those 100AH 12V batteries mentioned earlier and cycle them at 50%, each battery takes 700WH to charge (and releases 600WH when discharging) so you would be looking at nearly 30 batteries to absorb all your excess power. More practically you might opt to discard some of the power during particularly sunny summer days and store only 14kwH, requiring only 20 batteries, at around $6000. Then add the controller for those batteries to prevent overcharging. Of course, some days won’t be sunny. If you want to maximise your return on your $6000 investment, you could charge those batteries using cheaper night rate power and feed it back in during the morning peak before the solar panels start generating. Just don’t discharge too deeply else the battery life will be significantly reduced.

    I expect that costs will have to fall significantly before this becomes economical.

    Trevor.

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  112. If or when electric vehicles become a significant part of our vehicle fleet, it would appear attractive to use their batteries to help meet evening peaks. However the electric vehicle owners might not want this. If they have arrived home after a day at work/picking children up after school/running errands/etc the battery is likely to be discharged to some extend, and they will want to recharge it. If they need to go out after dinner, they will want to put at least some charge back in while they cook and eat dinner else they run the risk of not making it home again. This is not the time they want the electricity utility to be sucking power OUT of their battery.

    Where I see those MWH of electric car battery connected to the grid being useful is in acting as reserve generation for coping with sudden peaks or plant or transmission line faults. If there is a failure, the network needs to meet the demand using generation that is already “spinning” and synchronised. Generators that can be started up to meet demand peaks aren’t able to meet this need. However a few minutes of power from the fleet of electric vehicles would bridge the gap between the failure and the ability of the reserve generators to come on-line, thus avoiding the need to have this generation already spinning (and costing fuel/energy).

    Trevor.

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  113. Kerry said:
    “9. More distributed power generation in the North Island cuts the transmission capacity needed from the South Island and makes supply more robust.”

    This is only true for distributed power generation that can be relied on to generate at times of peak North Island demand, which is winter evenings. Solar doesn’t generate then and therefore does NOTHING to reduce the transmission capacity needed, and does little to make the supply more robust. Geothermal and hydro however do both.

    Trevor.

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  114. We are not talking some one size fits all solution here. All that is being a shown here is that solar is not a panacea. Granted, it is not a utility scale solution, a completely offgrid solution would be expensive, and people whose power needs don’t match up to sunlight available power may not recieve savings. But EECA people would be able to determine this up front- and even a simple internet calculator could reveal these poor match ups for most people.

    We are talking about 30K homes with 3KW systems so barely 30MW. Why sweat this? For people with load profiles and a site that matches what solar can answer, it will pay for itself and cut their bills. Is Trevor denying that? No. By advocating this system are we saying it is some sort of substitute- that we can avoid building utility scale renewables and do what is necessary to get off carbon sources in our generation and transportation sectors? No.

    So let’s go ahead with this program.

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  115. That would be 30k homes each generating 3kW peak = 90MW peak and around 14MW average, at a cost of $300M. What else could we do with a $300M loan? Perhaps build a 80MW geothermal plant with an average output of more than 70MW that can displace some of our winter fossil-fueled generation. Or a few small hydro schemes. Or a wind farm of around 100MW capacity and 40-50MW of average output.

    Wouldn’t these be better uses for that money?

    Trevor.

    PS: A 10kW solar panel MAY pay for itself over its life. Whether it will save the homeowner any money will depend on future prices and how long the panel survives and how much its output deteriorates over its life, and interest rates and maintenance costs and probably other factors, so I am not going to try to answer that question.

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  116. Trevor asked, “What else could we do with a $300M loan?”

    What do you mean WE? It’s the Homeowner’s obligation- the Homeowners’ money and the homeowner’s project. They could take the loan out from KiwiBank or Vector and now they would be able to take one out at attractive rates with the added advantage that the EECA would verify the technical and financial soundness of their project. These homeowners are not going to take out a loan and hand it over to a utility to proceed with their project. These homeowners are taking out a loan that will pay for itself and save money on their electricity bills. The NZ government is just the banker lending the money. Just as with other banks, their balance sheets carries debt too, but their ledger balances and there his high confidence of payback since the lien follows the house and the collection is through government rates collection. As I pointed out, NZ’s public debt is extremely low in the OECD. We have lots of room for investment in utility scale projects.

    So you have made the unsupported assertion that this a zero sum proposition where supporting Solar Homes means that other projects will not be able to proceed. Please provide a citation to any article which makes this case.

    PS. I agree we should build utility scale alternatives on a massive scale starting now. We don’t have the votes for it, and the market is not going to initiate this on its own unless we change the calculus of the carbon economy- which also requires votes. Dumping on the Solar Homes project is not the way to build the coalitions we need to get the votes for those projects. You have expressed the engineering efficiency points which I agree with. I have expressed the political efficiency point several times, and you have been non responsive. Maybe you cant due to whatever your day job is, but if that is the case then post under some other pseudonym.

    This project is a win win on many levels.

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  117. So John, you dump on rural johnny for making a mistake with his multiplication (leaving out a step), yet you are silent when I point out a mistake in your simpler calculations. (Hint: 3 x 30 is 90, not 30.) I think you owe rural johnny an apology.

    Trevor.

    PS: The $300M loan is our loan, in the sense that we (the tax payer) are the ones loaning the money to the home owners at attractive (to them) rates.

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  118. In the end though Trevor, the argument has to hinge on the likelihood of getting the additional single large expenditure authorized in place of the multiple smaller ones.

    When it is the decision of the individual, putting value to himself first, the support of the right wing can be expected.

    When it is of value to the society as a whole and requires collective action, their resistance is predictable.

    I know, just as well as you do, that there is no free lunch here. That the spending is of money that would be better used in a societal sense, on a more efficient solution. I think however, that the point to be considered is that this particular source of money (call it a voluntary tax) is not available for the larger expense.

    Remember that the economy comes between the society and the ecosystem. It is already profoundly distorted. Distorting it a little more in such a way as to get people who can do it and break even in the process, generate SOME electricity may not be a big win, but it is better than nothing. “Perfect is the enemy of good” and New Zealand often suffers from perfectionist paralysis.

    John still has to apologize for going over the top with his characterizations of people here, but the policy has a place and it is just as well we understand the argument for it that can actually work – because the far side is certainly going to be looking for the arguments to use against it. We would do well to add double-glazing to the repertoire of things we do loans for though.

    The quality of NZ houses is in general, so absurdly bad that I didn’t even believe it for the first year I was here.

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  119. I didn’t imply that the $300M needed to be spent in one place. Adding double glazing (or other insulation improvements) to a number of houses is certainly an option, and may be a better use of the money – at least it would help to reduce our peak winter power demand. Replacing resistance heating with heat pumps would also reduce our winter power demand. Replacing incandescent bulbs with LED or CFL would also help, particularly where coloured light is required, such as traffic lights, and LED bulbs last much longer and generate much less heat. (LEDs are naturally single-coloured – the white LEDs use a phosphor to change the colour – so no lossy coloured filters are needed if the application requires a coloured light.)

    Part of my reluctance to support the Solar Homes policy is the cost for the amount of power generated, but part is also due to the lack of power during winter. It is the winter power peak that needs to be met with fossil fuels. Until we reduce that peak or provide alternative generation at those times, the generators need to hold on to their fossil-fueled generators. The problem is that if they have them, they will prefer to use them rather than building and using renewable generation.

    Some of the reasons for the high cost of home solar power are all the expenses beside the costs of the panels and the mounting frames, etc. For small installations, the tradesmen will include a markup for their milage, and then there are consent fees, etc. Larger installations have proportionally lower side costs. Another factor is the cost of the inverters, etc to interface between the solar panel and the grid. Applications which can use the DC output of the solar panels directly rather than going through these inverters should cost less and be more efficient. Anywhere where uninterruptable power supplies or backup batteries are already being used might be candidates for this direct use of solar power, and if the on-site power demand is at least equal to the solar panel output, no power exporting is needed so that avoids another can of worms. Sites with telecommunications equipment or data processing equipment come to mind.

    Trevor.

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  120. BjChip: “The $300M loan is our loan, in the sense that we (the tax payer) are the ones loaning the money to the home owners at attractive (to them) rates.”

    Sure, in the same sense that KiwiBank and Vector loans are their loans. But these loans are assets in their portfolios. You imply they are liabilities.

    You further imply, as Trevor does- that this net revenue neutral proposition will retard in some way large utility scale projects.

    Proponents of this position have to date made only vague allusions to intuitively appealing notions why we should believe this- such as I suppose- finite money supplies- but have so far refused to support this argument with facts or point to any published articles that flesh out this argument. No one should believe me if what I say is not backed up with facts, figures and calculations that withstand scrutiny. The burden of proof is on those making this zero sum assertion about Solar Homes. Is anyone denying that our per capita debt is a fraction of the industrial giants of the OECD? Keynes explains why their aggressive financing actually works and is part of their success, versus the fiscally restrictive, laissez faire market fundamentalist approach of Milton Friedman, who coined the TANSTAAFL saying “There ain’t so such thing as a free lunch”. Almost without exception he argues that government intervention (such as government backed debt in this case) is Never good, and that markets seldom if ever go wrong. The carbon market is going seriously wrong. Friedman’s neoliberal notions were the driving ideology behind NZ’s “liberalization” of its electricity markets. It has been a disaster and fears that it would lead to monopolistic behaviors and market inefficiencies such as tacit collusion on pricing were correct.

    If Friedman is right- that there are no Win-Win Keynesian dynamics that government has a necessary role in encouraging, then not just Solar Homes is wrong, but any attempt by governments is wrong to attempt to influence the carbon economy. If Government debt has the effects Friedman feared-that in this case, backing loans for Solar Homes would tend to severely restrict our ability to offer government backed loans for utility scale systems, then a case might be made, but they would have to base the argument on discredited theories that are driving NZ and the global carbon economy to ruin.

    If there is a plausible argument that a single utility scale project will fail to achieve public financing due to Solar Homes policy, it has not been made. Why the silence. Surely there is something published that backs or at least supports this point of view. Proponents ask us to trust them and suggest it is rude not to take it on faith.

    If anyone makes the convincing case that Solar Homes means that we will not be able to undertake much larger projects in the near future, then I will reverse my position on it, and all supporters of it should too. Should we accept this unsupported arguments on faith? Should we just accept the carbon based economy’s meme that solar is not a good choice for

    But it is simply not the case. It is true that solar panels will not be economic for many people. Everyone admits that, but this fact is being used to suggest that it is not economic for anyone. That analysis is not fair, or valid, yet people here are continually repeating it as if repetition will make it more true. It does not.

    Regarding Process:
    The case was being made that this policy is an example of Green Naivete. That’s rude and condescending. Is the Green party in general and the authors of this policy in particular owed an apology? I think we shall never hear it although the detractors’ arguments have been shown to be insubstantial repetitions of carbon market memes. I think there is a roll for ridicule, hyperbole, and confrontational rhetoric.

    Some of the most decisive enemies of making productive progress towards the non carbon economy are within the alternative energy communities. This discussion has been a case in point. Future generations will be quite rude about our expressions of fatalism, cynicism, apathy, and idiotic opposition to programs that would have had a net positive effect on climate change. Kiwis will marvel at how decades of decorum on this subject led NZ to increase not decrease its per capita green house gas emissions. Today after one decade of effort, we are accelerating, not decreasing our emissions, and we stand among the highest per capita GHG emitters in the world. Yet we hypocritically congratulate ourselves for our progress. That’s the rude fact. Business as usual discussions are not getting us there. Drama gets attention and attracts wider exposure. This thread has 124 responses. Compare that to other threads. Alinsky claimed the fifth rule for radicals is that ridicule is the people’s most potent weapon. I am not advocating boorish behavior, but I am advocating pushing back hard against what passes for conventional wisdom on these issues.

    Alinsky was right about ridicule, and we need to ruffle the feathers of all elements of the carbon economy- whether they occur inside or outside our perceived tribes.

    I apologized for the Battery error but neglected to apologize about not turning on the fasten seat belts sign.

    The next decade is going to get a lot more bumpy as the cost of our net inaction is heaped on us.

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  121. Trevor: “I didn’t imply that the $300M needed to be spent in one place.”

    Oh. So name a single energy conservation project that would not receive approval due to NZ government backing too much debt.

    It is nonsense. Our debt to gdp ratio is 38 percent- a fraction of that of far more successful economies. And countries are offering to lend us money essentially for free if we can identify places to put it and pay back the miniscule rates they are charging. They are willing to do that virtually interminably so long as we verify the payback scenario. A Keynesian would argue our retarded economic progress is precisely due to our neoliberal attitudes that retard government financing of projects.

    Financing paradoxically is a free lunch. It grows the economy, it grows the economic pie for everyone.

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  122. Well there is another egregious error- I quoted BJ as having made Trevor’s assertion that “The $300M loan is our loan”.

    Sorry BJ- it’s best to stand clear of this barking dog when I am frothing around the mouth. Those aren’t beer suds. I really am quite rabid.

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  123. Doesn’t matter whether the debt is public or private, the interest is still paid to banks which are mostly NOT in New Zealand.

    http://www.johnpemberton.co.nz/html/total_debt_.html

    It still affects our terms of trade and it still impairs our ability to borrow overall…

    Trevor

    There isn’t any impediment to extending this to double glazing. The target markets are in fact somewhat different. People in Invercargill will want the dg those north of the Bombay hills may find the solar power attractive.

    ——————

    What we have no ability to do is persuade the people north of Bombay to pay for work done in Dunedin. That’s one of government’s jobs and it isn’t doing it very well, but this way we get something done.

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  124. “Doesn’t matter whether the debt is public or private, the interest is still paid to banks which are mostly NOT in New Zealand.”

    Is the goal to avoid financial entanglements with the world, or to cut carbon emissions? If the latter, then we fund all the alternative generation, transportation and conservation programs we can**. Using Keynesian economic principles, such fiscal stimulus from government borrowing will blunt the disruptions caused by termination of carbon oriented economic activities in New Zealand. Coal miners and petroleum refiners will be without jobs.

    “it still impairs our ability to borrow overall…”

    Actually, this is an urban legend. You think it is true because you appear to believe in Milton Friedman economics. Even if it did have some measurable effect, we are a long way away from kind of borrowing that industrial titans employ to keep their economies humming. We could double our public debt with such projects- spending 60 billion on such projects and we still would have a low public debt to GDP ratio.

    THAT would be a lot well paying Green jobs, AND it would provide a realistic pathway to conversion to a carbonless economy. Is it a tough political lift? John Key found $328 million to give to the oil companies (source), and it won’t even be paid back! He did that using his credentials as an economic realist, making the argument that it would produce NZ jobs. Well? Who? Solar Homes puts money in the pockets of consumers and installers. Compare that to oil jobs- foreign workers flown in for a couple months working on an offshore platform. Look at what we are doing by reinforcing the messaging that Greens are unrealistic. It feeds exactly into the myth of John Key’s and National’s competence on economic issues.

    I say shame on everyone who reinforces that meme. We need to paint at as absurd every utterance of this meme regardless where it comes from. We have heard it uttered too many times in this thread.

    The economic calamity caused by climate change puts the burden of proof on the detractors to establish that the consequences of this borrowing are what they say they are. Scientists claim the cost of artic ice melt alone will be costing around $60 Trillion by 2030 (source). So regardless whether Keynes or Friedman was correct on whether governments can borrow a lot or only a little, let’s keep these economic quibble arguments in perspective.

    I see no citations to articles making this case, and instead an unsupported assertion that the maximum scenario of borrowing 300 is going to hurt the NZ economy in general, or other conservation or generation projects in specific.

    On the contrary, it will help our economy by kickstarting a sustainable solar homes industry in NZ, just like in Germany.

    —Notes—
    ** As a detail point I do agree that ideally we would establish strong preference on where the financing comes from. I would strongly prefer to limit acceptance of financing to only other green economies, under the framework of establishing the Green Autarky coalition of largely carbon free economies that I have advocated in the past. Ultimately though, I would not establish this dependency if it meant that we not go forward on green projects.

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  125. John said:
    “No one should believe me if what I say is not backed up with facts, figures and calculations that withstand scrutiny. The burden of proof is on those making this … assertion…”

    He also said:
    “For people with load profiles and a site that matches what solar can answer, it will pay for itself and cut their bills.”

    I haven’t seen any proof that the $10,000 3kW PV solar system will last long enough to pay for itself. I haven’t seen any projected maintenance costs for this system. I haven’t seen any evidence that the 3kW system will still be able to generate 3kW after 10-20 years of exposure to the elements or what the expected rate of degradation might be. What are interest rates going to do over this time period and if they go up, is the homeowner or the tax payer going to foot that bill? What are power prices going to do and are we going to see a midday drop in prices?

    When John said “(solar) will pay for itself”, he is making quite a bold claim for which I have not seen compelling evidence.

    Trevor.

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  126. Trevor29: It is quite clear that Solar Homes installation will not pay for itself ( at a $0.12/unit sell price) for those people who have minimal day time loads (perhaps because they are not at home during the day). This I have already shown.

    One of the near-term uncertainties is the impact of smart meters which some (all?) retailers will use to enable TOU (time of use) metering. For those that sign up to TOU metering, it is most probable that summer time TOU sell prices for excess gen will be below the average wholesale price. Thus without sell-price support (from NZ Power?), the gap between the excess gen sell price and the homeowner’s TOU buy price will further widen and so further reduce the economics of solar pv.

    I note that at least one supplier is guaranteeing solar pv output at 90% after 10 years and 20% after 20 years.

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  127. No. You did not read carefully why the burden of proof is on you. It is because of where the dire consequences lay.

    On one hand, you say consumer solar systems cause harm to consumers by not returning all the promised savings. You claim there is a second harm that it prevents other conservation and generation programs from proceeding, yet you decline to cite one case where that could even potentially be a factor. So on one hand the harm is that people are disappointed they don’t save as much as they thought.

    On the other hand, if such green programs DO contribute to the reduction of fossil fuel (and they would as I pointed out in my auckland example), then the consequences of not proceeding with such programs on a massive scale is the scenario that IPCC scientists say is likely- a 3 to 5 degree elevation in temperature with apocalyptic impact to the global economy and world peace.

    THAT is why the burden of proof is on you Trevor. It is because the consequences of your proof being incorrect is that it contributes to a very dire set of consequences, whereas if the Solar Homes project is wrong, then people are out a few thousand dollars that they otherwise would not have had to spend, but probably would have taken the risk on anyway due to the importance of the cause.

    If Solar Homes will contribute to dire consequences, then you are not providing readers any reason to believe you.

    The burden of proof is on you to show that even for a site with ideal load and sunlight hours that there is such significant doubt that such a 3kw solar home could pay itself off that a lender in good conscience ought not approve the loan.

    Yet KiwiBank and Vector limited do make such loans. Pardon my skepticism, but it seems to me you have an untenable position.

    So why not just concede and support Solar Homes, or at least convert your criticism to constructive criticism rather than deprecating the technical and economic intelligence of the authors of this policy.

    It is condescending, unfair, and unsupported by the facts or your arguments.

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  128. Rural Johnny: “Thus without sell-price support (from NZ Power?)”

    False premise. The “Solar Homes Green Party Policy paper” states:

    Under this plan, the Electricity Authority will create a default contract allowing households to sell their power to retailers, setting a fair and reasonable minimum price between the retail and wholesale electricity price.

    So what you are saying is that if this proposal were some other proposal, it would not pay for itself.

    Do people really let you get away with arguments like this?

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  129. You think it is true because you appear to believe in Milton Friedman economics

    You’d have to be mad to say THAT about ME :-) Really.

    I believe it BECAUSE MY BANK MANAGER TELLS ME I AM NOT ALLOWED TO BORROW ANY MORE MONEY.

    Stop jumping to conclusions John. You are firing stuff off like a blind man with a machine gun and you are hitting a lot of friendlies.

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  130. John – I am not opposed to proceeding with green programs on a massive scale to reduce our greenhouse gas (GHG) emissions. On the contrary, I am not convinced this policy is the right way to go because it will cost significantly more than other programs which will save more GHG emissions.

    And I am not aware of any expertise at Kiwibank or Vector in the long term costs and benefits of solar power. When they approve a loan, they need to be convinced that the person taking out the loan can afford to do so and isn’t likely to default. Loans for PV systems will reduce the bills for the homeowner, thus it is a low risk loan, but this does not mean that there is a low risk of the homeowner ending up out of pocket. That risk needs to be evaluated by the homeowner but some of the information required to evaluate that risk has not been presented here. (Some has – thanks rural johnny.)

    Trevor.

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  131. By your silence we can only assume that you concede that the burden of proof is on you to show that this program causes the harms you and rural johnny have suggested it does.

    And yet you are unwilling to undertake your obligation to make that case.

    Additionally, you are unwilling to make any concrete suggestions for improving this policy paper but are content to suggest that the authors are naive about technical issues, and that the project will cause 2 harms. 1) that participants will lose money. 2) it will harm projects you favor.

    The burden of proof is on you to show that it will create either harm for the reason that there are no dire consequences if I am wrong, but dire consequences if you are wrong.

    Yet you prefer to maintain an air of academic detachment. Future generations will heap scorn on this kind of skeptical, unaggressive stance towards alternative energy programs- one in which the “experts” perpetually quarreled with one another over whether the particular project before them would clearly deliver us from the looming climate change Armageddon that relentlessly approaches. We have implemented pitifully few of them in the last 10 years, and we not only have not reversed our emissions, they have increased.

    It’s time for such obstructionism to come to an end. It is time reconsider your stance of academic skepticism Trevor, and start saying yes, and not no no no. Worst case what happens if I am wrong?

    Let’s find our common ground. Would you say yes with the following provision: That EECA verify that individual homeowner proposals be evaluated to verify that they are plausible that the system will capable of generating the electricity needed to pay back the loan given the users site, their usage profile, and the projected electricity buy rates and EA determined fair and reasonable sell rate.

    If rural johnny is correct in his analysis, then not a single Solar Home will be approved. If the proponents are right, then 30K voters will
    1) be saving money on their electricity bill
    2) be helping cut green house gases not just from generation, but transportation if they power their electric car in the next 20 years using the solar panels.
    3 be invested in part of NZ’s green economic future, with much stronger motivation to hear arguments that your preferred projects be approved.

    So would you go along with that provision? If not, why not.

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  132. Trevor, just curious about your statement that you are “not opposed to proceeding with green programs on a massive scale”. That is not equivalent to saying you will advocate be undertake any of them. In specific, which types of technologies do you advocate we begin work on in the next five years, and what additional emissions free gigawattage would you advocate that NZ possess within 10 years?

    I confess I was a little surprised that you were not aware that Vector had any expertise in solar power. Personally, I don’t think you have a clue who Vector is or what their business model is. Here is a hint- solar happens to be their core expertise.

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  133. Kerry said:
    “This is good policy. Most of the analysis I’ve read in the above comments, is flawed, to say the least.

    1. Planned new generation by power companies is almost all gas. They do not see a profit in renewables while the US continues to subsidise hydrocarbons.
    2. This will displace the need for at least some of the gas use. A balance of payments advantage as well as an environmental one.

    10. Contrary to some comments, most power consumption is during the day when the sun is shining, by industry. As you can see from the daily spot prices.
    …”

    1/ A search through the web sites of Meridian, Genesis, Mighty River Power and Contact Energy does not reveal any planned gas-powered generation. Rodney seems to have quietly faded away. However all companies have wind farms on their projects lists and there are geothermal and hydro developments there too. However many of these projects are waiting for more favourable market conditions. I believe Kerry is thinking of the US situation.

    2/ New Zealand does not have a gas terminal, so we cannot import or export gas (methane, natural gas, CNG or LNG). We do import LPG but this isn’t used for electricity generation. Again Kerry might be thinking of the US scene.

    10/ The demand peaks are before 9am and after 5pm. This is outside the peak generation of solar panels, if the sun is shining at all. There is usually a dip in demand around midday (fewer lights on?).

    Seems there are some flaws in Kerry’s analysis too.

    Trevor.

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  134. “Solar happens to be their (Vector’s) core expertise”? Then how come their web site’s main page lists “Electricity”, “Gas”, “Communications” and “Smart Meters” in their banners but “Solar” gets a small link in 6th position?
    http://vector.co.nz/

    I meant to refer to Vector’s loans department. However this is a pilot scheme you linked to so it hasn’t been running long, and therefore they may not have much experience in the long term costs and benefits. However I am not intimately familiar with Vector as I live in the South Island.

    And if you recall my earlier posts (above) you will see that I am advocating wind, hydro, geothermal and wave energy. I have also advocated co-firing biomass at Huntly to cut its coal usage down and to only use it as a dry-year reserve. I have also agreed that there is a niche for solar power, particularly at sites running telecommunications or data processing equipment.

    If you want a new technology to invest in (other than wave power), have you heard of pressure retarded osmosis? What about gravel batteries (the heat and cold storage ones)?

    As for your question – do I say yes to the following provision:
    “That EECA verify that individual homeowner proposals be evaluated to verify that they are plausible that the system will capable of generating the electricity needed to pay back the loan given the users site, their usage profile, and the projected electricity buy rates and EA determined fair and reasonable sell rate.”
    probably not – how much would this add to the cost of an already possibly marginal installation, and who pays that cost if the answer is unfavourable?

    Trevor.

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  135. If the cost of the evaluation were acceptable, would you support the Solar Homes project?

    How many gigawatts of additional emissions free generation do you advocate that NZ possess within 10 years?

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  136. BjChip said, “I believe it BECAUSE MY BANK MANAGER TELLS ME I AM NOT ALLOWED TO BORROW ANY MORE MONEY.”

    False analogy. Public debt does not work the same way as personal debt. You simply repeated the urban legend that we are constrained by some unspecified finite limit on our financing. I have pointed to facts about NZ’s extremely low debt to gdp ratio, and gave an indication of the theoretical basis for the assertion that such financing is a Keynesian free lunch. Your instinct is to believe in TANSTAAFL. That’s natural- it’s my instinct to. But win win situations DO occur in nature, and we need to be alert to them in green economics. This is one such case.

    Are there some articles that you have read that suggest that we need to be extremely stingy with which green programs NZ funds? If so, please post some links because if you are correct, you have not provided the reader any solid information that would help them reach that conclusion.

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  137. John – I would go along with the Solar Homes policy for small numbers of installations in areas with high levels of sunshine, particularly winter sunshine, for users with a significant daytime electricity demand. The economics may be better for larger installations in rest homes and schools.

    I do not support adding GWs of solar power. My limit for the amount of solar power than New Zealand should install (excluding off-grid sites) is roughly the difference between our mid-day minimum power needs and our night-time minimum power needs – perhaps 1.5GW.

    “How many gigawatts of additional emissions free generation do you advocate that NZ possess within 10 years?” – around 2GW average. Does this mean I would support only 500MW of other new renewable generation? No. The key word is average, i.e. take the capacity factors into account. 1.5GW of solar power with a capacity factor of 15-20% is 225-300MW. To achieve 2GW, we could add that much solar, 1GW of wind, 500MW of geothermal and still be looking for another >700MW of other renewable energy such as hydro, wave and tidal power. However this value is based on shifting much of our direct fossil-fueled energy usage to electricity, and it assumes that Tiwai will remain a going concern even if its level of output (and electricity demand) is varied more. It will also require some investment in either demand management, interruptable loads or pumped hydro storage to absorb excess generation at the times of low demand. A key factor is that much of this generation needs to be either continuous or despatchable, such as hydro and geothermal, rather than intermittent (such as solar, wind and tidal) so we can keep the lights on in the middle of winter without needing large amounts of fossil-fueled generation.

    I doubt that we will be able to install that much, partly due to funding issues and partly due to entrenched opposition.

    Trevor.

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  138. It seems to me with the EECA controls specified, it would achieve the goal you related for homes. If the evaluation costs a few hundred dollars extra, well- big deal- the owner does not break even for a few more months.

    So it seems to me that you could have said your support would be there if such a provision were added. This would allow for some known unknowns- such as whatever the “fair and reasonable” rate determined by EA- if it is very low then very few homes will qualify.

    But any payback on the North Island that does not account for displacing long term costs of fossil generation would not be very fair to future generations.

    Say EA decides to include the long term economic cost of carbon, and they assume generation during the day would displace power from the gas and coal plants on the north island. Some of the medium range estimates of the long term economic cost is is $150 USD per ton of CO2 which works out to about 13.2 cents per kwh (.5 ton per MWH from gas, 1 ton from coal- averaged). Even if we use some of the ultra skeptical figures tossed about here for wholesale and saved transmission rates, it is not implausible that a figure of 20.2 cents would be arrived at.

    That’s not a subsidy- it is saying 20.2 cents is a fair and reasonable calculation of the final cost of the displaced fossil fuel generation, including hidden costs of climate change.

    The $150 USD per ton figure is a mid range listed various papers and articles such as here (pdf) and here. If future temperature increases are in the middle of those projected by scientists, that range is from $55 to $266 USD per ton. Some governments have set the number much lower assuming much more optimistic climate change scenarios, and generous discount rates (the idea people tend to discount pain in the distant future as far less important as pain in the immediate future).

    If the solar generation displaced fossil transportation fuel, then displaced cost would be much higher. However there are very few Electric vehicles in NZ at this time, so it is not a significant factor to the proposal in the near term. Then we could detail the mechanism for transferring the displaced long term cost from the petroleum industry to the solar home generator.

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  139. John – the flaw in your analysis is that you ignore the long term costs of wind and geothermal power. They are around break-even at current prices – proved by the sensible managers of the major power companies investing in such generation. A small increase in the CO2 cost will tip the balance towards these other forms of generation, thus limiting the price rise of wholesale electricity.

    Trevor.

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  140. Say EA decides to include the long term economic cost of carbon, and they assume generation during the day would displace power from the gas and coal plants on the north island.

    But why would they make that assumption?

    The Green Party says, and I quote:

    It’s [the solar homes policy] also about reducing the environmental footprint of the electricity industry by cutting greenhouse emissions and reducing the need for more big dams on our majestic rivers.

    Why would they say that?

    The solar homes initiative may reduce greenhouse emissions, but it also may increase greenhouse emissions.

    The Green Party (and John Messerly) have no way of knowing which of these possibilities will occur. Neither do I, nor anyone else. This is the realities of electrical engineering and power generation using the current hand that history has delt.

    Politically, the engineering can be influenced. But for that to happen you actually have to say it is going to be made to happen, along with a “how”. Without that specified and stated will, then the assumption has to be we are where we are, and thus the emissions benefits of adding more rooftop solar is unknown and unquantifiable.

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  141. No mate, you still misunderstand me. I have a limited amount of money, to borrow or otherwise. I can deploy it in any of a number of ways.

    If I pay additional tax to fund a large project that makes the society’s energy use less damaging I can’t use that same money to make my roof into an energy mine or my windows better insulators… and vice versa. If I go to the bank with a project they want to know if I can pay it back. That’s my money AFTER taxes.

    My cashflow supports some things not all things and it IS a zero-sum game.

    Public debt or private debt, it remains an obligation that ultimately I have to IN SOME WAY pay off. The society is not just one side or the other, it is both sides.

    TANSTAAFL – and money is very much like energy in this. It is work, it represents work DONE, and it is both conserved and subject to the laws of thermodynamics or it is an unsustainable representation.

    Which would be every dollar in every pocket of every person in every country on this planet… and economists think there is nothing wrong with this or fractional reserve.

    So when I use money inefficiently influenced by a program that the society offers me, even if it gives us a small net gain, the program CAN be thought of as a mistake by the society. It is a misuse of resources.

    It isn’t really, but the argument is politics, not engineering.

    Trevor hasn’t wrapped his head around the notion that this is not money that would be made available for the society to use any OTHER way. So he reckons only the mistake.

    That there is an automated vetting that will almost certainly drop rooftop installations that are completely unsuitable and will discourage those south of the Bombay hills, is essential.

    That the benefits go back to the person investing makes it acceptable to the right wing… particularly as it is a cost not borne by “the state” but by the individual. They love that “user pays” stuff.

    Most more efficient and effective measures we COULD take with the same money would require the money to be collected as tax first. That’s the politics side of it. The money we are talking about doesn’t exist at the government level.

    Want to see insulation fixed? Make the heating a part of the rental. The landlord being obliged to pay the cost of keeping the house/flat/apartment at 17 degrees. We’d have to arrange that so it comes out of the landlord’s pocket, not as an increase in rent… tricky stuff.

    I went to the trouble of buying the house I am in, at no small disadvantage to me (cause it is damned expensive to do that)… because I have a dog and I have the right to do the insulation. I remember spending $700 some months, on heating here… and the wind comes through the “closed” windows so that one can’t keep a candle burning.

    This is a country where the housing stock is by and large, a criminal indictment and seriously energy inefficient. That won’t be addressed much by helping some owners in some places slap a solar panel on the roof and that’s why this policy got such a negative reaction.

    When viewed from the other angle, that it is money that the individuals who invest in it would never make available for any more efficient efforts, it is a pure win. Not a big one, not what any engineer would recommend to solve the bigger problems, but it IS a win.

    We’ve wasted a lot of effort on this thread. We need to get some benefit of it. I’ll try.

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  142. There are a number of ways to reduce their electricity/energy bill that an individual house-owner may consider. One may be to add solar panels onto the roof. Another may be to install solar water heating. A third may be to improve the house insulation through double glazing, thicker curtains, ceiling, wall and underfloor insulation, etc. A forth option is to invest in lower energy-use appliances including space and water heating (such as heat pumps), or to change those appliances to lower energy cost appliances such as night rate heating. Each option has a cost and a return. Most options will save GHG emissions. If CO2 emissions are sensibly priced, all cost-effective options will reduce CO2 emissions directly or indirectly and some new options may open up (such as wood pellet heating). The options that should be funded are those with the maximum benefit for the lowest cost. I am just not convinced that solar panels are even close to being among the best options for individual home-owners, particularly south of the Bombay Hills. Why wouldn’t other options also be funded?

    Trevor.

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  143. The EA agrees with you Trevor29 on the benefits to the country of energy effieiencey and hence energy waste reduction. See pages 8 and 9 of Electricity in New Zealand 2100, available from [here].

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  144. ” If CO2 emissions are sensibly priced, all cost-effective options will reduce CO2 emissions directly or indirectly and some new options may open up (such as wood pellet heating). ”

    Exactly. But policy makers have no such official agreed on figures on what the cost of carbon is. So what is dollar cost in long term damages per ton for green house emitted?

    New Zealand has not established what this cost is- not even a minimum figure. The UK has considerable experience in this area and their figure is around $83 per ton (source).

    This is where you separate the Climate Hawks from the Climate doves. Even the most carbon aligned conservative MP will utter the proper genuflections about the threat of climate change, but we quickly see the wheat separate from the chaff when they respond (if at all) about what the cost of carbon is. They know if they get everyone to accept a lowball figure like $15 per ton that they can continue on their merry way, making “realistic” economic arguments that drilling and fracking make economic sense NZ, inexpensive gas fired peaking plants make better sense for NZ than intermittent alternative sources. We never build the 2 gigawatts of extra alternative capacity that Trevor wants because there is no perceived economic sense in displacing carbon sources of energy in generation and transportation.

    The criticisms of Solar Homes has revolved around economic viability relative to other programs. A crucial detail concerns what the reasonable expectation is for income from the power generated by such systems. That same analysis is common to all other projects we consider in the future. Would the price of displaced carbon generation be forwarded to the owners of new emissions-free generation or not? How much would it be? Should displaced transportation carbon costs be considered if the alternative energy is used for that purpose? If so what is the dollar figure for those savings to pass along to the generators?

    If there is no government established Social Cost of Carbon, then the calculated cost savings from the displaced CO2 generation is no different than totally CO2 free generation. What kind of price signal is that? The same can be asked if the SCC is set at $15 per ton, because then carbon based generation is only 1 cent per KWH more expensive. If it is the UK’s median figure of $83, then it not using carbon saves 7 cents per KWH.

    So if we are serious about using price signals, a fair and reasonable price for new generation that is emissions free ought to evaluate the true long term cost of the carbon based energy use that is being displaced.

    In the case of adding Solar, Wind or energy efficiency to a Home, the savings can be immense. We could build the entirety of Trevor’s 2 gigawatts and still have additional gigawatt of carbon generation to displace in the north island.

    If we are to proceed persuasively with such alternative energy projects, NZ needs to establish an official estimate of the long term cost of carbon. Conservatives have no arguments to resist establishing a figure. They will have arguments that it be low, but there is no argument that policymakers should proceed without any official figure. Further, the cost of carbon should associate a dollar figure for the various forms of carbon emissions. For example methane is 25 times more powerful as a greenhouse gas, but has a much shorter duration in the atmosphere, so the social cost risk would be modeled quite differently than the cost of CO2 emissions.

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  145. dBuckley- you questioned what argument would support the assessment that solar generation could be considered as displacing gas and coal generation.

    Here is one scenario. The single purchaser, NZPower is in full force and their mandate is to consider the long term price of carbon in their purchasing decisions. There is a phase in strategy so that generators are not suddenly penalized for their past carbon investments. Further, the policy is intended to stimulate growth in capacity, so it is biased to favor new capacity. It takes this form:

    If there is electricity available from new generators that is emissions free, it is to be purchased at the [wholesale price] plus the cost savings from displaced carbon sources. The money for these displaced savings are deducted from payments to the carbon source generation. As more clean generation comes online, the payments for carbon generation get cut into more and more.

    This provides a strong disincentive to build more carbon generation, and a strong incentive to build Trevor’s 2 gigawatts.

    Proponents who might win this argument at EA could argue it is fair and reasonable because it takes into consideration the real cost of carbon and allows generators to gracefully phase out their carbon capacity in a fair manner.

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  146. John – there is absolutely no need to calculate a “Social Cost of Carbon (dioxide)”. Carbon taxes and Emission Trading Schemes are designed to increase the cost of using fossil fuels until the use of these fuels drops to an acceptable level, with the tax ramping up or the number of credits available being reduced to give the graceful phase out of fossil-fuel usage you are after. A price of just a few cents per kWH will be enough to increase the amount of wind and geothermal generation installed and give a boost to energy conservation methods. The carbon taxes or the money obtained by the sellers of the emission credits can go to supporting low or zero emission generation, or it can be returned to consumers to make it revenue neutral. We don’t need to “forward the price of displaced carbon generation to the owners of new emissions-free generation” as the owners of the new generation will receive a higher price for their power.

    Trevor.

    PS: Don’t refer to the new renewable generation as “Trevor’s 2GW” as this value is for 10 years. I want to see more than 2GW build, but building it at a faster rate is very unlikely to happen. It is also NOT 2GW of plant. It is 2GW of average output from new renewable generation.

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  147. Are you saying you are opposed to NZ establishing an official figure for the long term economic cost (aka “Social cost”) of Carbon?

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  148. John – If the object is to displace the CO2 emitting generation, it simply has to be high enough to make the cost of that emitting generation more onerous than the cost of the non-emitting generation. I’d guess about $150 – $180/tonne, and can refine that at need as it is dependent on fuel costs and renewable costs. It isn’t that hard, and it is not a “social cost” that is important or needs justification. The requirement to stop emitting is non-negotiable, as it is impossible to put a price on the loss of our civilization. People don’t evaluate risk well in these time scales at all.

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  149. You mean an official guess?

    Given that CO2 emissions affect the whole world, why would New Zealand need its own figure?

    You are free to offer your opinion, but I don’t see any value in New Zealand trying to come up with its value. I do see value in assessing the impact on infastructure and other areas where we can actually do something with that information.

    Trevor.

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  150. BjChip- Sure, but having the conviction that stopping emissions is non negotiable doesn’t mean people are going to wake up magically one day and agree with us. I guess I am not seeing the rationale for opposing having a NZ official calculated SCC. You are correct it could be superfluous for some policy objectives, provided we achieve other goals. But it has wide utility as I mentioned, does it not? Do you oppose an officially calculated SCC? What’s the downside to establishing one?

    One of the key advantages is that it provides an additional tool for achieving policy objectives. The way such an economic assessment is done is far less vulnerable to political attack than an arbitrarily set number. It burnishes our credentials for relying on empirical studies and hard nosed assessments rather than simply relying on intuitive emotional appeals. If you are concerned about possible downside that the official SCC would be misconstrued as saying “This is the cost, and it is unreasonable to assume there are any costs in excess of this number”, I would expect that NZ framers would explicitly warn about such misinterpretations, and present it the way it is in other countries- that it mostly establishes a lower bound, that it will undergo regular revision as more is known (implying upward growth) and that it cannot quantify intangibles like the cost of Iwi sacred lands now being submerged due to sea level rise. That’s part of the reason I wish the other countries would not have called it “social cost”- I prefer to refer to it as long term economic costs. Some social costs can partly have dollar figure associated- such as estimated dollar costs of wars caused by people displaced by climate change.

    SCC assessments rely on elaborate economic models and scientific assessments of climate change consequences that can be quantified along with scenarios for which only probabilities in varying degrees of certainty are known. There is even a way of providing for assessment of high cost outcomes for which there is insufficient data for high accuracy probability estimations.

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  151. @Trevor- No, I don’t mean an offical guess. Is that what you think other countries are doing with an SCC?

    We can go beyond people offering their own opinions and use such fact based economic modeling of known scenarios as well as handling scenarios for which probabilities are used. What is the harm in performing such an assessment? If it is duplicated effort, then what is the harm in having an NZ agency decide to either conduct one or accept the findings of some recognized international organization or governmental body leading the charge against carbon emissions?

    I guess I am having trouble seeing much light between your position and that of a spokesperson for the oil industry. Yet they are extremely comfortable using such economic modelling to direct their activities that involve a huge numbers of unknowns. They don’t call it guesswork. We can use the same sorts of powerful cost estimation tools to fight them.

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  152. John – It makes sense only if it is a globally agreed cost. At present I and the nation of Sweden think it is over $100/metric ton. This government seems to think it is about $5/metric ton. In the US there isn’t a price. If we put an official price on the social cost of the CO2 emissions it has to translate into a tax or credit.

    It is sufficient I think, to assert the tax/credit value and eschew a calculation on a bunch of speculative and extremely arguable numbers. The disadvantage to those numbers being the extremes of argument that tend to surround them. You set it up as a target and the next thing you will have to do is PROVE it and that my friend, is impossible. One cannot prove that the cost is going to be such and such when one is unable to properly quantify all the parameters that are going into it. So the argument never, ever, ends. Sort of like this thread.

    We don’t have perfect knowledge of the cost apart from the words “large” and “catastrophic”, and Lord Stern’s “Immense Risk” and “underestimated”… the problem is not a lack of a defined social cost, but a failed risk analysis on the part of nations and their citizens.

    I would agree that HAVING a well defined social cost would be useful, but I don’t agree that the science would support any such thing. I may be certain, but I am still reasoning in uncertainty if I am trying to calculate such a number. Basically I know enough not to try.

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  153. Waiting for international agreement on a good estimate of the long term cost of carbon is not necessary for use in local cost benefit assessments. For example, in the alternative energy microgeneration scheme I just described to dBuckley, the SCC was necessary so that we knew what the value of the displaced coal and gas generation was so that the savings could be transferred from the coal/gas users to the new generators of clean energy. Why do we need to wait for a globally agreed on number for that? We don’t have to wait for anyone.

    I do agree that for the purposes of particular global schemes like carbon trading the long term cost of carbon does have to be mutually agreed on.

    But my overall impression was just- wow. You think the SCC that other countries are performing are based on “a bunch of speculative and extremely arguable numbers”? Really? Consider what goes into these assessments by looking at this report sponsored by the Environmental Defense Fund, the Institute for Policy Integrity, and the Natural Resources Defense Council. It focuses on criticisms of how the US calculation is too low, but it does describe some of the methodology, data and systems used. Many of the harms have a high level of certainty. They aren’t just guesstimates pulled out of the air.

    Just as we have climate models, we have scientific models that calculate a vast number of interrelated details so that environmental costs and phenomena can be better understood. Integrated assessment modeling is commonly used in environmental sciences and in environmental policy analysis. The systems used for the European and US SCC assessments used IAMS like DICE-2010, FUND 3.8, and PAGE09. If you are correct about the value of what these experts are doing, then we might as well just close down all the departments of environmental science world wide, because according to you what they are doing is just mumbo jumbo guesses that they can’t prove.

    The SCC does not equal carbon tax. For example, consider land use. What is the cost of regional regulations allowing for dairy or cattle farming on a particular block of hectares? Using the SCC would aid the policy makers in deciding whether the immediate economic benefit to the region was worth the long term cost in added methane emissions.

    You set it up as a target and the next thing you will have to do is PROVE it and that my friend, is impossible.

    Such certainty is unnecessary to calculate the cost of risk. If your assumption about how to evaluate probabilistic calculations were accurate, then lots of everyday objects you count on like GPSs would not work. Anything that calculates quantum physics phenomena is inherently probabilistic. Really- your intuitive guesses about how useful calculations are that are based on uncertain probabilities are mistaken.

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  154. Trevor 29 at March 14, 2014 at 9:49 PM.

    “1/ A search through the web sites of Meridian, Genesis, Mighty River Power and Contact Energy does not reveal any planned gas-powered generation.”

    And. You know the thinking of power company heads, how?

    “2/ New Zealand does not have a gas terminal, so we cannot import or export gas (methane, natural gas, CNG or LNG). We do import LPG but this isn’t used for electricity generation. Again Kerry might be thinking of the US scene.”

    Do you really think that building a gas terminal is that hard. As you have said we have several LPG ones around the country. Plus an inshore one at New Plymouth

    “10/ The demand peaks are before 9am and after 5pm. This is outside the peak generation of solar panels, if the sun is shining at all. There is usually a dip in demand around midday (fewer lights on?)”.

    Have a look at when, and who for, spot prices are highest.

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  155. Noticed much spent on wind power planning recently?

    Power companies are commercial run as privatised operations. They will take the cheapest option, which is gas.

    Need to stop hair splitting and take steps towards a low emission system.
    Even if they are not perfect, though good, we are unlikely to get political will for any better.

    I agree that the same financing should be an option for other forms of energy use sustainability.

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  156. “Do you really think that building a gas terminal is that hard?”
    No, expensive, unlike an LPG terminal. The difference is that the L in LPG stands for liquified. In other words, what is stored and transferred is a liquid under pressure, not a gas. Methane doesn’t liquify under pressure. Gas terminals for methane need to cool it to make it into LNG and the ships transporting it need to keep it cooled. At the other end, it has to be warmed up so the liquid can boil off and become a gas again. It can be done and if the price difference is enough and the volumes are high enough, it probably will be done, but sio far it hasn’t been done. As far as I can tell, we can’t even ship or pipe methane to the South Island. Personally I would prefer to see our methane being used to fuel our transport fleet so we can stop importing petrol and diesel.

    Trevor.

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  157. What SCC John? Sweden has a tax. The US says it is $37. It is a number used to guess about the long term value of some project, but the actual goal is reducing the CO2, not anything monetary.

    It is a political football inflated with speculation and impossible to nail down. It is, is something to argue about endlessly, because the knowledge necessary to set it accurately is absolutely not present.

    “You think the SCC that other countries are performing are based on “a bunch of speculative and extremely arguable numbers”? Really? Consider what goes into these assessments by looking at this report sponsored by the Environmental Defense Fund, the Institute for Policy Integrity, and the Natural Resources Defense Council.”

    ” They aren’t just guesstimates pulled out of the air.”

    They might as well be EXACTLY that John. The science does NOT allow us to quantify the conditions well and the risk is actually damage that goes WELL beyond anything one measures with something as limited as money. SURE the harms have a high level of certainty. I’m more certain of them than most too, but I’m NOT certain of any measure of “costs” that include the end of civilization as we know it. Want to put a “price” on that? I know I cannot.

    Useless, unless you feel the need to persuade yourself that you know something when you really do not. That IS a common political and public need, but it isn’t useful where I come from.

    Tax it enough to make the use of Coal,Gas and Oil more expensive than Solar, Wind, Geo, Nuclear, Hydro, Tidal and every other neat little trick we can figure out… but don’t pretend you know the number. NOBODY knows the number.

    I’m sure enough that it is a good deal more than $37/tonne :-) , but I could be wrong.

    If I am wrong we’ll have expended effort and money reducing pollution and making our energy supply robust in the face of resource shortages. If I am right I can’t actually use money to measure the damage to the human species.

    Putting a price on it… doesn’t take all that much effort. Claiming you know what the cost actually IS, is foolhardy.

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  158. ’1. Planned new generation by power companies is almost all gas. They do not see a profit in renewables while the US continues to subsidise hydrocarbons.”
    - I’m not the one claiming to know the thinking of power company heads. However there are a much greater number of consented wind farms than gas-fired generators. Mill Creek is under construction now.

    Trevor.

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  159. BjChip, really- do you think the purpose of climate models are to convince ourselves we know something when we really do not?

    If what you say was true then scientific models would be useless. But they are actually powerful tools for domains with probabilistic data sets, such as climate and environmental science. It’s not guesswork. You could apply similar arguments to climate models and deny they are useful to attempt to predict what will happen with 5 degrees of warming. Just Guesswork! We all know it will be bad! So why bother with all the number crunching!

    At first you claimed the US does not estimate the long term cost of carbon, and now you realize they do. You seem to understand that the UK also has a long history of attempting to quantify this value in order to aid cost benefit analysis of GHG related government policy. Germany does too. So do some major corporations. (source)

    But according to you, all these governments and corporations calculating the long range cost are just deluding themselves with all this mumbo jumbo and that it is all just a big charade. According to you, they are just wasting their time trying to convince themselves they know something they don’t.

    Maybe they know something about these models that you don’t. Have you considered that?

    Ok. Fine. Believe what you want. If you want to learn something about how the long term cost of carbon is calculated, read the article I linked to. There is no question there are weaknesses in the methodologies, the data, and the lack of consensus on how some of the high risk scenarios should be modeled, but establishing the number has a value in policy planning, and refining the science and data collection behind the model is an essential research activity that countries pursuing emissions free economies should be investing in.

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  160. Kerry said:
    “Power companies are commercial run as privatised operations. They will take the cheapest option, which is gas.”

    Are you sure about that last bit?

    http://www.bloomberg.com/news/2011-08-18/wind-beats-natural-gas-hydro-in-brazil-power-supply-bidding.html

    http://www.bloomberg.com/news/2013-02-06/australia-wind-energy-cheaper-than-coal-natural-gas-bnef-says.html

    And who knows what gas prices are going to do? My guess is that they will rise as oil prices go up and consumers start switching fuels.

    Trevor.

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  161. “It’s [the solar homes policy] also about … reducing the need for more big dams on our majestic rivers.”

    But will installing solar power reduce the need for hydro dams? I think not.

    Solar power only generates during the day. Our peak power demands are morning and evening, particularly in winter. We need the dams for storage so we can release this energy when we need it. Solar power can help keep the water in the dams, but it doesn’t help to reduce the need for a lot of despatchable power to meet our winter peak demands. The choices are mainly fossil fuels, hydro, geothermal and biomass. Our winter power demands are higher than our summer power demands so the higher output from solar panels in summer doesn’t really help either – it worsens the summer-winter mismatch.

    Trevor.

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  162. Trevor, you suggest the mismatch is fatal but have not proven your categorical assertion that there are no solar homes that can possibly displace fossil fuel generation in any scenario. I gave the case of a solar owner in Auckland whose usage profile matches that of their production. Can you affirm that there would be no reduction in demand for fossil fuel generation during those summer months if that owner has cut their demand from the grid?

    And let’s just stop with this nonsense suggestion that the panels are not generating electricity in the winter. Maybe they are generating one third the power they do in the summer. Can you affirm that there would be no reduction in fossil fuel generation during those winter months if that owner has cut their demand for electricity from the grid?

    Trevor, you have not proven your case, and because you are cautious, you will not attempt such a foolish argument. You are content to make unsupported assertions, and condescending suggestions that the greens are ill informed and ask for support based on emotion rather than reason.

    On the contrary, though skepticism is a powerful tool in the service of empiricism and science, it is also an emotion that has a dark side. In a situation where dire consequences are threatened, the skeptic will stand before a raft being constructed to escape the sinking ship and claim there is no way of being certain it will not break apart. The counterargument is that it IS certain the ship is sinking, so the burden of proof is on the skeptic to prove that that the raft will, or that they can deliver an alternative in time. Like it or not, this raft is viable and IS going to sail away. Even without government participation, KiwiBank and Vector SunGenie will be forging ahead while some Green “friendlies” shake their heads and turn to obstruct the next alternative energy project. So long as there are sufficient obstructionists to all other initiatives, Solar Homes may be one of the few rafts to escape. And the skeptics will only have their skepticism to keep them company.

    The arguments in favor of solar homes stand, and Trevor’s skepticism has not unearthed any fatal flaws other than a deep cynicism that lurks in the minds of some individuals who might one day be won over as more courageous supporters of green policies.

    Now- either prove the case that the hypothetical Auckland home cannot possibly displace fossil fuel generation, and cannot possibly pay for itself.
    -Or-
    Show why the burden of proof is not on you.
    -Or-
    Concede. Your position is hopeless Trevor. Here’s some free advice: When you realize you are in a hole, just stop digging.

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  163. John – The result of any climate model is a PROJECTION of the future, which is dependent on a range of inputs over which we have little to no control. The CO2 is one we can control if we try, but the model output has limited accuracy over time and even less accuracy for specific regions.

    Given the interlocking parameters that control how fragile civilization itself is, piling a model of ITS response, which depends greatly on regional climate response that is not available from the models, as well as political variables not controllable at all, on top of the model of climate which makes no claim of regional accuracy, over time periods longer than either were designed for, is outstanding hubris.

    “all these governments and corporations calculating the long range cost are just deluding themselves with all this mumbo jumbo and that it is all just a big charade. According to you, they are just wasting their time trying to convince themselves they know something they don’t.”

    They are… but one may consider that it is not a waste of time if some people require such “certainty” in order to proceed. It wouldn’t be the first time.

    If the society “demands” such knowledge it can certainly require the computations be done before it goes ahead with some project or other.

    My point is that the “knowledge” is doomed to be no better than a guess given our current computational and informational limitations, and it is a political football that distracts us from what has to be done. A lot of work done and it “justifies” some things but not others, with entirely misleading certainty.

    “Maybe they know something about these models that you don’t. Have you considered that? “

    It would be extremely unlikely John. That’s the risk when you just drop into a board and start talking without knowing who you are actually talking with.

    We can compute whatever we like and make policy behind it, but pretending that we can predict regional climate as accurately as we can work out the global climate and then use economic models to work out the effects of those regional changes using assumptions about economics that vary based on the economist currently talking and the phase of the moon… OR that we can put a price on the chaotic end of civilization… is useful only as a tool to satisfy the accountant gene common in managerial and political circles.

    Worse, when estimates of the social cost of carbon are too low, as they USUALLY are, the result is that things that need doing don’t get done.

    The number itself is going to be useless.

    That there IS a number may be useful, and having a lot of work done to get it may convince pointy haired managers that it can be relied on, but the reality is that I can GUESS at a number using far simpler tools, and have an equally valid result.

    The meaningful number is the tax/price put on the CO2 emission. THAT is the one that counts.

    If you must have an SCC calculated to feel comfortable, then I’m sure we can pay some engineers and scientists to provide one. Moreover, I am sure that they would be able to justify ANY number between $40 and $400 with the available data and equally sure that it is a waste of time and money, in the engineering sense, to do this exercise. Premature. In another decade, we might get to where regional modeling is usefully accurate.

    On current form however, our ECONOMIC modeling is in far worse shape than climate models, not being based on any either actual science or accurate measurement.

    I suggest you not try to teach me. You’re smart enough that I’ll pay some attention to what you say, but you aren’t smart enough to be lecturing me on this.

    That insult is real enough and YOU are the newcomer here. You’ve made some extraordinarily inaccurate accusations about people who have been on this board for most of a decade. To say that you’ve made a fool of yourself several times over would only be truth. There is compensation in the fact that you ARE smart enough to add value, but your style here… is not good – yet. You need to respect the others here a bit more.

    My difficulty is time, which I have little of (and I resent it being wasted), so I sometimes don’t read everything after I hit the thing that is wrong. Trevor tends to focus on the engineering reality and he is very good at it. Rural Johnny is new to the board, showing up almost when you did.

    Not a denier in the lot but you were quick to throw out that accusation, as well as the even more ludicrous notion that *I* followed Chicago-School economics. You owe people apologies and that is not a good place to be.. not if you expect them to CONTINUE to listen to you.

    BJ

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  164. John – If the panel on the roof is generating a couple of Watts in the winter it isn’t paying for itself in terms of the energy invested in putting it there. Not. at. all. To the SOCIETY it is a net loss in that case. You haven’t proved the case you are trying to make EITHER, and you aren’t likely to… being wrong.

    The only thing that saves the solar homes policy is the fact that it can be very selective about which homes and homeowners attempt it.

    The fact that it is the wrong engineering solution for MOST of New Zealand remains quite true.

    The fact that it would benefit from being extended to OTHER modes of energy production and consumption reduction remains quite true.

    BJ

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  165. Well, I have made the case for why the burden of proof is on the critics of the policy. You and Trevor have not contested this. Though I have outlined one, I don’t have to demonstrate an affirmative case. You have to prove that the program necessarily will have the harms you assert it does regardless how favorable the conditions are for a solar homes owner to undertake this loan. The critics haven’t even demonstrated the case that there is lost opportunity due (presumably) to constrained ability of NZ to borrow for other projects.

    Now about your extensive personal advice, I appreciate your effort and I am sincere about that. But what matters here is not what our titles are or whether we make fools of ourselves or ruffle each other’s feathers. We have bigger fish to fry. What matters are if the arguments and factual material presented are valid or not. What matters is if we move the country much more substantially towards a carbonless economy or not. I think the people who have posted here are very interested in whether that happens or not and are not the type to allow some rhetorical flourish or histrionics to distract them from the central task at hand. Give them a little more credit. About not knowing who people here are, I would point out that this works both ways. Some of my political activities and achievements are a matter of public record and can be investigated on the internet. Certainly I do take your point though but it goes beyond pseudonyms- recognize that not knowing who people really are is a little bit more tricky than knowing how impressive their titles, connections and achievements are or how long your history with them is. Sometimes you only know who they are by how they react when you really need their assistance. My friends have never been disappointed on that score. In any case- I am just a retired executive and research engineer and not a player so who should care about my input. I don’t expect to be invited to any social engagements. Despite the obvious attributes of my charming personality, I expect no one would see any value in that, at least for the time being. Have you ever gone to any of these? No one wants to have any fun crossing swords. Everyone is trying to make great impressions, and I understand that. Politics is a lonely business.

    But who cares about that stuff really. Back to the matter at hand. Trevor’s argument is untenable, and you have done nothing to aid him. “If the panel on the roof is generating a couple of Watts in the winter it isn’t paying for itself in terms of the energy invested in putting it there. ” I think you know it is more than a few watts- it is more in the range of 1/3 the capacity of summer. It is always paying back- even on cloudy days. It does not matter that the contribution is less than summer months- what matters is if the sum of the output of the panel is sufficient at such a sunny NZ site is enough to for the panels pay for themselves. Trevor and your point about lower winter yields are irrelevant. If the sum is sufficient for payback, it is sufficient.

    Regarding modeling cost of risk: You have presented a case that establishing a cost of carbon estimate doesn’t make sense. I have read your statements, and from my background it appears to me that you do not have an informed opinion on the matter. I have presented links to documents that show that your understanding of these costings are not the trivial things you have implied and that institutions and several governments are using these. Now it may be that these governments and institutions are doing it due to psychological difficulties they are having.

    Can you point to any published article or report from an official source that makes the case you are making that establishing a cost of carbon is inherently useless (other than as a psychological crutch)?

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  166. John, you are always putting words in other people’s mouths that they haven’t said. You are also very good at attacking other people like a rabid dog without actually disproving their actual arguments.

    I never said that solar panels would not generate power in winter. I never said that any power generated by small numbers of solar panels would not displace gas usage. I never said that the mismatch between summer and winter supply and demand was fatal. On the contrary, I suggested that one way to overcome that mismatch was to have more hydro storage (implied, not stated), and another way was to vary the usage of electricity at our Tiwai Point aluminium smelter.

    Tell me John, how much power will your Auckland home owner’s solar panel generate between the hours of 6:30pm and 6:30am on the best day in June? I expect your answer won’t be materially different from zero. Yet the winter demand peak is around 6:30pm so how are you planning on meeting this demand without using fossil fuels or new hydro generation?

    Here is some advice for you – when you realise that you are painting yourself into a corner, stop painting and start planning ahead.

    Trevor.

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  167. John states: (and sorry its a long quote)

    Here is one scenario. The single purchaser, NZPower is in full force and their mandate is to consider the long term price of carbon in their purchasing decisions. There is a phase in strategy so that generators are not suddenly penalized for their past carbon investments. Further, the policy is intended to stimulate growth in capacity, so it is biased to favor new capacity. It takes this form:

    If there is electricity available from new generators that is emissions free, it is to be purchased at the [wholesale price] plus the cost savings from displaced carbon sources. The money for these displaced savings are deducted from payments to the carbon source generation. As more clean generation comes online, the payments for carbon generation get cut into more and more.

    This provides a strong disincentive to build more carbon generation,

    John, based on your previous negative comments in my direction, you may be surprised that I agree every word of that statement. It is, I believe, prima facie, a decent plan. However:

    a) There is no indication from the Green Party that something like is on the table, and,

    b) It has no relevance to the solar homes project, for electrical engineering reasons. So even with this plan in place, it would do nothing to “support the assessment that [rooftop domestic] solar generation could be considered as displacing gas and coal generation.”

    The Green Party statement

    It’s [the solar homes policy] also about reducing the environmental footprint of the electricity industry by cutting greenhouse emissions…

    remains a hope, rather than a guaranteed outcome.

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  168. dBuckley- As I recall the only specific negative I sent your direction had to do with an apparent deference to market forces. Actually you might be surprised to learn that I suspected that the 1 thumbs up I got on that note was from you. I had some doubts though because it seems to me the scheme does violate your principle D. Whether my guess was correct or not, the probability was elevated due to your response to my colorful rhetoric and histrionics. It told me something about who you are and your approach to issues.

    Trevor doesn’t like my reduction of his comments, but he essentially has been making the self evident point that solar is not base load. Not only do I grasp the elementary point, I strongly support hydro. Obviously many greens don’t with what I regard as a mistaken belief that we have other realistic near term means of the generating the massive volumes of emissions free electricity we need to eliminate our extremely high green house gas emissions in a relevant time frame. They feel that because there are such alternatives, the environmental and cultural costs of dams outweigh the benefits of preventing the massive cultural and environmental cost of a 5 degree rise in global temperatures.

    So you asked the fair question, why would they make the assertion that more solar would tend to reduce the need for Hydro. I can imagine a lot of reasons but the most likely short answer is internal politics. I think you can guess what I mean but to elaborate, if I were crafting the policy statement and the dam haters wouldn’t budge without including some such statement, I would offer that I’d go along with including it. But I would also make it clear to them my belief that this small reduction in demand is overwhelmed by the enormous demand for rapid development of all emissions free generation projects. 300MW of intermittent power has value and we should build it, but my position is that no one should be deluding themselves that given the urgency, such generation is no substitute for even a fraction of what a major hydro project can do.

    The policy document can be littered with stuff like this. The question is whether the dam haters get any functional expression of it in a bill. Say the Greens fleshed out the language for the EA guidance on what factors should be considered fair and reasonable. At that point, the climate hawks are going to go all in to restrict the evaluation to long term carbon costs. The dam haters will have to compete hard to get language in specifying exclusion of hydro.

    And at that point they lose but live to fight another day. So sure, the language is there in the policy document. If the chances of my sort of language on EA guidance is remote, the language with the exclusion of hydro is even more remote because such a provision would be vehemently opposed by Green climate hawks.

    @Trevor- I believe the characterization of myself as a rabid dog came from me. I have been very clear about why it is necessary for you to prove your case that solar is not reasonable for homes and is only appropriate for applications where there is uninterruptable power supplies such as commercial telecommunications and data processing equipment. I don’t have to prove that an Auckland home used during the sunlight hours as a day care centre and running air conditioning has the load profile and siting that would recover the cost of the panels. All there has to are plausible participants that would make money, and your opposition to the program crumbles. I have shown why the burden of proof is on you and you do not contest that.

    So go ahead- fire away. Make the case that it is impossible that any home owner could pay this loan back. Or make any other case of your choosing that construction of this raft should be aborted because it is doomed or materially threatens the success of some other more worthy project.

    But as I said, I would counsel that you stop digging.

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  169. But digging is the only way to get to the nuggets of truth – even rabid dogs can be good at digging :)

    “All there has to (be) are plausible participants that would make money, and your opposition to the program crumbles.”

    But what if this program causes others to lose money? As I stated earlier and which has not been challenged, the cost of home solar power is several times that of other systems with the same average output. If the home owner makes money on the panels, where does this come from? To me, it will be either the gentailers or the other power consumers, depending on whether the increased costs versus sales of the gentailers can be passed on to their customers or whether the electricity spot prices will be allowed to soar at times of peak demand (and dip further when the solar panels are generating). Are any of these outcomes desirable? Will they encourage investment in other renewable resources? Will they encourage the required investment in the plant needed to keep the lights on at those times of peak demand?

    Trevor.

    PS: I did see that you had described yourself as a rabid dog, otherwise I wouldn’t have made that comment.

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  170. John – I am still waiting to hear your ideas on how to meet our peak winter demand without using fossil fuels. I am glad to hear that you support hydro, but how are you going to keep enough water in the lakes to supply enough power over winter? This is the key question. Because if you have to use fossil fueled generation, that means that the fossil-fueled generators will be ready to use and the gentailers will want to use those generators rather than build renewable power generation.

    New Zealand rarely has more than 4000GWH of hydro storage:
    http://www.electricityinfo.co.nz/comitFta/ftaPage.hydrology

    That means that we don’t have much capability to save excess power generated during summer to meet our winter demands. Currently fossil-fuels make up most of the difference. Do you have any suggestions as to how we are going to get around this while cutting right back on our fossil fuel usage?

    Trevor.

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  171. “But what if this program causes others to lose money?”

    We care about not impacting other emissions free generation- especially that which is more efficient than solar.

    It is irrelevant what the degree is- whether or not solar is several times more costly than of other systems or only fractionally more costly. The reason why is that there is 2.8 gigawatts of carbon emitting generation to displace. Those are the generators who are going to lose money, and I described one mechanism above. It is true these generators will have to jack up the prices of their non carbon generation, but they will be in competition with other generators under a single buyer system, so really, they won’t be able to elevate the wholesale price by much if at all.

    Your contention that there would be losers among new carbon free generators has no merit- at least not until that 2.8 GW is exhausted. It won’t happen real soon, but by then we will be seeing greater Electric vehicle penetration. This means that generators will be able to displace the most significant category of contribution to our carbon emissions. The oil companies will feel the same sort of wealth transfer scheme based on the cost of carbon.

    So in answer to your questions:
    1) But what if this program causes others to lose money? It will, but so what. The “others” who will lose are carbon emitters.

    2) Where does the money come from. Answered in previous question, but on a larger observation, ultimately it ALL came from the sun- you know, that source of the free lunch.
    3) Are any of these outcomes desirable? Because of the purchasing control of NZ power, this will most injure the profitability of the companies with fossil based generation- so shareholders of Contact energy will be out of luck due to Contact’s decision to invest in gas and diesel generation at Otahuhu, Stratford, Te Rapa and Whirinaki in the last 10 years.
    4) Are any of these outcomes desirable? The one I specified is.
    5) Will they encourage investment in other renewable resources? You bet such a system will. If not show please show why not.
    6) Will they encourage the required investment in the plant needed to keep the lights on at those times of peak demand? Yep, because the new generation will gain extra profit from the displaced fees from carbon generators. It could be objected that these will dry up when those are all retired. However there is a new source in the transportation sector. Generators can expect displaced SCC savings from electricity that goes into EVs.

    The batteries are expensive but for home generators of electricity, the benefits of added capacity is that they can cut out all the energy middlemen and get that free lunch from the sun or indirectly through the wind. However more efficient alternative energy can count on huge demand for power since the Cost of carbon will be passed to EV owners paid for every KWH used in their EV. As I related above the equivalent electricity of the petroleum we use for transportation is 190 terawatts, but that must be discounted because electric engines are thermodynamically far more efficient than internal combusions engines. One quick calculation might use the ratio of efficiency between the Nissan Leaf- and the Nissan Versa Note. The electric drive chain gets 108 MPE and the Note gets 31 for in city driving for the same body with a petrol engine. So really only about 54 terawatts are needed, but still- this would require more than doubling our emissions free generation. It also means doubling the profits of every electricity provider- so long as the generation is emissions free.

    I think the dBuckley’s of the world like to see arguments with that scale of profit motive.

    Hence the need for massive borrowing and building of emissions free capacity. And the generators will be eager to do it if they see a demand curve that they can take to the bank- evidenced by a significant uptick in NZ EV sales. W

    So there definitely are losers- I specified one particular SCC based scheme that could be used to drive SOlar Home, Wind Home and utility scale emissions free generation. The scheme is explicit who the losers are, and how the system would gradually phase in so carbon generators can plan for a graceful transition. John Key showed up for the commissioning of the Stratford gas turbine. Perhaps a Green minister will be present for its decomissioning and sale before it is totally obsolete and Contact is unable to get a good resale price. I wonder if there a trademe type site for hardly driven second hand 100MW turbines.

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  172. No John, there is not 2.4GW of carbon emitting generation to displace. Today between 9am and 6pm there was around 1.2GW of fossil-fueled generation running. If solar power injected more than that, then the wind, geothermal or hydro outputs would need to be reduced. In any case, the mid-day spot price would fall, hitting the solar, wind and geothermal and some of the hydro stations (those that must run, or are run of river). Of course the morning and evening peaks can’t be met by solar power, so the spot price will rise then and if it gets high enough, Contact will start those two 100MW gas turbines at Stratford.

    Trevor.

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  173. Trevor asked: “I am still waiting to hear your ideas on how to meet our peak winter demand without using fossil fuels.”

    I thought I answered that, but the scale is far in excess of your goals- that average 2gigawatt delivered electricity you discussed. [yeah I did understand you did not mean faceplate max capacity- it just is a lot easier to say Trevor’s 2 gw’s. (Can I puhlease go back to oversimplifying/ misrepresenting what you say?)

    I presume you have a way to deliver your 2gws, but I was just mentioning that we really need to be doubling of our current generation capacity, not trimming about the edges to get rid of the coal and gas plants- but to knife the carotid of petrol burning vehicles.

    So I imagine I didn’t do myself any favor there and set the bar higher than where you think you set it.

    Anyway, with Aqua dead, for emissions free baseload we have only about 600MW of hydro planned, 313 from Geothermal. And not all that baseload capacity is as deliverable as the 880 MWs of gas turbine capacity that Contact and Genesis in their infinite wisdom are planning. We kill Aqua in exchange for a Gas Turbine- are the dam haters paying attention? So yeah- but my first question about the chart is whether the org you work for actually pays $473 a month for that publication. I don’t see why it is pertinent. You need some modifications (a lower reservoir) to run them backwards if you want to use them to smooth power. But it won’t be as bad as trying to push through a dam project.

    An efficient highly reliable national HVDC backbone allows you to use such modified existing dams to store surging winds from anywhere in the country, but it has a second benefit- it partially converts wind to base load without any stored energy systems like hydro or compressed air. That’s because when the wind is not blowing in one part of the country, it is blowing elsewhere. An efficient high capacity backbone allows you to do that.

    But because so much of the current consumption can be done passively when the power is available, much of the surges can be absorbed at the consumer side. A simple relay can passively sense overvoltage or undervoltage grid events and automatically throttle up or throttle back usage. They could also be more fancy direct powerline communication chips. Anyway, whether passive or smart, they can be embedded in refrigerators, dishwashers, water heaters, washers, dryers and thermal storage like nightstore in the winter and ice storage AC in summer. Our fellow sociopath Rural Johnny mentioned in ground thermal.

    I suspect that there will be events when the nation is becalmed for extended periods and we won’t enough from these smoothing strategies, and are the wind variability sufficiently average-able nationwide? I have no idea what the figures are, but I would imagine NZ does not have enough geographic area to be assured of a high enough baseload that will always be available. The current trajectory appears to be to build the heck out of wind and pick up the slop with these peaking gas turbines that snap on pretty fast.

    It might be cheaper to build those turbines but not if you have an SCC in place, that is also incentivizing the buildout of new hydro storage in terrain that isn’t suitable for a dam due to poor upstream water supply, but is suitable for hydro storage. Those puppies should be able to absorb cyclones worth of wind that we otherwise would have to discard.

    Anyway, to bring that about there will have to be a Donnybrook over it with dam haters and Climate Hawks regularly making disquieting animal noises at each other.

    That’s where the rabid barking dogs come in.

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  174. “Today between 9am and 6pm there was around 1.2GW of fossil-fueled generation running.”

    I read a chart totally wrong then. I thought our max capacity was 3.3 or so and the average delivered was 2.4.

    Ok. Let’s say that is representative of a national average capacity to displace. There is an additional 880 MW of additional gas turbines that contact and genesis will bring online real soon now. I don’t know how that will increase your 1.2 figure, but there is still a lot of room past actual delivered capacity that Solar Homes will bring online.

    But the type of fossil baseload that is displaced is important. Maybe a nationwide wind farm collective could agree to a contract to provide a given amount of electricity that their models tell them with very high probabilities that they can agree to. That’s not sufficient certainty not just due to the possibility their models will fail, but also because of geographic proximity- given he flakeyness of our HVDC infrastructure. So it is insufficient to fully displace peaking plant capacity, and the utility scale generators don’t get the full incentive for displacing if they build an emissions free project that is not guaranteed base load dispatchable with extremely short notice. That would get them to build the necessary stored hydro capacity and push for the collective financing of a large scale upgrade of the HVDC backbone.

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  175. “but my first question about the chart is whether the org you work for actually pays $473 a month for that publication.”

    I doubt it – I don’t work for a power company and I don’t know what you are taking about. Which chart? What publication?

    My point about the 1.2GW is that much of the time the fossil-fueled generation is not actually generating, particularly in summer, which of course is when the solar panels output the most power. I am glad you are looking at the big picture, as only then can you see that solar isn’t a good match for our needs. Wind is cheaper and available more when we need it. We still need the hydro storage, and I believe we will start to install pumped hydro to absorb the excess generation – probably between existing reservoirs and only later building new reservoirs specifically for pumped storage. And I agree that our HVDC backbone will need to be reinforced.

    All this will cost money, and I am not in favour of investing a chunk of the available money in an expensive policy that will not move us in the direction we really need to be going, when there are better places to invest that money.

    Trevor.

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  176. I am not sure where your limit of 313MW of additional geothermal generating capacity comes from.

    http://www.nzgeothermal.org.nz/geo_potential.html
    has a higher figure, and there are options to harness deeper geothermal resources as well. This would be one area where investing in extra research could be quite rewarding.

    Trevor.

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  177. Two or three more points:

    You ask me what renewable generation I would advocate for in the next 10 years. I wasn’t planning to stop after 10 years, so that 2GW which keeps coming back to haunt me is just the first decade’s worth of development. I hope to see a similar amount in the next decade too, so we can phase out the gas-fired heating and water heating, and the gas usage for ammonia production.

    Everyone treats geothermal power as ideal baseload generation as it can run at >90% capacity factor. However I believe that it might be practical to use it in a bit of a load-following mode where the plant capacity deliberately exceeds the available resource (but not by too much) and the output is reduced at times of lower demand, thus helping to meet our peak demand needs without needing as much storage. This may just mean shutting down some of the capacity over summer and only running it in winter, or it could mean slow variations between day and night levels, or some combination of both.

    One option for pumped hydro storage is to pump sea water up into a reservoir. This just needs a good site not too far away from the sea, and since New Zealand is largely hilly islands, I expect that there are quite a few suitable sites. There could even be suitable sites north of (or in?) the Bombay Hills.

    Trevor.

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  178. I think the dBuckley’s of the world like to see arguments with that scale of profit motive.

    The dbuckley’s of this world are atually interested in and understand power engineering.

    The dbuckley’s of this world know that the Green Party Solar Initive has no engineering behind it.

    The dbuckley’s of this world know that it is unlikely that a bit more distributed generation in the form of 90MW of solar rooftops is going to actually displace any generation whatsoever, be that renewable of thermal.

    The dbuckley’s of this world know that the whole thing is a PR stunt.

    Whats funny is that the people behind this don’t know its a PR strunt; they say things with a straight face, believing it to be true, because it seems to make logical sense. And if you dont know how power systems work, it all sounds really feasible.

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  179. dBuckley said, “the whole thing is a PR stunt… Whats funny is that the people behind this don’t know its a PR strunt”. Charming.

    Rather than relying on armchair opinions of respected long term contributors in this forum, let’s see what actual studies say. Consider the per-kilowatthour cost of building and operating a generating PV plant over an assumed financial life and duty cycle compared to other newly built sources. You will see a far different story. The Energy Information Agency in the US performs such studies, and their figures show that these average levelized USD per MWH cost forecast for systems at utility scale: (figures exclude any financial incentives).

    Solar PV $144.3
    Hydro $ 90.3
    Land Wind $ 86.6
    (source see table 1)

    Now, of course Hydro is baseload so there are obvious advantages there. But hydro is not several times more bang for the delivered mwh buck than PV. Wind and Hydro is 60% the cost- not several times less expensive.

    Of course, there are important differences between utility scale PV, wind and hydro. Utility scale solar chooses the most ideal sites, An Auckland home owner’s average solar radiation is 4.67 kw/m2/day. What is it for the US utility scale pv plant? A 500MW PV farm in San Luis Obispo County, California gets 5.79, so you can discount that PV levelized cost accordingly.

    Now consider wind. The difference between utility scale wind and home wind is far more substantial because output is substantially increased by mounting turbines on towers substantially above the treeline (a Swedish study recommends 30m above treeline). For example, in the night time air flows become more stable and so while the grown wind may die out completely, wind significantly above the treeline may actually may be moving faster than in the day.

    Merely repeating that solar has a ridiculous price performance does not make it so. Skeptics here may prognostications that it is but are unwilling to accept the burden of proof is on them to show that their claims of inefficiency are true. Yet they refuse to debate the point.

    It is the detractor’s responsibility to show why solar PV at home does not make sense. This governmental published study shows that PV delivers kilowatts at a cost within the range of hydro and wind. Back of the envelope calculations show that a solar system in Auckland will generate about 117 megawatts over its 25 year lifetime at a cost of $10K. If homeowners could pay the money up front, the cost per mwh would be about $85- so adding other costs like cost of capital and maintanance, it is plausible that the home owner will come in at a final cost within the range of the studies forcast levelized cost PV. And so all the Auckland homeowner has to net from savings or sellback is 14 cents per KWH generated.

    If that person is consuming all their generated power, that is easily a much more lucrative proposition than buying megawatts not at $143 per MW hour but at $246 per MW hour. Oops no. That would be $267 dollars per MW hour since they just raised it. So which is lower $143 or $267. Hmmm.

    I’ll tell you what’s funny.

    What’s funny is that people mistake condescension for intelligence.

    What’s funny is that most people assume the one who is being patronizing is an elite whose opinion ought not be questioned. Well it is silly to believe anything without proof, or to accept the word of pontificators who decline to accept where the responsibility of proof lies, and refuse to back up their skeptical assertions with citations.

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  180. Trevor, actually I would not have guessed a power company. Honestly, I haven’t taken a guess other than assuming that you spend a lot of time on subjects like this.

    * The subscription price question was prompted by a statement just above the hydrology chart link you posted.

    * The 313MW I think was the published list of Geo projects in the pipeline. Its not an upper limit of course, but you stated this was a 10 year time frame and there isn’t a lot more than that you are going to get installed in that time frame if it isn’t even in the preliminary stages. It seems to me that there is room for 90MW of PV power which is funded with displaced fossil fuel cost of carbon fees.

    *Although I don’t think that I don’t believe your argument revolving around the trivialization of integrated assessment modeling has an technical, political or economic merit, I was throwing rocks at this idea yesterday and came up with a way that the gentailers would game such an arrangement. What if they simply tranferred displaced cost of carbon to themselves? That is- Genesis goes ahead and builds their 400MW gas peaking plant but also put in an equivalent amount of delivered mwhrs from wind. The have to pay out for the fossil, but they get paid a benefit equal to their cost. There is net zero impact on their economic decision. Of course, an competitor that started a gravel ski lift or deepwater CAES / ocean thermal storage system would be net positive, but they would have substantial risk due to the untested nature of these systems that would deliver baseload substitution.

    *Regarding pumped seawater if you wanted immense capacity, consider a fjord. Politically of course that would really light up the blogs with colourful rhetoric, but just saying…

    *Besides gas for ammonia, are nz manufacturers using gas fired kilns to produce cement? That is a huge producer of CO2.

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  181. John – don’t forget New Zealand wind farms have greater output than most US wind farms because our winds are stronger and in many places more consistent. Overseas, good wind farm sites have capacity factors around 30%. Ours are more like 45%. That makes the electricity from our wind farms cheaper.

    Without knowing how you calculated your 117MWH, I don’t know if this figure is reasonable. Did you allow for the 25% drop in output of the panels in that time?

    I never said there wasn’t room for 90MW of solar generation – quite the opposite. I suggested up to 1500MW could be integrated and even told you what I based that value on. It has value in that it increases our diversity of generation, but contributes to our summer-winter supply and demand mismatch. Those areas installing solar PV overseas usually have summer demand peaking rather than winter due to heavy air conditioning loads, so the PV output peaks on the days that the demand peaks as well, making solar PV a better match for their power needs.

    I always thought that Genesis’ Rodney 400MW gas plant was for baseload generation rather than peaking?

    Re pumped hydro storage, remember that the energy stored is the (approximate) product of the height and the volume. A fjord may have the volume but a smaller reservoir up a 600m hill may store more energy.

    I believe the West Coast cement works burns coal. I mentioned the ammonia production because the process starts with steam reformation of natural gas to produce hydrogen, which could be produced by electrolysis instead – a good way of absorbing excess power generated as the hydrogen can be stored if necessary.

    Trevor.

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  182. *Genesis’ Rodney 400MW gas plant is intended as base load? I guess I gave them to much the benefit of the doubt. I would not have assumed they were that mad. I can see a climate dove talking themselves into a Wind/ gas peaking approach as an “incremental” path, under the assumption we had more than 40 years to reverse course away from carbon sources. There is no time for such incremental strategies. Baseload use? Wow.

    The back of the envelope calculation used a projection of delivered hours per year from a 3kw roof system installed in Sydney. It gives a delivered figure of 4598 kwhs over the 25 year warranted lifetime. That’s where 117Mwhs came from. Even applying a discount because solar radiation is a bit higher there, and that the figure is from a commercial vendor, the number puts you in range of a reasonable ballpark for a best case system in NZ. But if we want something better than back of the envelope, and check using official sources you get in the same range. For example, the national renewable energy laboratory has a calculator that works on international locations. Ignore the part that says state and zip and just type in auckland, new zealand. On system info tab put in 3 kw fixed (no tracking) then skip to the results tab. The figure of actual delivered kwhs of solar per year is 3731 kwhs. I believe NREL knows how to calculate for losses in the system. Over the warranted lifetime of 25 years, such an array would generate in a similar range as the Sydney figure- 93.3mwhs and would come at a cost of $10,000/ (25* 3731) = 10.7 cents per kwh. A system in Christchurch comes in at just under 12 cents per kwh. That is a heck of a lot better than 26 cents per hour, so if EECA selects only users whose load profile closely matches their generation, these owners are going to not just going to have a reasonable expectation of payback. The auckland owner is going to save $14,251 over that period if they use everything the generate. A little less when you factor in the small cost of capital.

    That’s not a PR stunt that only fools would believe. That’s money in the bank.

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  183. I doubt if many people are reading any more, but
    The bulk of total power usage is in daylight hours by industry, not during the morning and evening peaks.

    Replacing hydro power with solar, or wind, in summer has the same effect as using pumped water storage. Dams start the high demand periods in winter, full. Instead of the common scenario of a dry summer leaving lakes low for the winter. Less need for gas/oil peaking plants.

    Not to mention all the extra electrical generation we will need to replace fossil fuel transport in the near future.

    And yes, I do know the issues with storing and transport of CNG, LPG, and, crude oil, petrol and other distillates. It used to be my job, after all.

    I hope that it has been published by now, but a group of real engineers in the field, who happened to be in the Green party, have run proper numbers.
    Not just guesses by those, who for some reason, want to rubbish the policy.

    I would like to see it extended to other sustainable generation, including town scale wind, and energy saving measures also, but this is a good way to get people started and involved.

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  184. Another long rant from John.

    I’ll just pick up two points:

    for systems at utility scale

    (My added emphasis) – this discussion, and indeed the Green Party Solar Homes Policy isn’t about utility scale; it is about solar rooftops. The two scenarios are totally different and non-compatible. In particular, one cannot conflate distributed generation (in pretty much any form) with utility generation. In power engineering terms, they are very different beasts.

    …an elite whose opinion ought not be questioned.

    What I’m saying in my post is not an opinion, elite or otherwise, it is power engineering fact.

    …refuse to back up their skeptical assertions with citations.

    Citations? You might like to start with “Distributed generation: Semantic hype or the dawn of a new era?”, Puttgen, Hans B. ; MacGregor, P.R. ; Lambert, F.C.

    If you (or Gareth, for that matter) were to say “I don’t actually know what I’m talking about, please help me to understand”, I’m very willing to explain how this stuff works, and why the Solar Homes policy is a sham…

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  185. I left out the source on for the 4698 mw per year figure for the sydney home. It is here.. Obviously, NREL data for Auckland gives the relevant calculation without any need to estimate adjustments. With PVWatts, only data for CHCH, and Wellington international are available for NZ as far as I can see.

    From this thread, there appeared to be a lot of well meaning skepticism about actual technical and financial performance.

    It would be cool have have PVWatts to help people work through a fact based analysis rather than one based on cynical stereotypes concerning Greens or based on dated information or incorrect assumptions about NZ conditions. The tech guys who did the analysis for Solar Homes Project might like to download the System Advisory Model SDK from NREL. I understand it provides the underlying calculations for this current 3rd version of the PVWatts calculator. All that is really needed for NZ is to plug in local utility information and massage our weather station dataset into a format it can eat. So maybe it would be nice to just get the PVWatts source code from the NREL guys. If you find specific names on documents from these research groups, I have found that people can be awfully helpful. Find one of the guys close to the PVWatts project and you may wind up in a few hours with a pointer to a copy of the source code tree.

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  186. Not a rant, just officially support data that refutes an argument that has no merit. The EIA data I cited and provided links to are also valid for small scale, and I used data from NREL to show this above. No response? I take that as a concession that Solar Homes is not a “PR stunt” and the figures given for payback periods and MWHrs generated over the lifetime of the system not only cover costs, but will result in profits for many Home owners.

    Is saving $14,000 a PR stunt?

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  187. Trevor – When you discuss “available funds” you need to notice that the funds in question for these solar installs are NOT funds that are really “available” for any other purpose. This is an important detail, and it profoundly undercuts the “efficiency” objection you keep raising. We aren’t using public money and the people getting the loans are restricted to those who can in fact save the most from doing this.

    So it isn’t really as bad as it might be.

    respectfully
    BJ

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  188. Is saving $14,000 a PR stunt?

    If the policy objective is to make those with a bit of money a bit more money at the expense of those without money, then yeah, maybe you would call it a success. I wouldn’t.

    If the policy objective is to reduce greenhouse gas emissions, then its a PR stunt, because that is a gamble. Anyone who understands a bit about power engineering will tell you this.

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  189. Kerry said:
    “The bulk of total power usage is in daylight hours by industry, not during the morning and evening peaks.”

    This would mean that fewer homes would use most of the 3kW from a home solar panel during the time it is generating near maximum output, so most of its output will need to be sold to reap the reward from having the panel. The economics will then depend on the price such electricity can be sold at, and whether having a number of solar generators all injecting their power onto the system simultaneously will cause a reduction in the spot price that will probably set that sell price.

    If the uptake is significant, I can foresee some residential areas becoming net exporters of power for significant periods each day. The local transmission losses will also increase given the separation of residential-zoned land from industrial-zoned land. Hopefully this won’t trigger other problems too, such as with fault protection systems.

    Trevor.

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  190. John

    Obviously, NREL data for Auckland gives the relevant calculation without any need to estimate adjustments.

    There is nothing obvious in this at all John. All calculations, including NRELs, make estimates and assumptions. My assumptions were that a 3KW solar panel would generate 4,000 KWh per year. Your NREL inputs yielded 3,731 KWH.

    The difference is not really material to my original argument. What is material however, is your non-inclusion of the 4.1% interest expense in your determination of 10.7 cents/KWh generation cost. Over 15 years, that interest expense is $3,586 which makes your calculation $0.145/KWh. A significant difference. And that is without factoring in the loss of PV output over time.

    But thank you for running some numbers. They serve only to reinforce my original argument.

    I would like to see the numbers that Kerry referred to.

    It seems to me that the 3KW panel and/or the 15 year pay back period was engineered to make the numbers stack up.

    I would love to be proved wrong.

    It also seems that those calculations assumed all solar homes’ generation would offset household purchases. Given the promises made in the policy, that is not a reasonable assumption. At the policy’s $100 per year profit from solar homes’ panels, any more than 625 units per year (==$100/($0.28-$0.12)KWh) sold in to the grid at $0.12 and re-purchased at the policy’s assumed $0.28 cost of purchase, WILL cause the the homeowner to loose money. That is, any more than around 15-17% of the solar panel’s output not used to offset purchases WILL loose them money.

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  191. Really dBuckley. These are not arguments. In the interests of full disclosure, I have no financial or personal ties to any corporate entity that would be materially impacted by the Solar Homes project either positively or negatively. Can you state the same? I am curious where all this fire is coming from, because it appears like wild shooting. For example:

    *”If the policy objective is to make those with a bit of money a bit more money at the expense of those without money, then yeah, maybe you would call it a success. I wouldn’t.” Do you find a pitch like this actually works with people? Speaking from a logic analysis, you have made no assertion about the Solar Homes policy. You made an assertion about what you would consider a success and what I might consider a success under a particular hypothetical situation. You didn’t actually assert the policy would come at the expense of others, although you left the reader with the distinct impression that it might. Well, make up your mind. Do you want to make the accusation or not. If you want to make that assertion that the policy is designed to take people unfairly from one group of people in order to give to another group, then go ahead and make it and support it with facts. Your statement dodges making any such assertion while spreading Fear Uncertainty and Doubt that it might. Considering the present audience reading this thread, why bother engaging in such schoolyard tactics? They are transparent.

    In the scenario, the $14,000 does not from government subsidies, wealth redistribution or anything of the kind. The owner is consuming all their solar output and they simply don’t have to pay the power company that $14,000 over the life of the system. Does it cause harm to Contact or Genesis when my demand for their product goes down? I suppose I am causing harm to one store when I discover I can get a product cheaper from a different source. That is what is going on here. So even if you had made the assertion, the fact is that such a situation would not be considered the least bit unfair to any Kiwi voter.

    *”If the policy objective is to reduce greenhouse gas emissions, then its a PR stunt, because that is a gamble.” This does have an assertion, though a generic one. You are saying that there is something unspecified about Solar homes that does not guarantee that that it will reduce greenhouse gases. The reason why it is generic is that any other scheme that reduces demand of electricity from the grid cannot also not guarantee that it will reduce greenhouse gases. It can be applied to any green policy. There is no guarantee that insulating homes will reduce greenhouse gases. Sure, the electricity demand might go down, but it is a gamble to say that the electricity reduced is not hydro and is coal or gas.

    So really, that proposition may be dismissed as sophistry unless something particular is asserted about Solar Homes to illustrate why it is any more of a gamble in this respect than any other policy to reduce demand which might come from carbon sources.

    *What remains is a policy paper that describes a way for Kiwis to undertake a project that will pay for itself and in many cases result in large savings for home owners. This case has been demonstrated by reference to a rigorous technical model from an authoritative source. By reducing demand for electricity, demand for new fossil fuel generation will be reduced. If there are any lost opportunity costs to the project, these have not been demonstrated by any of the detractors.

    With his arguments in shambles, dBuckley is left to grasp at straws. The distribution harm he suggested in his previous note is also a canard. He already has stated “a system that can generate up to 3KW is unlikely to cause bother to existing infrastructure, and should be permitted with little more than a rubber stamp.” a point he re-iterated later: “homeowner generation systems up to 3KW can reasonably be connected to the existing distribution grid without undue impact to the local network.”

    But Solar Homes is 3KW. So what is the suggested harm to the distribution network. It is just more FUD? Does the paper suggest the enthusiasm for such distributed schemes is all semantic hype and no meat? No. The authors of that rather dated 2003 paper state ask, “the opening question: as with many so-called innovations that have been put forward during the recent past, is the entire concept of distributed generation a simple semantic marketing hype or are we actually at the dawn of a new electric power generation era? We believe that a new electric power production industry is emerging, and that it will rely on a broad array of new technologies. This article sets the stage for distributed generation…” So the article title raises the question whether it is hype and answers it in the negative. Still, whatever generates FUD I suppose is useful if no one actually examines the supposed “supporting” citations.

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  192. Rural Johnny-

    * That interest expense means that the hypothetical auckland owner using all their generated capacity makes $11,000 in savings, not $14,000.
    * The scenario I mentioned required no payback for unused electricity.
    * The scenario used described the warranted life of the system- 25 years in the case of the referenced OZ company. The real life is usually given as 30 years.

    I guess what I am saying is that I must not be properly recalling the structure of your argument because it sounds like you just supported my conclusion- that the policy is plausible. You agree that given a homeowner that used what they generated they would have substantial savings. Most would not see such substantial savings, that is true. I recall your concern that the Greens not be discredited by some owners who would feel burned by the program. However, there was a proposal for a provision that EECA verify the likelihood that the system would be pay for itself. I don’t recall if it was you but the objection there was that it would take more money, to which I responded, So then it takes not 10 years to pay off, but 10 years and one month to pay off. So what. So the question is, with such a provision- Don’t you therefore support the Solar Homes project that would save people money and reduce demand for electricity from generators- many of whom are building new fossil fuel capacity rather than retiring it?

    To review, the proponents of the project have made a plausible case that the Solar Homes will reduce green house gases while saving home owners varying amounts on their electricity bill. Due to the dire consequences if such projects are not approved, the burden of proof is on detractors to show that the program should be blocked. You have made a case that some users might not break even. Everyone agrees that there are many sites with very low solar radiation that won’t.

    Are you just saying that there is not sufficient controls to avoid those scenarios, as well as marginal scenarios?

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  193. Trevor, for the large set of potential good candidates for Solar Homes, I think it is abundantly clear to everyone how important that sell price is. What was your preference on how that be defined? The greens just said that EA would decide a fair and reasonable buy back price that would be stable over time. Do you favor a Feed in Tariff? Or some kind of direct subsidy financed by a carbon tax? Or did you support my sort of scheme, with the understanding from your pov that the number associated with the cost of carbon really shouldn’t be called that?

    The economics will then depend on the price such electricity can be sold at, and whether having a number of solar generators all injecting their power onto the system simultaneously will cause a reduction in the spot price that will probably set that sell price.

    *Ultimately local distribution grids are going to have to evolve to handle some of the scenarios you imagine. We are nowhere near that with the number of 3kw systems involved in the Solar Homes proposal, or do you disagree with dBuckley on that point?

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  194. John – is it just FUD (Fear, Uncertainty, Doubt) to suggest that having significant residential areas becoming net exporters of power might cause problems with fault protection systems that were never designed to handle power flowing in that direction?

    Trevor.

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  195. John – to answer the question in your last post, it depends on which substation the solar homes are connected to. If they are evenly distributed, there probably isn’t a problem. If they are clustered together, then that sub-station could be a problem site. But of course you have no reason to expect that they will be clustered together. It is not as if neighbours talk to each other so one home that installs solar power might trigger several neighbouring homes to do the same, or that the home owners in a position to take this offer up might be in the more affluent suburbs which catch plenty of sunshine rather than the suburbs with high numbers of rental properties or lots of shade.

    Trevor.

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  196. John: Again you do your arguments a disservice by putting words in to my mouth…

    – How many Aucklanders do you think will utilise all of their home gen? 10%?
    – for that 10%, $1,000 of savings over 25 years is a joke. Remember the promises the policy makes.
    – I have no idea what you mean by “required no payback for unused electricity”!
    – pick what ever life span you like, the extra 5 years does not make a significant difference to the economics of a solar homes project.
    – I most certainly do not support your conclusions
    – the plausibility of the policy is not an issue. People will certainly take advantage of the policy and install solar pv panels and that is fine. It is their choice. It is a green choice. It is not an economic choice. The economics of that choice, unless fully understood by those who take it up, will come to discredit the Green party.
    – I do not agree that any home owner, will get “substantial” savings. $100 per year is a far from substantial reward compared to the risk of offsetting less than 85% of the home gen and so making a loss.
    – there is no provision that EECA or the EA verify the economics of a solar homes applicant
    – it is not that I do not support the Solar Homes policy. I believe the policy is misguided and that it will reflect poorly on the Green Party because for some, it will not save them money, will cost some money, despite the promises the policy makes.

    The one thing I do agree with you on, is that it will reduce the demand for electricity from generators. Which means that the generators will need to increase prices to everyone else to ensure the cash flows they need to build new generation.

    For the 90 MW of generation that solar homes will create, there are no possible dire consequences if it does not proceed. In fact, I believe that if the $300 million cost of the program were applied to other projects, the net benefit to people, society, everything, is potentially much greater. I will not go in to what those other projects may be because this discussion is about how the policy will come to discredit the Green Party. that is something that, should it come to pass, would concern me greatly.

    So to be clear. I am NOT just saying that there are not sufficient controls to avoid these scenarios. There are many, many solid reasons for the Greens to NOT proceed with this policy as it is written.

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  197. * “I do not agree that any home owner, will get “substantial” savings.”

    In the case I stated of the Auckland homeowner who used all their solar electricity and did not sell it back to their provider, are you saying the ballpark savings figure of $11,000 is substantially less (after allowing for cost of capital). If so, how do you support that assertion? Or are you saying that $11,000 savings is not substantial?

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  198. @ Trevor- I think anyone would grant you that perhaps in some hive community chockers with Green crystal worshipers, I concede there is a remote chance that this node of a distribution network would have to be upgraded, and the local distribution network operator (in my case Orion) would suffer an expense due to this program. You do admit the scenario is remote though and that if such instances occur that the EECA could react without any explicit rule making or new bills. Presumably they would know not to create such a situation again, by informing the applicant that their proposed system cannot be agreed on because their local substation could be similarly experience difficulties due to the number of solar homes participants already served by the substation.

    So this theoretical difficulty does not present much of a significant objection that the policy as stated would be able to handle. If this is not a fair assessment, then how have I erred?

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  199. Kerry said:
    “Replacing hydro power with solar, or wind, in summer has the same effect as using pumped water storage. Dams start the high demand periods in winter, full. Instead of the common scenario of a dry summer leaving lakes low for the winter. Less need for gas/oil peaking plants.”

    Unfortunately this isn’t correct. Having full hydro dams at the start of winter allows more use of hydro to meet peak and off-peak demand, so it allows us to use less gas/oil/coal base-load generation. The peaking plants are still needed to meet the peak demands. Currently the peak demands are met by ramping up the outputs of both hydro and thermal plants, keeping some in spinning reserve, and this will need to continue becasue we don’t have enough hydro and geothermal to do it alone.

    However it will make very little difference as most years start winter with 2000-4000GWH in the lakes so you would only add another perhaps 2000GWH. (Current annual power usage is around 40,000GWH.)

    Better is to increase our wind generation which has more output than solar in the autumn-winter-early spring period and is thus better able to keep those lakes topped up. Wave, tidal, geothermal, biomass etc would also all be better than solar power in this respect.

    Trevor.

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  200. “Is it just FUD (Fear, Uncertainty, Doubt) to suggest that having significant residential areas becoming net exporters of power might cause problems with fault protection systems that were never designed to handle power flowing in that direction?”

    Of course not. It is a known issue for large amounts of small generators. Are we anywhere near that point? No. But if an individual has already conceded that it is not an issue for 3kw systems, then to suggest that it somehow really is, then FUD is one possible explanation for raising such a self contradictory assertion based on reference to a decade old paper that actually supports distributed systems, though it appears from its title to suggest that the interest in them ten years ago was all hype and exercises in semantic games without any technical significance.

    Citations in support of an argument ought to actually support an argument a person is making. In the case of dBuckley’s reference, if it has some intended meaning other than FUD, it was unclear. In any case, we can’t know for sure because only the abstract is available (That is what I was quoting from) and the rest of the paper is behind a paywall and costs $47 to download.

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  201. @trevor- I am not following your response to Kerry. It seems to me if more wind and other alternatives were available, the hydro levels would not need to be drawn down from winter highs as rapidly. So the summer levels would be higher, and therefore available to be used rather than fossil fuel generation used for baseload and peaking.

    Further, with the enhancement of an additional lower level reservoir, there would be justification to build enormous wind capacity because any excess would not be wasted, but would result in restoration of hydro levels. Do you know of any studies of such an upgrade to major hydro plant in NZ?

    Lastly, In all the commotion I heard no response to more robust HVDC backbone would mitigate intermittency by allowing averaging and smoothing generation from wind and solar over the entire country. A solar farm in Northland might experience cloud cover, but if excess generation from a ripping southerly in the south Island could be dispatched reliably make up for the lower production in the north, then there would be reduced need for spinning reserve based on fossil fuels. Do you know of any studies that evaluate how much MWs from intermittent sources could reliably be treated as baseload if a 21st century Green Grid were in place in NZ? If local excesses can be reliably moved, then this reduces the need for local fossil peaking and baseload. It has no relevance to the current project, but is relevant to future incarnations of solar home policy. With very advanced penetration, this same principle would apply to balancing strategies in a local distribution network. Yes, I do understand this would mean a radically different distribution topology.

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  202. WE are installing a 4kw solar system for several reasons: our incomes have gone down (we are superannuitants) and power prices keep going up; we work from home so can use washing machines etc in daytime; we live in a sunny area and of course prefer sustainable, renewable options.
    Two lots of friends have already installed theirs and get a modest monthly cheque from their supplier.
    Nothing is perfect and we would like to see it made possible for the ordinary family to have more control over their power bills – as well as the climate change issue, I believe this is part of what this policy is trying to achieve.
    Frugality of use is built into having solar as your main generator too – something that is not favoured by the power companies.

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  203. addenda- yes I am aware of the numerous papers that show this is the case for the EU, and the US. I am curious how much can be treated as baseload given NZ’s the smaller geographic area to use for balancing purposes.

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  204. Trevor: Kerry is correct in her statement. Solar replacing hydro in summer allows for storage levels to rise to meet future demands – essentially similar to pumped hydro storage. Also, much of the gas burned (at Huntly at least) is purchased on a take or pay contract, so there is little merit in solar offsetting gas under the present gas supply arrangements.

    What it all highlights is the complexity of scheduling generation assets. It is a subject best left to the experts. I have absolute confidence that those experts will find ways to schedule small scale generators embedded in distribution networks. Just like they will find ways of solving health and safety issues that embedded generation poses. These are not subjects to spend a lot of energy on here. But policy is, and this Solar homes policy is flawed.

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  205. John – I do support a better HVDC backbone, but it doesn’t resolve solar’s biggest drawback. Unfortunately when it is night in the South Island, it also tends to be night in the North Island. (This of course is not as true for countries and regions spanning several timezones such as Australia, Europe or US.) It works a bit better for wind and wave and tidal, although pretty much all New Zealand’s tidal resources are likely to generate at the same time, just not at the same times as the solar, wind and wave resources.

    My point with respect to Kerry’s statement was that we already keep enough water in our hydro lakes to generate at times of peak demand, so adding more water doesn’t give us more peak output. We still need the other resources to meet those peak demands. Allowing the lakes to fill more before the start of winter allows us to reduce our winter fossil-fueled base load generation, but we could run into issues with not having enough generation fired up and ready to generate when we hit peak loads if we do shut down too much base load generation.

    Informal research I have done suggests that we don’t need to build any new reservoirs to add some pumped storage capability. We just need to add pumps between some of our existing lakes or modify some of our existing generators so they can be used as pumps too. With the exception of the Waitaki station itself (being the bottom lake and having a minimum flow requirement), most of the stations in the Waitaki system could be fair game for this. However adding power capacity to these systems comes at a cost, so it is still cheaper to run the pumps longer than to have bigger pumps run for short periods. Thus this still favours intermittent renewable resources with higher capacity factors and more spacial/temporal distribution, i.e. wind rather than solar.

    Trevor.

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  206. rural johnny said:
    “much of the gas burned (at Huntly at least) is purchased on a take or pay contract, so there is little merit in solar offsetting gas under the present gas supply arrangements.”

    Thanks for the reminder. I had overlooked that piece of stupidity and didn’t realise that it was still in place. That explains why the gentailers are still burning so much gas and have put their wind and geothermal projects on hold (except for Meridian). What we need is for those take or pay contracts to be renegotiated so that the gas can be left in the ground for longer but the gentailers still pay for it, effectively pre-paying for the gas that they can use later. Or something like that.

    While those contracts are still running, adding your renewable energy systems just means that the gentailers can delay building theirs, with very little savings in CO2 emissions.

    That gas is much too valuable to waste that way.

    Trevor.

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  207. @rural johnny If it is flawed, then you need to explain why $11,000 is insubstantial. This is not the only extraordinary claim in your list of “weaknesses”, but a simple enough place to start. Perhaps you could reread my question to you and give us some insight on your reasoning.

    Better, you might focus on constructive criticism- like what you would like to see in order for a solar homes policy to be acceptable. All we have heard is about is why we should say no. In order to move forward, we need to hear from detractors what they’d like to see in order for them to say yes. I don’t believe I have heard a single item on that score from you. You claim ” it is not that I do not support the Solar Homes policy”, yet simultaneously you conclude with this statement: “There are many, many solid reasons for the Greens to NOT proceed with this policy as it is written.” Ok. So what are we to make of these two statements. We ought not think that you don’t suppport the Solar Homes Policy when you say you don’t support the Solar Homes policy as written? You see why people might be confused about what you are attempting to state? If there is some similar Solar Homes policy that you would support, we have no idea what that might be.

    There are other points of self contradiction, but let’s just start with your statement about how no one will get substantial savings, yet you agree that there are cases where some owners will make on the order of $11,000. It is nonsensical to then turn around and state that the scenario is plausible, but does not make economic sense. What are you talking about? Saving $11K does not make economic sense?

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  208. “much of the gas burned (at Huntly at least) is purchased on a take or pay contract, so there is little merit in solar offsetting gas under the present gas supply arrangements.”

    There is merit if when the purchaser takes the gas, the supplier is forced to pay the cost of carbon. If the suppliers are now losing money every time a generator is taking, then they will be highly motivated to renegotiate those take or pay contracts.

    You guys sure you don’t want to reconsider your opposition to establishing an official NZ figure for the cost of carbon? Frankly, I am baffled what harm there is in employing this tool. I can imagine a lot of reasons why the fossil fuel suppliers and the generators would absolutely hate, it, but it I see immense upsides for pursuing Green energy policy goals.

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  209. John – I just don’t see much value in New Zealand trying to work out a cost of carbon given that CO2 blows across all nations’ borders. Providing it is significantly higher than the CO2 tax or ETS cost, the CO2 tax or ETS cost should be set high enough to reduce our emissions. Right now, our CO2 charge (via the ETS) is much much lower than it needs to be, so I just don’t see why we need more delays while some group tries to calculate a new value. Why not use values already worked out by other groups?

    Can you see the NActs supporting an official NZ cost of carbon figure – at least one that you would also support? If not, then who would pay for it?

    Trevor.

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  210. John

    National would see to it that the “cost” found was in the neighbourhood of $10.

    The harm would be that at any level LOWER than that which forces the utilities to look for carbon neutral generation, it encourages more CO2 emissions.

    We CAN establish one as a party, based on the more simple methods I referred to or by doing the work to establish it, and then watch as the NZ process of interminable argument completely paralyzes efforts to actually do what is necessary.

    ———————————-

    It is impressive that process of interminable argument. I see it at work here. I turned around, accepted the solar policy as OK but inadequate and somewhat but not fatally flawed, and went back to the party with a suggestion to extend and improve.

    Three days later you lot (and I am including you Trevor and DBuckley and Rural John too), are still at it.

    Some of us seem to be stuck on the clear disadvantages that Solar has at higher latitudes and with long cool winters here. Those disadvantages do not make it necessarily a failure in SOME parts of the country and for SOME people here. If it can work even to a break even level for them it is acceptable.

    Those disadvantages however, are extremely important when choosing what methods of generation or conservation we choose to support. Accept them.

    Yet the fact is that the money to do it is organized to come mostly from the people who do it… over time and at a reduced interest rate. It is NOT MONEY THE GOVERNMENT HAS. It is NOT money that is available to spend on other more efficient and effective measures for the society as a whole. It isn’t there to be spent on other things. It belongs to the individuals who happen to be deciding to take up the low interest loan to do it based on their fortunate location in the sunnier Northland.

    Which makes this policy favour the wealthier people in our society… or target them… if you wish. I just don’t think you’re all doing yourselves any favours here. A little respect goes a long way.

    OTOH, hasty insults offered earlier in this thread may have something to do with the intransigence on offer now.

    I know you all don’t like to be “wrong” but as near as I can tell each of you is “stuck” on a thing that you’re right about and unwilling to accept that you’re wrong about something else. Which allows you all to be arguing past each other, essentially forever. Even when on the major point you all actually agree. If I hadn’t seen it before I wouldn’t believe it.

    BJ

    BJ

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  211. You misunderstand my purpose here BjChip. I am taking the measure of dynamics in play. I am not a young pup and so perhaps I could be dismissed as one of those more elderly fellows who confidently solve the world’s problems in chats with neighbors, or do the same in a more belligerent but similarly impotent fashion posing as a pezzonovante in the modern day venue of blogs. The place for measured tone, methodical argument and extremely careful listening in an atmosphere of trust and mutual respect is in a forum of persuadable players who are in a position to implement policy. Even then, you cannot be sure if what won the day was the force of your argument, or their political calculation of the consequences of refusal to compromise with you. As for public venues? If anything, I find that many of those who have a deliberate well thought out agenda relish the opportunity to distract and dishearten their opposites with endless debates. Meanwhile those in power continue to do precisely as they please regardless which party has won the most number of seats. It doesn’t matter really if the obstructionists expressing themselves on blogs like this are conscious or not of the assistance they are rendering to the destruction of the global climate. The reason why it doesn’t is that they are not representative of persuadable voters. I’m not saying the activity is purposeless, because bloggers can bring to the surface the sorts of ideas that will be in play in the minds of persuadable voters. With such knowledge, there can be internal discussions about how political players can use their talents to respond publicly in order to effectively win over the largest number of persuadable voters given those propositions.

    At the end of the day the battle is won at the ballot box, and with sufficient votes in parliament to get policies like Solar Homes implemented in law. Concerning your point about use of rhetoric, I thoroughly agree- It is patently obvious that the way you win seats on election day has little to do with the tactics employed in this thread. If anything, they are precisely the tactics that would turn off a persuadable voter. Well- I suppose I should take a bit of that back. Drama and humor are important, and so is ridicule though applied with the left hand, a smile and the upward thrust of a small blade between the ribs. Certainly not slopped about wildly in such acidic concentrations.

    I have some ideas on what contribution I can make, but they have little relevance to the upcoming election and are not a matter for public discussion. There simply is not sufficient time, and in any case the activities would necessarily be outside of the party though the goal would be to alter the power balance by getting far more Green MPs elected.

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  212. BJ – I agree that there is much heat and little light in some of these discussions, but some of that light caught a small glimmer from a nugget of truth deep in one corner, and that nugget is not small. Several of our major power companies are acting they way they do in burning gas and putting their renewable generation projects on hold because “the economic conditions aren’t right”, citing the lack of recent growth in electricity demand. What they have NOT been citing is their “take or pay” contracts for the gas that they are burning. Until those contracts expire and/or the gas runs out, they will not be significantly cutting back on their gas usage, no matter how many solar panels you install. That is where attention needs to be focussed.

    Not everything is lost however. Genesis are reducing their coal burning, which is good news as the coal has higher CO2 emissions than gas.

    Trevor.

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  213. BJChip- we essentially agree that “The meaningful number is the tax/price put on the CO2 emission”[note1]. If an NZ agency determines through modeling that the cost of carbon is $100 per ton or $150 per ton, it doesn’t matter if that cost is not imposed in some way on those who are extracting the fossil fuels or emitting it.

    But you also state the following:

    National would see to it that the “cost” found was in the neighbourhood of $10.

    The harm would be that at any level LOWER than that which forces the utilities to look for carbon neutral generation, it encourages more CO2 emissions.

    An opponent to putting a tax/price could make exactly the same objection you just made. National would set it to $10 per ton. Presumably you would not think the argument has any validity for the policy you favour, but do think it has validity for the policy you oppose. Perhaps you can help me understand why this is not a generic objection.

    But quite beyond that apparent self contradiction, the argument is basically saying, it is futile because National will do what they want when in power. Of course. So let’s just work through the details of that scenario. First off, they would reduce the various price/taxes through simple acts of parliament. But look at what they would have to do to influence the calculated LTCC. Assessing the cost of carbon using such a model requires the politician to move out of the realm of political assertions and into the realm of science. Say under a future Green/Labour government this LTCC (long term cost of carbon) gets worked out by an NZ agency [note2] to something in the range of what was being stated as a low end in those papers I made reference to- say between $86 and $100. Other Green bills extract this price/tax from the emitters and drillers. So what happens when National gets back in power- they sweep away these laws with the usual arguments that the taxes are retarding our GDP etc. But they also want to severely reduce the LTCC so they also write a bill giving new guidance to NZ agency in order to influence them to re-evaluate the the LTCC downward. To accomplish this, they would be forced to instruct the agency to disregard the costs of various phenomena- like the impact superstorms or the affect of ice melt in the arctic and Greenland.

    Now they have a problem, because voters will agree National is entitled to their opinions, but they are not entitled to their facts. They probably would not be deterred and issue the new guidance to the NZ agency, but inevitably there will be stories of superstorms and huge ice melts. During such events of intense media coverage on whatever the disaster is, Green MPs will easily be able to put out some choice sound bites on how National is anti science, not interested in the truth about climate change etc. Firebrands can get much more rude, portraying National as lackeys of Big Oil engaged in disinformation and so on and so forth. After a few such body blows in the polls, conservatives will have little stomach for playing around with the LTCC. After they get burned on it, the LTCC will tends to become untouchable. It will steadily increase as particular climate costs become established with high enough certainty for the NZ agency.

    [note1] That is, with the modification I believe you probably agree with that we are interested in eliminating every category of carbon emission. Not just CO2. For example, emissions of methane such as from fracking has 25 times the greenhouse gas impact as CO2.

    [note2] This need not be replicative or expensive. The NZ agency might not calculate it from scratch, but run the same models and data that the agency views as most realistic and respected in the science community. Contrary to your prior assertions, it would not be necessary for these to model regional climate. That would be a nice research for OZ and NZ to fund, but it would not be crucial to the LTCC. Trevor continues to assert that the number be globally agreed on, but this is only true in the context of particular policy responses, such as a global carbon credit scheme. Just because China sets there LTCC to $5 per ton does not constrain our ability to set it to $150. The objection is immediately raised that it does because such a unilateral move whether through LTCC, taxes or any other scheme has a severe impact on our comparative competitiveness- that global markets will punish us by refusing to buy the resulting high priced NZ exports and so on.

    But scratch the surface of that fatalistic argument and what you find is the classic prisoner’s dilemma. As pointed out in that link, what is different is the uncertainty of the projections. The way NZ escapes this fate is through a Green Autarky coalition of largely carbon free economies.

    So really, ANY price/tax is NOT predicated on the entire globe coming to agreement. My response as you know is that a Green Autarky is the solution to the carbon economy prisoner’s dilemma. Putting aside your objections to LTCC, understand it is the same dilemma as a price/tax. It CAN unilaterally be set high enough to have significant impact on emissions without destroying NZ’s trade if a Green Autarky of trade agreements is set up. Students of political science may hear echoes of Engels in here, but the similarities are superficial. This is a market based approach- it simply cuts out that little bit about carbon centrism for participant countries.

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  214. The big problem to be solved when it comes to increasing our renewable electricity generation to 90% and higher is meeting our winter power requirements, particularly our winter peak requirements, and particularly in the North island. Currently these are met with the assistance of around 2.4GW of coal, gas and co-gen capacity, all of which is located in the North Island, along with 150MW of diesel generation. It is this generation – around 2.5GW worth – that we need to find alternatives for.

    The HVDC link can only be relied on for 700MW. When operated above this, extra reserve capacity needs to be spinning in the receiving island in case either pole develops a fault. Peak North Island winter demand is normally in the evenings and is around 4.2GW, so we are at least 1GW short of renewable generation in the North Island. Solar is no help at this time because these peaks occur after sunset. Wind, wave and tidal cannot be relied on to generate at a specific time. So the choices are hydro, geothermal and biomass.

    We could build new geothermal or hydro plants, but the suitable sites are running out.

    We could build big digestors for converting biomass into natural gas, store that for when it is needed and use that to run some of our gas-fired peakers, such as Contact Energy’s Stratford units.

    We could modify our existing hydro stations to increase their peak output, but this would drain the lakes faster. To allow us to keep these lakes topped up, we can boost our wind generation capacity and add pumping capacity to some of our suitable hydro stations. Wave and tidal generation systems also have good output levels during winter too, so those might be options.

    We also have the option of using biomass for baseload generation, such as using wood chips or charcoal to fire up one of the Huntly coal units, but I would suggest keeping this as a dry-year reserve.

    Where does solar PV fit into this? Well, it doesn’t really. The output over winter is low and not when it is really needed, and the cost is high. If the amount of solar PV exceeds about 1.5GW peak, then to make use of all its output, we will need to build even more storage capability, which is not likely to be cost-effective. Better to invest in other forms of generation whose output is less uneven and less affected by the seasons.

    And yes BJ, I read your comment about the loans not being available for other generation. However if solar PV is to break even competing with much cheaper wind and geothermal plant (per kWH generated), someone will end up paying the difference – probably either the other electricity consumers or the power companies. I suspect that this will be caused by the costs associated with keeping the electrical supply system operating properly complete with frequency keeping and reserves of spinning generation will end up falling more on the other power consumers. If cheap loans can be made available to the homeowner for solar PV installations, then they can also be made available for insulation and other efficiency improvements.

    Respectfully,

    Trevor.

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  215. Trevor: It’s a good summary though from your positive statement on HVDC and inference about where the pumped storage is located that you intended to include that you’d beef up that HVDC interconnect at least. If you want to emphasize why winter should be considered the highest priority in reducing fossil fuel dependence, then it would be helpful to at least include one factual statistic- such as massive fossil fuel burning in winter- to back it up. I have not seen any such statistic.

    Now, for the errors of logic.
    * You allow that excess wind could use stored hydro but exclude solar. Sure, on the lowest solar radiation days of winter, the output is a little more than one third in the worst months. But the number is not zero and the power from the day could be shifted to the night. So the only point here really is that Solar Homes helps in winter, but if the owner installed a wind turbine, they would be helping more. But some owners refuse that option.
    * You ask ” If the amount of solar PV exceeds about 1.5GW peak…” The subject is Solar Homes. 90MW. You are describing the impact of 14 Solar Homes projects, a non existent impact of this project. So you are using a straw man argument, a tool of deceit.
    * Your assertion about financial harm is tenuous at best. Using your reasoning, if I determine that a luxury store is selling the same brand of bread for twice the price, if I refuse to patronize that store, then what I am doing is forcing the owner of that store to raise prices. Shame on me for causing the customers of the luxury store to suffer. Are you serious? Think about it. For that hypothetical Auckland homeowner, they are going to save around $11K by participating in Solar Homes, so why should they buy the more expensive bread?
    * The structure of this argument does a bait and switch. It says, here is a high priority problem we need to address. I grant you it is probably one we should focus the most resources on. But it is a fallacy to shift that proposition to the idea that it is the only problem that drives fossil fuel burning. Even if you show that it is the biggest driver of fossil fuel burning, the conclusion simply doesn’t follow. If there are other causes of that demand and this or another project is fighting them while paying for itself then this winter problem line of argument has no merit. Metaphorically, if someone has the tools to put out a small fire but not the different kind of big fire you are pointing to, that doesn’t mean you should stop them from putting out a smaller fire they can put out. There IS substantial fossil fuel burning in summer and if that hypothetical auckland solar owner chooses not to participate in Solar Homes due to your argument, they actually would be increasing demand for fossil powered electricity.

    So really though we agree strongly on nearly all the projects you enumerated we should be doing, your argument against Solar Homes is in shambles. We cannot succumb to engineering fervor about what the one true optimal solution is. If a project is helping, it is helping. If it were a zero sum financing proposition with limited resources, you’d at least have a plausible basis to focus your efforts on obstruction. But this isn’t the case.

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  216. John – reading Gareth’s rhetoric (can’t remember it? Try scrolling right to the top of this page), I get the impression he doesn’t want to stop at just 30k installations. Why train up enough people to install that many panels and then tell them they are redundant?

    I never stated or implied that hydro storage couldn’t also store the output from solar panels, or that solar panels had no output in winter, just that solar panels have no output at the times of winter peak demand. What I am saying is that if we can meet our winter peak demands and have enough wind and other generation to meet our average winter needs without running the lakes dangerously low, then we will have enough generation to meet our summer needs as well.

    I have not said that your hypothetical home owner shouldn’t take this up and switch to cheaper power, but I am asking why it is cheaper and the answers I see point to it being a form of subsidy, raising the costs to other power consumers such as people renting. If the costs of solar power were comparable with other renewable energy options, I wouldn’t have an objection on these grounds, but it is much more expensive.

    You haven’t made your bait and switch argument either. Specifically you haven’t shown that solar PV systems would reduce the fossil fuel being burned for anything other than electricity generation.

    Trevor.

    PS: Maths doesn’t seem to be your strong point. 1.5GW/90MW is not 14 but closer to 17.

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  217. *”I get the impression he doesn’t want to stop at just 30k installations.” Impressions are fine, and possibly Gareth is a sneaky guy. But you could say, I support this project in its current scope but I shall withdraw my support if it becomes an order of magnitude larger (14x or 16.7x depending on what hour of the morning you are writing at ;-) ) The matter before us is 90mw nameplate: maximum theoretical output. Bringing up 1.5gw is a straw man. But you knew that, right? Oh, you naughty, naughty boy.

    *”Specifically you haven’t shown that solar PV systems would reduce the fossil fuel being burned for anything other than electricity generation.” Sure, it is the skeptic’s burden of proof response. How do you respond to the point that the “objection” can be raised for insulation or wind? If it is an invalid objection for them, it is an invalid objection for solar. There is no way to prove that cuts in demand due to home wind generation or home insulation is displacing fossil not hydro either. So should we stop doing insulation or wind? Absence of an affirmative proof establishing certainty is not convincing in the case of dire circumstances. The aggregate of all this obstructionism is a decade of inaction. We have a 40 year window. That is it, and the climate will be irreversibly damaged. We return to where the burden of proof is. It is on the obstructionists. So either refute the burden of proof argument (both you and dBuckley have repeatedly declined), or present a case that affirms that solar cannot possibly in any circumstances displace fossil. Your choice. Until you do so convincingly, this argument has no merit.

    Mind you, I am with you that winter peak appears to be something that should be the focus of significant resources. I would like to see those winter fossil burning figures though. If there is no enormous spike I will become more skeptical.

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  218. I forgot you brought up the subsidy canard again.
    *” the answers I see point to it being a form of subsidy, raising the costs to other power consumers such as people renting. ” Oh? The only transfer you could point to in the Auckland example was that because they were buying less electricity, the company would have less income, therefore they would have to charge their customers more. That’s not a subsidy, that’s me being a good consumer and not spending an extra $11,000 that I don’t have to.

    It’s called free enterprise. The utilities are really big on it until the little guys attempt to horn in on their action.

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  219. Really dBuckley. These are not arguments.

    John, I’m not making arguments. I’m stating facts. Fact that have been settled, well, since Tesla and Westinghouse were changing the world.

    But, I’ve (finally?) twigged that to some people, facts actually don’t matter. So, I’m going to leave you to your opinions and arguments.

    In the interests of full disclosure, I have no financial or personal ties to any corporate entity that would be materially impacted by the Solar Homes project either positively or negatively. Can you state the same?

    Absolutely.

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  220. Here is a Wikipedia link that has several citations to authoritative sources that describe the proper relationship between logic and fact that compose a well formed argument. But if you can’t be bothered to form one, then that of course is your option.

    Argument: (n.) a reason or set of reasons given with the aim of persuading others that an action or idea is right or wrong.

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  221. “This election we are giving Kiwis a choice: … with the Greens cheaper power bills and a vision for a clean energy future, with insulation under your roof and solar panels on the top.”

    This does not sound like a pitch aimed at just 30,000 voters to me. 30,000 votes might get Gareth into parliament but it won’t be enough to get other Green candidates in too.

    And John, I didn’t see an answer to my question “Why train up enough people to install that many panels and then tell them they are redundant?”

    Trevor.

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  222. John – take the case of a single person leading a frugal life in a house with a 3kW solar panel selling electricity during the day and using less electricity each night than is sold during the day. If the buy and sell prices are comparable, do you think that it is reasonable for this person to pay no electricity charges? If so, you don’t thing that it is a subsidy for other power consumers to pay for this person to have a connection to the grid, pay for the meters to keep track of the usage, and pay to have enough reserve generation spinning to provide a steady 230V 50Hz AC supply to the boundary of this person’s property pretty much irrespective of how much power this person supplies or consumes?

    Try applying duck-typing (or should that be canard-typing? :) ).

    Trevor.

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  223. I await your explanation why the $11,000 Auckland solar home owner is getting is a subsidy.

    Trevor: “take the case of a single person…”
    What happened to the Auckland case? Have you given up trying to deny they will make $11K in savings? But ok, let’s look at your case.
    “selling electricity during the day and using less electricity each night than is sold during the day.”
    Ok, that is definitely not the Auckland case, because the Auckland owner was using all their solar electricity during the day and selling nothing back. But go on…
    “If the buy and sell prices are comparable, do you think that it is reasonable for this person to pay no electricity charges”
    Certainly not. In the first place I question the premise of the question. Such pricing is not what Solar Homes proposes, so why is it relevant to the discussion? The second odd thing about the premise is that it suggests what is being proposed is not really a market at all. If there is no spread between buy and sell, there will be no electricity market- what vendor would show up? So this premise is really a hidden assertion that the proposal embodies some market fundamentalist’s nightmare of who the Greens “really are”. They aren’t ghouls out to destroy the economic system. Yes, people still buy low and sell high in the Green economy.

    But ok ok, given the fallacious premise, I can still answer that even though the situation would be extraordinary- its not what Solar Homes says but hypothetically I could imagine that situation with some incentive scheme to reward early adopters. But even in this case I don’t think it would be reasonable that the generator pay nothing. The Solar Home owner in this case would be using the distribution network to move their excess even if it just a short distance (in this early scenario not far and with insignificant impact to the network because of the tiny amounts and that the node electricity usage never goes backwards). But regardless the fair size of the compensation in this case, it is fair for that vendor to charge some non zero fee. They own the lines and have to care for them.

    So what you are saying is that if we assume that Solar Homes proposed things it is not proposing, then we could assume that this Not-Solar-Homes policy might be a subsidy if I agreed that Solar generators use the distribution grid for free.
    1) but I don’t agree they should use the distribution grid for free
    2) and besides, we are not discussing the Solar Homes policy because it does not propose these things.

    Your exercise sir, is what is called a canard. Once again, I await your explanation why the $11,000 Auckland solar home owner is getting is a subsidy.

    Q: “Why train up enough people to install that many panels and then tell them they are redundant?”

    Put the shoe on the other foot. You and I like dams. What if our opponents came at us with this formula? Would we view it as a valid objection? That is the opponents might say: “This dam, though it has no specific harm is really just part of your dam agenda to built 1000 dams on all of NZ’s rivers. If you build this one dam, you will want to build 100 more, and if you don’t build another then all the dam workers will be fired.” Valid or invalid? Let’s not assign validity on what we want to be true due to the goals we want to achieve. Let’s look at whether the rationale is valid independent of our support or opposition.

    You are attempting to say that we are not discussing Solar Homes but the entire future of Solar in NZ. That your support of a particular decision is predicated on acceptance of what it may or may not lead to. That is the rationale of an absolutist whose is unable to go along with any initiative no matter how little real harm the particular project does. So I first have a process objection. This is a formula for inability to compromise.

    Now to the specific harm of causing unemployment if there is no future demand. If the business model of Vector and other solar vendors are wrong and there is no future in selling panels to NZ consumers, then the companies doing installations will have steadily fewer jobs doing those sorts of installations. But they are transferable. Sparkies rigging up connections to inverters, isolation and separate metering will draw on similar skills needed for wind and possibly EV hookups. Maybe laying racks on roofs and having an app tell them the optimal positioning for the site will be obsolete. If solar was no longer in the ascendant, if I were running a company, I’d diversify into wind and maybe be taking other contracts that were not generation related. Give business owners some credit.

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  224. John: Plausible is a word that you introduced to this discussion, so a definition for you:
    plausible |ˈplɔːzɪb(ə)l| adjective
    (of an argument or statement) seeming reasonable or probable

    I focus on the “seeming” part of your argument. It only seems reasonable but get behind the numbers (as I did from my very first post) and you will see that whilst plausible, the Solar Homes policy is discreditable. And that is the issue first raised – that this policy may come to bite the Greens in the bum because it does not work economically.

    You challenge every body else to justify their arguments but do not do so yourself when it comes to simple numbers. Instead you obfuscate your arguments in so many words of intangible relevance.

    For example, $11,000 is the figure you use for the hypothetical Auckland household that uses all of its solar generation to offset purchases.

    But you have not justified the $11,000. Do the numbers John. You will find that figure is simply wrong. By the way, do an NPV calculation to discover the present day value of those future savings (I used a 7% rate) and you will see that the time value of those cash flows is not substantial and is a return that is not worth the risk associated with those future cash flows.

    Further, you use your hypothetical construct as a sufficient justification for the Solar Homes policy. Are you saying that if it works for that Auckland household, then it must be a good policy? But you either ignore or introduce spurious and false arguments (e.g. that EECA will vet applications) to counter other solid arguments that demonstrate the opposite. Recall that my concern was with those households that buy in to the Solar homes policy only to find that it actually costs them money. I have given the numbers behind that argument.

    Again I say, and this point you have studiously ignored, my issue is about a loss of credibility that this policy exposes the Green Party to.

    Finally, it is not inconsistent for me to hold the view that ” it is not that I do not support the Solar Homes policy” contemporaneously with the view that “There are many, many solid reasons for the Greens to NOT proceed with this policy as it is written.” You will make of these two statements whatever you want to perpetuate your argumentative desires, however my use of the double negative does not imply the positive (that I support the policy). I am actually neutral about the policy but against the economic basis and arguments that are used to justify it. For the reasons previously stated. And despite your assertion, I have offered two ways forward

    Please resist the temptation to respond in your usual verbose manner. Do the numbers John.

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  225. The number of people needed to install 30,000 solar PV systems is significantly higher than the number of sparkies required to connect up 30 wind turbines of 3MW capacity each. Many of the solar PV installers would not need to be sparkies, as most of the work is installing the frames and fitting the panels to the frames, and taking the required steps to stop stormwater entering the house through all the holes they need to make in the roof.

    And please don’t keep typing mw (milliWatts) when you mean MW (MegaWatts). All SI (metric) prefix symbols for multipliers of 1 million or higher (M=mega=10^6, G=giga=10^9, T=tera=10^12, P=peta=10^15, etc) are capitalised:
    http://physics.nist.gov/cuu/Units/prefixes.html

    Trevor.

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  226. Rural Johnny: You early thanked me for running the numbers but now assert I did not. I did the numbers using an official source. You did not. I pointed that the figure of $14,251 did not include the cost of capital. You offered that the cost of capital would be $3,586, suggesting that this in some way was fatal. Ok, we are down to $10,665.

    I provided a calculation and accepted your amendment. What additional subtraction ought to be made to this figure and why? If you have no response, then you concede that there are owners that this program makes good economic sense for.

    Was that too many words for you? Your argument is in shambles.

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  227. Trevor: “taking the required steps to stop stormwater entering the house through all the holes they need to make in the roof.”

    You are talking as if plugging in panel modules involved specialized non transferable skills akin to rocket science. Give me a break. Take the steps to avoid stormwater leakage- Any journeyman chippy has that skill and it is highly transferable to other tasks.

    Solar Homes will cause unemployment! Boy that is a cute one. You get two points for trying though.

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  228. John: Again you resort to obfuscation and ignore the substantive argument.

    I thanked you for running ‘some’ numbers. Those were NREL’s numbers and referred to solar array outputs. My invitation to you was to run numbers on the economics of that output. Instead of doing so, you have again resorted to insults. Do the numbers I referred to John. Or do you need assistance with the maths?

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  229. $11K is the figure I have given. I have provided the calculation, accepting the capital cost figure you suggested. You decline to show where the $11K is wrong or why a homeowner should necessarily conclude that saving $11K is not an economically sound decision.

    It is an absurd position you are trying to argue, but go right ahead.

    Your move.

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  230. Is ad hominem all you have left? Labeling something childish does not make it so.

    Let’s review the back of the envelope calculation:
    NREL give a power calculation for Auckland of 3731 kwhs for a 3kw array
    The Auckland owner consumes all the electricity they generate.

    The lifetime of the panels is 30 years, but we are going to be generous to rural johhny and just use the 25 year warranted lifetime.

    93,275 kwhs generated are generated over the warranted lifetime.

    Most Kiwis presume the electricity companies will continue to gouge them but let’s be generous and assume that by some miracle the price of electricity goes no higher than .26 in constant 2014 dollars. That means the owner would have had to pay $24,251 for that electricity. Instead, they will have to pay $10,000 plus the cost of borrowing (interest paid – using rj figure is $3,586). So the Owner is ahead by $10,655.

    Rural Johnny asserts “there is no economic sense for home owners to take up the Solar Homes offer” He challenges me to provide a case where it would make sense and apparently feels a savings of $10,655 makes no economic sense.

    He thinks the calculation provided him is the product of a childish game, but declines to state where the error is.

    Your position as I have pointed out is untenable. I can imagine a few things you could say to try to chisel into that $11K, but you have a long way to go to get into negative territory. Your situation is hopeless.

    So why not just man up and retract your statement. $11K of savings makes economic sense to this home owner.

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  231. John – I see that you have accepted the 3731kWH figure for the 3kW array. A quick calculation gives a capacity factor of 14% – not quite as good as the 15% figure I have been using but the difference is small enough.

    What you didn’t include was the degradation of the panel – roughly 25% over 25 years. Multiply by 87.5% to get the average output during this time – 81,616kWH, worth $21,220 – a difference of $3031.

    You also didn’t include any maintenance costs. If the PV system includes a single-phase inverter, it will probably need to be refurbished during this period as its capacitors are likely to dry out.

    I take it you are not going to insure the panel and system?

    Trevor.

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  232. John – you are the one who mentioned unemployment, putting words into my mouth again. I said that the scheme would train people and make them redundant if it wasn’t continued. Presumably most of these people would not already be in employment – net effect on employment still zero.

    If you want to justify the Solar Homes scheme as a training system, fine but call it that. However Gareth (remember him?) was claiming that it would build jobs.

    You were also claiming that the people trained as sparkies would then be able to work on wind turbines. I was just pointing out that there wasn’t much work for sparkies on wind turbines, and that many of the solar panel workers wouldn’t be sparkies. I agree that the training to keep the water out isn’t rocket science – not so sure that “Any journeyman chippy has that skill” given the problems we have seen with leaky homes though. However you have just admitted that the training – while it may be transferable (except not much call for that when building wind turbines) – isn’t actually much.

    But getting back to the original point – is this 30,000 homes a pilot scheme for a bigger plan or is all that is planned? Seems a lot of fuss for a scheme that will add an average of just 14MW of renewable energy to help meet our 5GW average power consumption.

    Trevor.

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  233. “you have accepted the 3731kWH figure…”

    Accepted it? I myself introduced the 3731kwh pa figure into the conversation, rejecting rural johnny’s more generous 4000 kwhr. I am interested in a coherent case based on facts from reputable sources regardless whether the facts are favourable or not. The so called “capacity factor” ought never be considered a static coefficient. It is dependent on solar radiance at the site, and this can be radically different in NZ. The solar homes paper specified 3500 as a typical figure, and this is fair. Wellington is right at this according to NREL, and Christchurch is 200 below. So the policy paper’s statement of the general case is probably about right.

    Anyway, regarding 4mwh per annum- random unsupported assertions from self appointed experts are useless.

    * Yes, you are right about the inverter and maintenance, but I don’t see that this introduces showstopper costs.

    * Considering life factor is of course fair, but overall it opens up a can of worms that when you sum everything actually increases our frugal Auckland Homeowner’s savings. Here’s why. First off, the degradation could be as great as you stated iff the homeowner used thin film modules. Presumably our Auckland owner has been competently advised. I note you are using a degradation factor which averages results from different technologies. Personally, I would specify monocrystaline or multi but not thin film to installers until such time as the manufacturers get their degradation factor under better control. In a survey of global degradation studies, monocrystalline went down typically less than half a percent, multichrystaline did better than mono, and thin film degraded more than 1% per year. (source:NREL) Maybe EECA would be exercising proper technical control and would approve only Mono or Multi, but maybe not- these details are unspecified. But for this example of the plausible frugal Auckland homeowner, they will be warned about this factor and choose the commonly available Monocrystalline Silicon panels due to the longer lifetimes. So I agree the cost should definitely appear, but I will only go along with a degradation factor of .5% bringing the degradation 12.5% over 25 years resulting in a rough discount figure to $1515.

    But now that we are into looking at degradation factors and plausible service lifetime let’s face it- these cells are essentially rocks that make electricity and as long as the owner fixes any moisture leaks to the modules, they will be generating power decades past the 30 year lifetime that industry calculates for them. Even then- the only damage they will typically suffer is the contacts will corrode and will have to be re soldered. Big deal. So if I had been less generous with rj and used the 30 year lifetime, the Auckland owner would be $15,515 ahead, not $10,655. Adding in degradation factor, we would be at $13,333 minus the maintenance. If I wanted to be mean, we could stipulate that this family of the “frugal homeowner” would be fastidious with their cells and many could be generating electricity decades past even this limit. After 40 years, they would have a $21,336 savings, and at 50 years a $28,854 savings (including rough degradation figures).

    At best the degradation- lifetime minutiae works out to a wash for the solar skeptic.

    There are a lot of disadvantages to PV, but longevity and lower maintenance costs is one of the advantages it has over mechanical generation systems. Maybe this accounts for most of the reason why the levelized costs of PV in the EIA study were not as skewed in favor of wind and hydro as one otherwise would have expected.

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  234. * “Presumably most of these people would not already be in employment”

    I don’t share that presumption. I presume they would move up from low paying McJobs.

    *”If you want to justify the Solar Homes scheme as a training system”

    It is justified as a sensible economic decision by home owners. So far you and RJ haven’t disproved this, and the burden of proof is on you to do so. It also produces demand for skilled labor- an idea you concede is at worst neutral, but could be net positive.

    So really, you are not making much progress proving logically why Solar Homes ought to be blocked.

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  235. “I don’t share that presumption. I presume they would move up from low paying McJobs.”

    So when the Solar Homes scheme has installed its 30,000 units, these people try to move back to their McJobs but find that some else has taken those jobs. But now they are skilled – with a skill any journeyman chippie has. Still not building jobs.

    Actually I haven’t been claiming that the Solar Homes scheme isn’t going to be a good deal for some home owners. I have been asking you to prove that it is, and asking who ends up paying for it. I feel no burden to prove that it wouldn’t be a sensible decision by home owners at all.

    Trevor.

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  236. Good Grief! You guys are STILL at it. Can’t you work out what you are doing? SERIOUSLY!!! You are, EACH of you, right about a PART of this and you are all completely unwilling to be wrong about the parts you are wrong about, and each of you are making errors.

    Just stop. All of you. DO NOT POST HERE ANY MORE!!!!

    I can’t pay attention to this nonsense. EACH of you does agree that we have to stop emitting more CO2 and EACH of you does agree that we have to take action to make that happen.

    Leave it at that. DON’T POST IN THIS THREAD ANY MORE!!!

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  237. I believe Trevor continues to oppose the Solar Homes policy, BjChip.

    Is that not so Trevor?

    I believe we are making progress here. Ultimately the value of these interactions (at least to me as I mentioned earlier) is to reveal the sorts of arguments opponents will use to attempt to influence public opinion. The same could be said of Parliament Q&A. Is either side persuadable by information and argument presented? Rarily. Are useful bits coming out of it? I think Trevor valued the point about take or pay very recently and for my part I think the labor disruption proposition is a cute one. Now I seriously doubt Trevor had any malevolent intention to use it in favor of the carbon economy, but you can count on hearing that sort of pitch from National.

    Rural Johnny also appears to sincerely care about Green credibility but we can fully expect his line of attack from National- That Greens in general and this policy in specific is not economically sensible. They flatter themselves as Trevor appears to, that they are achieving a pedagogical goal in “educating” their less learned opponents how numbers and stuff works. That is a form of patronizing subtext common to all National memes. They claim that Greens are well intentioned, and if only they did the calculations properly they would see that their proposal is counterproductive. So vote National etc etc.

    What I thought was curious was the consistent refusal to debate the question where the burden of proof is in claims that a carbon free energy program should be blocked. I have provided the logic of the argument that the burden of proof lays with the obstructionists.

    Is that telling? I don’t know. Maybe they refuse to debate the point because they fear it might be right- That the dire consequences of climate change means that we need to err on the side of proceeding with any project that makes a plausible case for reducing carbon emissions, and that if the proponents are wrong the worst case is that we have some suboptimally performing generation. The worst case if the skeptics are wrong is that we did one less thing that would help avert a 5 degree change in global temperature.

    Because if THAT happens- we are all stuffed.

    That is worth a national conversation. People talk not far too much about it, but far far too little. It as if not talking about it will not make the problem go away, but it will make their life less stressful.

    Maybe we need to think a little less about our sturm and drang and think a little more of the of the massive climate change storms and stresses that our grandchildren and great grandchildren will suffer due to the carbon emissions increases we have seen under both National and Labour governments.

    But at one level you are dead right. In confronting those entities, the time for talk is over. The time for getting those obstructionists voted out of office is here.

    They refuse to debate it- all they do is continue baseless accusations that the program is a subsidy, that it harms other green efforts or that it does not make economic sense. Is it shocking that National will make precisely those arguments? Do we let them get away with how they shift the burden of proof to the Greens? Skepticism of large government programs is strong, and so if we do not attack the core of this line of attack, they will continue to persuade the persuadable with this meme, and thereby win elections.

    THAT- is why I am interested in this thread. Really, I don’t think that any of the participants are nasty people or that I am in this to “win” an argument with them. We shall all be losers if we do not get more Greens in Parliament and we shift the power balance in favour of policy makers who implement projects such as this one.

    But I do not wish to harm the blog. Most visitors will simply ignore subjects that do not interest them. Around about the 40 comments mark someone in another thread remarked how boring this one was. We are now at 245 comments. But if I am mistaken and there is harm to continuing the thread, please state the harm.

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  238. BJ – Part of the problem here is that there are so few other threads for discussing some of these specific issues. And another part is starting this discussion by announcing the policy, rather than having the discussion to find the best policy and then announcing that. And part of the problem is that some ideas which appear good at first glance simply do not stand up, such as using lead-acid batteries for peak smoothing.

    Trevor

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  239. John – regarding your example Auckland home that uses all its solar power output (post 12 March 5:59am). Sure the solar panel will save them money. But how typical is this home? Are there 30,000 homes like it? I think not.

    To use the full output of their 3kW panel during the day, their power consumption would need to be well over 30 units (10 hours of 3kW) a day – 9000 units a month, costing them around $2,500 month. Even if this is only during summer months, it is a lot higher than most homes.

    But what could they be running? You suggest air conditioning. A 6kW heat pump draws under 2kW, so you are looking at a cooling load of 6-10kW, all day. What are they trying to do – give a polar bear a sun tan? If not, they might get a better saving through installing an awning. More likely they work from home and have an impressive computer set-up, drawing much of that power summer or winter for more than 9 hours a day. (They wouldn’t shut down the computers during lunch break, etc.) I can think of one person who would fit that description easily, but 30,000? I don’t think so.

    The more typical home owner will only be drawing under 1kW during the day except for shorter periods when they are running specific appliances – kettles, vacuum cleaners, ovens, etc. Their afternoon air conditioning load might boost this up but less so in spring and autumn even though the panels can still be generating full output then. I would be surprised if they use more than 50% of their own generation.

    Trevor.

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  240. There is no need to assume that the self consumer participants all need 3kw systems. Maybe they only need 1kw for $3300. The profit ratio will not entirely be the same but it will be close.

    The program is relevant for owners other than than places like auckland, Nelson, Hawkes bay and Northland. In Wellington, a person with that load profile and a 3kw system would make $11,976 over the 30 year lifetime (includes degradation). Even in Christchurch, with only 3350 kwhr per year, they would make $10,584.

    As you well know, smart energy users can make adjustments to leverage the advantages of self consumption- with devices like refrigerators, ice air conditioners, pool pumps, hot water, washing and other non time dependent tasks running when the panels are generating lots of juice.

    I agree that nearly everyone should look at simple conservation strategies first, but regardless- everyone needs some electricity. With self consumption participants in mind, a 1Kw system will likely be sensible for many more people than a 3kw system.

    Make a convincing argument there are not 30,000 of those Kiwis in the broad regions where such systems would be economical. I live in Christchurch- not exactly the sunniest spot in NZ, but with self consumption this system easily pays for itself.

    It’s a no brainer.

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  241. The 1kW $3300 system will probably pay for itself. But will a 1kW system cost $3300? A significant part of the cost is wiring and consent fees, and you can probably add the call-out fees of the installers and electrician. These do not scale with size. I expect the 1kW system will actually cost $4000-$5000, so it is less likely to pay for itself but probably not a bad risk.

    What I have been suggesting all along is that the bigger systems are more likely to be cost-effective, for use in schools, rest homes, hospitals, and similar places. Here the fact that many of the costs don’t scale is an advantage, as is their higher day-time power demand. In addition, 3-phase inverters can be used which are less stressful on their capacitors, so the maintenance costs are likely to be lower. I see no reason why the Solar Homes scheme shouldn’t include these installations.

    Trevor.

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  242. On what empirical evidence to you base these guesses about actual installation costs of a 1kw system? Can you point to actual costs in NZ from actual installers? Do OZ prices across the ditch back you up?

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  243. John – if I has hard empirical evidence, they wouldn’t be guesses now, would they? I ask a question, which you have not answered. I gave reasons why the cost might be higher than $3300 which you have not challenged, so I guess the only part that is unanswered is how much higher than $3300 the 1kW system will be.

    Trevor.

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  244. Shhh Kerry. I was having some fun.

    Trevor- The only thing relevant to your argument is whether a lower power system- say the typical lowest- a 1.5kw system- would actually not make money for the Auckland home.

    Are you making that assertion or not? If so, are you only going to base it on innuendo and guesses, or are you going to prove it with data from verifiable sources?

    Careful Trevor. Playing the game of the cynic comes at a cost. Put up or shut up.

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  245. Well ok.. Let’s skip ahead. Instead of making 98% of the invested amount in savings, the Auckland homeowner with a system with half the power would make 65% of the invested amount in savings.[note1] They are ahead by $5300 in savings. Would people make that decision simply because they have some psychological need to feel green? Hardly. It’s money in the bank.

    Innuendo will not save your shredded argument, Trevor. It lays in flaming ruins.

    [note1]: To be fair, all Trevor said is that the system would be less likely to pay for itself. A National MP or proxy would be a lot more rude in the application of the innuendo that such smaller systems make no sense because they are too small to achieve economies. It isn’t so.

    I don’t know which site Kerry used, but there are plenty NZ sites that give data on costings. They are far higher than those in OZ. The average installed cost of a 3kw system in Sydney with subsidy removed is NZD $7350, not $10K as is the common estimate for NZ markets in which there are currently few installers competing. The low cost 1.5kw system is AUD$1.70 per watt, or $2.40 without RET, so final cost for a system in a competitive market will be around $3829 NZD. (<a href = "http://www.solarchoice.net.au/blog/solar-power-system-prices-sydney-nsw&quot; source). Nonetheless, if the obstructionists have their way, only the intrepid will press forward to save the planet and save themselves a heap of money even at $6000 installed price for a 1.5kw system. (source)

    So- using the NREL data for a 1.5kw system in auckland, the system will generate 1866 kw pa, so 55965 kw over 30 years. If the price of electricity does not go up, then that would cost this more modest auckland homeowner $14,551 at 26 cents per kwh. They had to borrow $6000 plus the cost of borrowing- roughly $2100. So accounting for degradation of the performance of the panels, you actually don’t generate all that power, so we subtract away 7.5 percent of the total power output, which is $1091. This leaves us with a savings of $5307 on an investment of $8100.

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  246. John – I did a few more calculations. With the 4.1% interest rate (wait – was that before or after the Reserve Bank increased the official cash rate) on a $6000 loan, the solar panels save $485 per year and over half ($245) pays interest. It takes 17.5 years to pay off the loan (not including the degradation of the panels). And this assumes all the power from the panels is used on site. In order to make this look good, you had to assume a 30 year panel life, no insurance costs and no maintenance costs, and just 0.5% degradation per year.

    With payback periods this long, the calculations become very sensitive to small details. For example, if 20% of the power generated by these 1.5kW panels needs to be sold at 12 cents rather than saving 26 cents, then the savings fall just over $52 per year causing the payback period to balloon to 21 years (again assuming no degradation and no maintenance costs). This gives them 9 years of income at 433 per year totalling $3897 before we take off $1091 for degradation (at just 0.5% per year) leaving $2806. So the profit on the $6000 was 47% or just over 1.5% per year. And that assumes nothing detrimental occurs during those 30 years.

    Not exactly overwhelming.

    Trevor.

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  247. It makes the owner money and saves the planet even if you assume that the friendly electricity companies who are building massive gas turbine plants decide out of their generous hearts not to raise rates, and we assume Solar panels and installation costs don’t come down as they have everywhere else,

    It is a mistake to pose as wise by using cynicism. All the cynic can say is no. What the world needs is enough people with the courage to say yes.

    There are enough, and that is why we will deconstruct the carbon economy, piece by bloody piece. It can start here. If you can’t bring yourself to say yes, stop saying no and get out of the way.

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  248. John, by your definition I am not a cynic. I am saying a lot more than just “no”. I have pointed out a number of better alternatives while you have retreated to a point where you are trying to justify systems that cost $6000 and generate an average output of just 213 Watts at a cost of $28 per Watt, and that generate most of their energy in summer when our lakes are high and much less in winter when our lakes are lowest. You rant against the gas turbine plants but because solar PV has zero output at the times of peak demand (winter evenings), it does NOTHING to reduce the need for those gas turbine plants.

    If you want to sell this scheme as a training scheme for electricians and roofers, then label it as such. If you want to hold off launching this scheme until the cost of the PV systems falls further and the durability improves, then fine. If you want to redirect it to larger institutions which can gain economies of scale to reduce the installation and maintenance costs and to avoid having to sell back the electricity generated cheaply, then I would reluctantly support the scheme. But right now the numbers for what is being offered just don’t make it a good proposition and I would rather see those 4.1% interest loans being offered to power and lines companies to install new renewable generation or to home owners for insulation and efficiency improvements, both of which would reduce our emissions faster and more cheaply.

    Remember that most of the power companies have consented renewable generation projects ready to proceed once the economic conditions are favourable. Offering them 4.1% loans may be enough to get some of those projects going and generate a lot more than 14MW (average) of emission free power within 3 years.

    Trevor.

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  249. Well, it’s pretty cheeky to suggest it is a retreat while you are attempting to leave your shredded economic argument behind you and change the subject. Although you were loath to mention what the dollar figure of savings would be after the panels are paid off, I can help you out there. Even with the small system you trivialize, the homeowner still saves $5000. Is that a small number? Well no, nor is the #13K of savings for the 3kw Auckland system, so what do you have left to do? You try to make it seem that it is unreasonable to expect that parts of your home will last what to you seems like a long time. The expensive part of these panels are basically rocks, and like the bricks in your home they will last virtually indefinitely unless you are in the habit of neglecting your home maintenance. Sure- houses burn down and trees can fall on them. But 50 years from now, most brick homes are still standing and 50 years from now, large numbers of these monocrystaline panels will be working too. That $6000 system you try to make fun of will be happily generating $363 per year in 2014 dollars. Will people decide they would rather not have the $363 each year and junk them? Of course not. Will they decide they couldn’t be bothered to re-caulk if they notice while cleaning the gutters that one has some condensation inside? Of course not. So remind me what are you complaining about?

    It’s no fair complaining that the bloody things last forever. Be happy I just calculated 30 years of savings. If you want to claim that 10% of the panels won’t last that long, go right ahead. But it is also fair for me to point to good portion of the remainder that will last until 50, because by that time that “uneconomical” small system will have saved that family $12,756. This is nothing compared to what medium scale one will have saved- $30K in 2014 dollars. Are those small?

    Those numbers will easily crush whatever percentage of panels you want to claim won’t make it to 30. So this complaint about 30 year periods does not even withstand casual scrutiny. Even if you want to claim that half remaining won’t make it to 50, it is still fair average those gains into those who didn’t make 30. So on average it is more than fair to expect profits for this type of solar user employing a 30 year term.

    So with little ammo left, all you can do is suggest that not many people will be able to do what Auckland homeowners can. But the surprising fact is that the Auckland solar power available that we have been talking about is also available to well over half of the North Island. Don’t believe me? Look at the solar map. The light brown region is represented by the Auckland number we have been using. The other half of the North island gets what Wellington (light green) does. So what are their profits? $11K for the 3kw system, and $3619 for the 1.5kw system.

    That makes it an economical proposition for the 3.1 million on the north island that can manage to not put in more capacity than they actually use during the day. You suggest that there aren’t 30,000 in the entire country who could manage that. Nice try, but your argument that there isn’t enough people to draw on who might use all the power they generate simply defies logic. But go ahead and claim you are not digging your hole deeper. Frankly, the more you do, the more we can flesh out the kind of arguments National might present.(note1)

    Cast all the doubt you want, but the program can deliver significant savings to some Kiwi Homeowners, and for many of those people, they would rather take those savings to the bank than take it on faith that the electric company won’t raise their rates in the next 30 years. It is as you say, a low risk bet.

    Now, is the south island out of luck? Hardly. Half of it is either brown or light green, so of our 1 million on the mainland, kiwis living in those regions will see numbers similar to those for auckland or Wellington.

    If you’d like to go through the minutiae of the auckland or Wellington numbers I’d be more than happy to.

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  250. I hit enter before putting in the footnotes. Looks like only one.

    [note1] Actually- you missed a pretty glaring weakness a few notes back that I am sure some National MP will make a big deal out of. You were looking right at it too. Hint- the rubber hits the road in the footnotes of policy documents.

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  251. Do tell what I missed? I don’t know what foot notes you mean. I also discovered an error – a decimal point slipped in one of my calculations.

    However you misunderstood why I think few homes will meet your criteria. While I agree that many homes will consume more than 30 units (i.e. 30kWH) during the 10 hours or so of daylight during which the panels can generate, I doubt that many homes will consume 3kW continuously during daylight. A lot of the home power consumption is intermittent, such as vacuum cleaners, kettles, microwave ovens, hair dryers, irons and even air conditioning systems. There just isn’t very much continuous power usage in a single home during the day. Lights, computers, routers and modems, clocks, radios, alarm systems, etc all draw power continuously, just not that much of it, and not many people need a lot of lights on during the day. I can imagine a number of homes managing to average 1.2kW of use of their own generation using a 1.5kW system, but 3kW all day – no way. There will be some homes that can, but not 30,000 of them.

    You suggested that the home owners could set up their appliances to use power when it was available. This is not a trivial exercise. If they overshoot they end up paying more than they would using night rate power. It could be (partially) automated, but at what extra cost?

    Your whole argument hinges on the home owner saving power at 26 cents per unit rather than selling power at 12 cents because the system doesn’t make money at 12 cents per unit.

    Trevor.

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  252. Before you change the subject with a non response,

    1) Do you concede that the 30 year period is fair or not?

    2) Do you concede that .5% for monocrystaline panels is a fair degradation rate?

    3) Do you concede the specified payout amounts for the Auckland and Wellington cases at 3kw and 1.5kw systems are within the range of what this type of participant would receive?

    4) Do you concede that the radiant energy required for these returns is available to nearly the entirety of the North Island, and about half the South Island?

    I will be happy to discuss how plentiful the home load profiles are. But since we are in the wonkish phase of the discussion let’s be a little more methodical and not depart a subject before identifying where we agree and disagree and why. You have left the structure of my last note unchallenged, but this does not mean you agree with any of the elements or that you don’t have any substantive argument challenging any of these elements.

    If those points are now common ground, let’s move on. Naturally, I am not asking for agreement with high precision- just that the point is in the correct range. Also, on any such points of fact, any such agreement is reversible by you, and there is no penalty for later withdrawing your agreement on any of these points should you later discover a reason why any one or all are fallacious.

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  253. OK, I will give it a go.

    Point 1 – I don’t know. I see that there is a 12 year warranty in http://www.q-cells.com/uploads/tx_abdownloads/files/Hanwha_Q_CELLS_Data_sheet_QPRO-G3_250-270_2013-09_Rev03_AU_01.pdf and given that these panels have not been operating for 30 years, any such expectation is only a projection. You describe the panels as rocks, but in reality they are very thin slices.

    Point 2 – the same reference gives 0.6% degradation per year after the first year.

    Point 3 – if you mean $0.26 per unit of electricity saved and $0.12 per unit of electricity sold, then I can accept those figures for now.

    Point 4 – 14% capacity factor should be achievable in the upper North Island and a bit less further south, but also a greater summer/winter difference further south. I don’t have time now to work out the Christchurch capacity factor.

    Now my question – what is that home running that they can draw 3kW all day?

    I don’t see any response from you about the maintenance of the system. The panels may last 30 years but will the inverter. Those capacitors do carry rather a high current:
    http://en.wikipedia.org/wiki/Solar_inverter

    Have you redone your calculations with a 4.35% interest rate now that the Reserve Bank has increased the Official Cash Rate 0.25% adding $15 per year to the interest charges on the $6000 system and $25 per year on the $10,000 system?

    Trevor.

    PS; What footnote are you going on about? Please give us a date and time.

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  254. 1) If you don’t know either way then you have no basis for casting doubt. I am not going to play the cynic’s game. Prove that they cannot last 30 years. But be careful. I might have a lot of real world examples that they do. BTW- Thin rocks are still rocks. Unless you are presuming that PV manufacturers use alchemy.

    2) My source was observed performance from multiple countries. You provided a manufacturer’s specification sheet, which as you probably know is purposely conservative due to legal liability considerations. Can you point to observed performance for monocrystaline or inexpensive polycrystaline that back up your pessimistic number of 1% degradation? If no, then you must concede.

    3) OK. Common ground with your reservation noted.

    4) That’s also good enough common ground for now. There is triple the population up away from the mainland, and that is where all the fossil fuel plants are that we should be killing instead of building more of.

    Your question: What is that home running that they can draw 3kW all day?

    Your question indicates a lack of interest in actual data of the power generation profiles for theses systems. If you bothered to use PVWatts, you will see that you can download a spreadsheet with the calculated generation by hour with every day of the year indicated. This is factual material- driven from actual weather station collected data from auckland international airport. You will see that the peak output of a 3kw system will be around 2200 watts, not 3kw. The 1.5kw system peak is half that- at 1100 watts.

    So give me a fricking break. One large room heat pump in a home business like a day care center will eat nearly all of that on such hot days. It’s hardly unusual that other activities would consume another 500 watts at that time of day.

    So do you really want to stick with your cynical conjecture their aren’t 30K of these homes on the north island alone?

    If you want to abandon your assertion then we can safely conclude there are significant numbers of candidates for this program who would do it not out of psychological need to feel green, but simply because it will save them money.

    I am perfectly happy to keep hammering on these details before we depart this portion of the discussion and move on to the next cynical conjecture waiting in line at the guillotine: the fallacious proposition that solar cannot possibly displace of fossil fuel generation.

    —-
    Postscript regarding the meta level of the conversation:
    By the way, by my definition, there are no cynics because everyone says yes- at least to breathing. We are multimodal creatures and fall into different voices on a daily basis. I attack the mode of the cynic- to pose as wise, and force the other side to prove that their cynical conjectures are wrong. It is lazy and effective stance. They can make the other person do all the work, and they have the option of pouncing on any error, thus proving their opponent is naive and unwise. It is precisely the tack that National uses with the Greens. I assume that is not your political orientation but it is a dialog role you commonly employ, so I am using you as a proxy to try out ways of undermining it.

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  255. John, you do your credibility significant harm by suggesting that a solar array 1/3rd the size costs 1/3rd the price of a 3KW array. Or are you just teasing for the opportunity for further zealotry?

    A 1KW panel would cost homeowners money. Do the calculations John. Real calculations, not those back of the envelope ones that you contrive to make your point.

    I see 1.3KW panels for sale on Trademe at $6000 installed. A national carpet company selling 1.56KW systems for $6990 installed with 0% interest cost. These systems have a negative NPV and long capital payback periods. A 1kw grid-connected system will be even more costly.

    If reducing the effect of carbon emissions were your real objective, then do some research around the benefits of a Green policy that pays to replace household incandescent light bulbs with LEDs. There are other ways that the Greens-in-government could spend $300 million to save the planet.

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  256. John, you do your credibility significant harm by suggesting that a solar array 1/3rd the size costs 1/3rd the price of a 3KW array. Or are you just teasing for the opportunity for further zealotry?

    A 1KW panel would cost homeowners money. Do the calculations John. Real calculations, not those back of the envelope ones that you contrive to make your point.

    I see 1.3KW panels for sale on Trademe at $6000 installed. A national carpet company selling 1.56KW systems for $6990 installed with 0% interest cost. These systems have a negative NPV and long capital payback periods. A 1kw grid-connected system will be even more costly on a per KW basis.

    If reducing the effect of carbon emissions were your real objective, then do some research around the benefits of a Green policy that pays to replace household incandescent light bulbs with LEDs. There are other ways that the Greens-in-government could spend $300 million to save the planet.

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  257. RJ: “suggesting that a solar array 1/3rd the size costs 1/3rd the price of a 3KW array.”

    What does it do to your credibility by demonstrating your ignorance of the citations I made, or the actual figures I am using ($10K for a 3kw system, and $6000 for a 1.5kw system? )

    In point of fact, there actually are vendors in OZ whose scale is linear. I pointed that one out above: AU$1.70 with RET, and $2.40 without. Once we get some decent competition, the vendors who give quotes of $6000 will get laughed at.

    I have pointed to my sources and detailed the calculations. You proceed to make general case calculations without any reference to credible sources to back up your claims.

    If you want to object, feel free to skip back up the thread and attempt to demonstrate your superior calculation skills. Search for $13,333. Actually this particular addition used your calculation of interest based on general cases. A closer calculation figuring for degradation and monthly interest payments puts the profit at $13,744.

    Take your best shot.

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  258. I did not recall OZ price correctly. It was lower- AU$1.43/watt either for a 1.5kw fully installed system or a 3kw system. $1.40 for a 4kw system, $1.37 for a 5kw system. The article mentions the RET subsidy per watt in Sydney is $0.70 per watt, so do the addition and conversion to NZD. So the best installation price for a 1.5kw system in Sydney without subsidy is $3399 at today’s forex, with the average price being $4628. The link to those figures got mangled. I tried to fix it but got timed out on the edit. It’s pretty easy to trim it to the correct url, but you can Click here for it.

    Anyway, even at $6000, there is no sense paying the electric company for power when you can pay off the solar loan after which you get free electricity. For people that don’t put in a system bigger than what they can use, it saves the kind of money I stated, and those figures hold for nearly everywhere on the North Island.

    Of course if the premise of a calculation is that owners are going to waste money, it is perhaps not unsurprising that the conclusion will be that such owners will waste their money. With qualified staff assisting owners, there is no reason to assume this eventuality will commonly occur.

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  259. John – since the panels have not been around 30 years, I cannot prove that they wouldn’t last 30 years and you cannot prove that they would. Asking me to prove my case when you can’t prove yours either is unhelpful.

    Also you said “There is no need to assume that the self consumer participants all need 3kw systems. Maybe they only need 1kw for $3300.” (March 22 1:40pm.)

    Yet when rural johnny pulled you up on this: “John, you do your credibility significant harm by suggesting that a solar array 1/3rd the size costs 1/3rd the price of a 3KW array.”

    you try to weasel out of the corner you painted yourself into by claiming:
    “What does it do to your credibility by demonstrating your ignorance of the citations I made, or the actual figures I am using ($10K for a 3kw system, and $6000 for a 1.5kw system? )” (March 24 10:42am).
    You jump around from one proposal to another (like a rabid dog?). We can’t keep up, but we did catch you out.

    Trevor.

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  260. One of my objections to the Solar Homes proposal is that the economics are poor for smaller systems, but given time this is likely to improve as solar panel prices continue to fall. I have argued that larger systems have better economics and would suit schools, hospitals and rest homes.

    I see in the Solar Homes policy paper https://www.greens.org.nz/sites/default/files/green_party_solar_homes_policy_paper_160214.pdf
    that the Green Party wants to extend the Solar Homes scheme to “social housing, community groups, and marae, as well as government departments, schools, commercial properties, and farms.”

    In other words, I think that the order that this scheme is being implemented is wrong, but the Green Party agrees with me that the larger institutions should be targeted.

    John – in his eagerness to prove me wrong – has overlooked this point of agreement.

    Trevor.

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  261. “Since the panels have not been around 30 years, I cannot prove that they wouldn’t last 30 years.”

    And now for the facts. PV panels have been around for more than 30 years. Modern Solar cells that were made 60 years ago are still working today. Unfamiliarity with their longevity is no reason to discard them or to even suggest they have shelf lifes on the order of automobiles or cell phones. We are familiar with the longevity of anvils and do not discard them after 100 years of use. Besides the technical facts about the stability of solid state devices there is a second argument. Industry uses 30 year life spans to verify that they will be profitable if they only last that long. So Trevor, the burden of proof is on you to show why it is unreasonable to use the same figure. Go ahead. Make your case. Simply saying “You don’t know” does not give any basis for making the negative claim that they won’t last that long. If you don’t have any basis for knowing one way or the other, all you are engaging in is FUD- a tactic of deceit.

    RJ stated he wanted something more than back of the envelope $3300 type numbers, and I have, and backed them up with citations. So what is your point? RJ claims that no one can make money on these Solar Homes installations- a point even you disagree with. So stop defending his sloppy calculations. He is perfectly capable of making his argument. Maybe he will look at the calculation and find something wrong with it. If he does, then I will be the first to thank him. We are interested in accuracy, not peeing distance measurements.

    I will insert your “objection” about Green proposals to extend the solar homes in the line of bogus arguments awaiting the guillotine.

    Let’s step back an look at what you and RJ are claiming. With this proposal, Kiwi consumers will have the choice of paying the entirety of their electricity bill as they always have. Or they can take part of the money they pay for electricity- get the same amount of electricity but have something that will generate free electricity after a period of time.

    You and RJ are trying to con people into believing that is a bad proposition.

    But enough of the tactics of distraction. We are methodically going through your claims on the economics.

    1) 30 year calculation. You have been shown to have provided no proof for why 30 years is an unreasonable life to assume for these solid state devices. I have made the case in the affirmative.

    2) Home peak power utilization while solar panels are at their peak. You asked, “What is that home running that they can draw 3kW all day?” My answer was that I rejected the premise as misinformed. The max generation of panels in the Auckland case would be 2200 watts not 3000 watts. In the case of a 1.5kw system the figure is 1100 watts. Do you want to engage in the innuendo that consuming this much power on a hot summer day is rare?

    So give me a fricking break. One large room heat pump in a home business like a day care center will eat nearly all of that on such hot days. It’s hardly unusual that other activities would consume another 500 watts at that time of day.

    So do you really want to stick with your cynical conjecture their aren’t 30K of these homes on the north island alone?

    Well? If you do, please provide your rationale backed up with verifiable facts. I have. Download the hourly spreadsheet for auckland for a 1.5kw system. If they will use at least 1100 watts during the hottest time of the day then they will have a profit of $4995. Sure- there are 90 hours out of the entire year when the panels generated a little more than 1100 watts. But over the 30 year period, how much does that wastage degrade their profits? About $19 (2.508 kw times 30 times .26). We are talking any huge degradation if they only use 999 watts max during those hottest hours: They will make only $189 less profit.

    So your cynicism that there are very few people with this kind of home usage has no basis in fact.

    Plenty of Kiwis can install a 1.5kw system and consume all they generate. If you continue to disagree, please provide some factual basis for your argument.

    If we are on common ground on this point, then all we have to clear up is the question on 30 year period used. Once you do that, we will be on common ground that the non subsidized program can be justified solely as an economical choice for the participants.

    At that point we can move to your assertions that it cannot displace any of our fossil fuel generation. Feel free to modify that assertion while it is waiting around in line for the guillotine.

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  262. Actually, it’s not total wastage, unless you think the electric companies can get away with paying zero for the electricity. If EA decided the fair and reasonable payment for use of lines to send the electricity to the neighbor’s house is $.14 per kwh (!), then the owner will get at least 12 cents per kwh “wasted”. So the 1.5kw system owner who could only manage to use 999 watts during these peak hours would lose only about $99 of their $5000 in profits. The other that maxed out at 1100 exactly would lose about $9. To get significant degradations in payout, the home usage has to max out at far below the 1000 watt mark. You don’t have to believe my assertions- examine the spreadsheet and perform the calcs yourself. These daily numbers are actual radiance figures from AKLs weather station and a highly accurate model of PV performance.

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  263. Frog – your web site just lost my last half an hour typing because I wasn’t logged in but the last view showed that I was logged in. This is not the first time this has happened and it is #$%^&^ frustrating. If it is going to do that, at least it could give us the opportunity to log in and then post our work rather than throwing it all away. Even if it only showed our comment so we could copy it for later pasting would help.

    Trevor.

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  264. John – I do reject your argument that most home owners can use the full output of a “3kW” system even if this is only 2200W. The panel output is lower when it is hot so it can generate more power on cooler sunny periods such as spring and autumn days. And of course about half of the power is generated before noon when temperatures are lower rather than after noon when temperatures normally peak. So that big air conditioning system that you expect to use most of the power won’t always be running when the solar panel is generating near full power. So what do you expect will use that 2200W? Remember that your economic argument is seriously weakened if only 60-80% of the output is used on site and the remainder sold at 12 cents per unit.

    And don’t go on about the “1.5kW” system – at nearly 50% more per Watt of output, it is already a poor investment.

    Trevor.

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  265. I am aware that there are solar panels that have been running for 30 years. However these panels have not been around that long. They are cheaper than the 30 year old panels. Why is that? One of the reasons is that they are thinner, which may make them more vulnerable. Another is that they are more efficient. For example, they include anti-reflection coatings which by their nature are very thin (e.g. a fraction of a wavelength of light) and vulnerable to being simply worn off with time. The efficiency of the cells themselves may be better but this may make them more vulnerable to degradation when the panel is exposed to high temperatures for tens of thousands of hours. (They are not just rocks.) There are a lot of unknowns and the expected lifetime is just a projection by the manufacturer, who may not be in business any more after 20 plus years.

    You cannot prove that these panels will last 30 years any more than I can disprove it, not that I am trying to disprove it.

    Trevor.

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  266. “Modern Solar cells that were made 60 years ago are still working today.”

    Please cite a reference. I would be interested in knowing what a Modern Solar Cell manufactured in 1954 is like.

    Trevor.

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  267. *30 year calculation. I have shown that it is common practice to use 30 years for levelized cost of solar panels. All you have done is express reasons that currently manufactured panels might not last as long as previously manufactured panels. You have not shown that agencies such as the EIA are wrong to use 30 year periods. The majority of PV panel manufacturers warrant them for 25 years. So what do you think? They explode in the 26th year? Even disregarding the fact that you have presented no documented assault on the technical argument, the burden of proof is on you to show why the authoritative source (the eia) is wrong to use 30 years.
    *Modern solar cells- 60 years- This was the UK’s first “modern” technology solar cell Daily Mail The technology has been around since the 1890s. Although Becquerel invented a PV cell in 1839, the first solid state PV had to wait for Fritts to invent it in 1883. Researchers at Bell Labs invented the first silicon cell in 1954.
    *Self consumption “I do reject your argument that most home owners can use the full output of a “3kW” system even if this is only 2200W.” Straw man. I never made the argument that most owners could use all the power from a 3kw. I didn’t even make the argument that most owners could use all the power from a 1.5kw. You asserted that such self usage was so rare that there would not be 30K people who could profit from this program solely on economic grounds. If you continue to hold this position, please present a logical argument based on verifiable facts. To date you have not done so. Otherwise, let’s agree that 30K specified for this project is not unlikely and move on. We can quibble later about how much more of the North Island’s 3.1 million people can achieve similar self consumption rates.
    **”The panel output is lower when it is hot” Just a minute. Think about what you just said. You are calling into question the power output on those days. Did you even bother to look at the NREL site? Do you actually think they don’t know how to do proper solar output calculations? Panels are hot, less voltage. Well Duh. What are you saying? That NREL is incompetent? You really want to make that assertion?
    **”Don’t go on about the 1.5kw system. at nearly 50% more per Watt of output, it is already a poor investment.” How do you know? We haven’t done the analysis yet. This money can be used two ways. 1) I can “invest” the money by giving it to the electricity company. After 13 or 17 years, I my “investment” is guaranteed not to yield an asset. 2) I can use the same money to essentially rent to own a solar system. With the same money, I have an asset that generates free power after 13 or 17 years. After 30 years, I will have either $5000 extra dollars or $17,444. So it is irrelevant that the owner of the 1.5kw system does not have the same rate of return as the owner of the 3kw system. But you want to disqualify purchase of the common 1.5kw systems because you think $5000 is not good enough?

    Let me give you some tips on advanced numerical analysis laddie. $5000 profit is greater than $0 profit, which is what the alternative “investment” will generate. So I can sympathize but I’m sorry, I know you don’t like the blade of the 1.5kw system economics slicing through the neck of your argument, but you are not entitled to disqualify it simply by proclaiming that you have already pre-ordained what the proper conclusion of this financial analysis is.

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  268. “Do you want to engage in the innuendo that consuming this much power on a hot summer day is rare?”

    The point that you keep trying to dodge is that the solar panels generate more when it isn’t a hot day, such as on a sunny spring or autumn day. They also generate near full output during the morning of a day that is going to become a hot sunny day but hasn’t got there yet. In both cases air conditioners may be unnecessary or just ticking over (if inverter types). Either way, most homes do not need all the power generated by the solar panel continuously, even at just 1100W. You are trying to argue that homes that do need this much power continuously are not rare, which presumably means that they are common, yet you have no credible argument for this. You may have evidence that there are 30,000 homes that do, but will these be the same 30,000 that apply for and are accepted into the Solar Homes scheme?

    Now which of these facts do you consider unverifiable? Do I need to prove that solar panels generate in spring and autumn? Do I need to prove that solar panels generate power before noon? Do I need to prove that air conditioners need less power for cooling on cooler days? Do I need to prove that an air conditioner that isn’t heating or cooling isn’t drawing 1100W? What else doesn’t commonsense tell you?

    Instead of trying to provide evidence yourself, you just try to discredit me. You are trying to say that I don’t accept the NREL figures. How about reading the rest of the sentence you quoted? If you did, you will see why I said what I said, and nothing I said implies that the NREL figures were wrong.

    This solar panel has a 10 year product warranty:
    http://www.nzsolar.co.nz/photovoltaic-power.php
    And this inverter has a 5 year warranty:
    http://enasolar.net/products
    So far I am not seeing those 25 year warranties you mention. However you must admit that the home owner is taking a risk if the payback period of their investment is longer than the warranty.

    And there are plenty of alternative investments that will earn more than $5000 in less than 30 years. Fitting out a house with LED bulbs may be one of them, particularly if you have to run air conditioning to keep the house cool too.

    Trevor.

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  269. Saving the planet from massive climate change is a worthy goal we both seem to care so much about that we relentlessly put in effort to figure out what is real and what is false. We owe the planet that much. What matters is whether this is a worthy project or not. Given the impact to the globe, it is worth going into great detail on such projects that have the goal of impacting climate change. I feel no personal need to discredit you, and regardless how colourful I get with my rhetoric, this isn’t personal. Part of that is theatre. Actually you seem to be an amiable enough chap. I hardly blame you if you cannot say the same of me. In the context of this analysis, either your arguments stand or they don’t. Simply because you have made a string of fallacious arguments is not necessarily predictive. As humans we share this trait. In the history of science, we historically have always gotten things wrong. But by logic and data, we come to common ground understandings of what is true, what is unproven, and what is false. Some individuals take it exceptionally personally, and that is not necessarily bad because science without passion moves exceptionally slowly. But it helps to have a thick skin because I found that in my field that there was an abundance very sharp, highly educated individuals with unusually sharp elbows.

    1) Is it proper to bar 1.5kw systems from analysis? In the next to last note, you made the surprising claim that 1.5kw systems were disqualified from consideration prior to analysis of the details of their economics. I showed why you were not entitled to make this disqualification. In the above note, you appear to concede the point because you use the figure of 1100 watts, which is the output of a 1.5kw system. Is it common ground that it is legitimate to consider the 1.5kw case? If not, we should not depart this point.
    2) 30 year period Either the 30 year period is legitimate or it isn’t. I have provided both a technical and a normative argument in favor with cited authoritative support for these arguments. It is a critical question and your note is unresponsive. Are we on common ground that the 30 year period is legitimate? If not, why not.
    3) ”Investment” is a false comparison I heard no response. Do you agree it is a false comparison or not. If you don’t agree, please respond to the argument.
    4) Self consumption The proposition that 30K homes is “not rare” in no way implies that 30K homes need be common, or reflective of “most” kiwi homes. If you are curious why the structure of your argument is fallacious, try to diagram the logic. Or experimentally, plug in other instances of facts which can easily said to be not “not rare” and see if they always imply “common”. In any case, the question whether it is “most” or “common” is irrelevant. We have a specific quantity: 30K homes- and that is satisfied alone by merely considering home businesses. We have not yet gotten into high energy use homes, and homes with trivial load shifting through use of timers on hot water and refrigeration. So I have made a more than sufficient prima facie case there are enough candidate homes for owners who want to make 5000 dollars on a 1.5kw systems. Others will be content for it to break even. If it is true that there are enough self consumers alone, then the assertions of the opponents fall apart: Those being those of the “economic” class- that the project will require a subsidy or the more rudely condescending: that we should do this only for “feel good” or “job training” reasons.

    You asserted that such self usage was so rare that there would not be 30K people who could profit from this program solely on economic grounds. If you continue to hold this position, please present a logical argument based on verifiable facts. To date you have not done so.

    Including your previous response, we are still left to ask, where is your logical argument based on facts? Have you provided any statistics showing that the highest decile of home electricity users do not have a load profile that would be able to consume 1100 watts on the hours that the 1.5kw system is at peak? No. Have you shown that a small business load profile like the scenarios case of a day care center does not fit the supply profile? No. Have you shown there are not enough home businesses in NZ to account for 30K such candidates? No. Nor are you willing to provide any other sort of argument based on quantifiable evidence that would lead us to conclude there cannot be 30,000 such households.

    There is an obligation of those wishing to obstruct projects designed to lower carbon emissions to prove that they should not be undertaken. The reason why is that the consequences if the obstructionists are wrong are dire. I have made this proof several time to you yet all you have stated is that you feel no such burden of proof. It is irrelevant what you feel. It is relevant whether you are obligated due to the dire consequences to support your case with logic and facts or not.

    This graph shows a mismatched system for a “typical home” in australia. For a candidate to make $5K in profits, they would have to bring that graph into balance so that the top of the yellow peak goes no higher than the blue consumption line. Typical homes in OZ are consuming a low of 500 watts during the day. Trevor, you are claiming there aren’t 30K homes anywhere in NZ with double that 500 watts of minimum consumption necessary for the solar panels to generate the stated profit.

    If you retract your opposition on these points, we are on common ground that the project will pay for itself without subsidies and can be justified solely as an economical proposition for home owners wishing to save on electricity bills.

    We may then proceed to the fossil fuel displacement question.

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  270. We may then proceed to the fossil fuel displacement question.

    Waiting patiently…

    Solar irradiance at Chez Buckley right now: 872W/SqM. Power consumption: 860W. Music: Rolling Sones, The Spider and the Fly.

    Either the 30 year period is legitimate or it isn’t.

    This is obvioulsy a really important question, and the “legitimacy” depends on what is the effective system lifetime. And to answer this reasonably, then a definition of “lifetime” is required. A bit like “lifetime guarantees” that feature so often on Fair Go.

    Read some stuff from the journals yesterday on life experience of solar panels in telecomms plants in Australia; they have thousands of remote sites solar powered, and thus have lots of real experience in this matter. Their experience is quite variable. Manufacturer and installation quality are two important variables I noted in reading.

    With a typical grid-tied system, the panels are in series, and the panels are each expected to have very similar characteristics. If one panel fails or its performance drops below the rest then it will compromise the output of the whole array, and fitting a replacement (which by then will be n years of progress better) will result in a mismatched (and hence, sub-optimal) array.

    In telecoms, they generally don’t run bunches of panels is series to get a high voltage low current source; they run in parallel to do the opposite, so a panel that fails does not compromise the entire array, and can be replaced individually. Thus the experience of the telecomms industry doesn’t directly map.

    Beyond the life question of the panels, the life of the inverter is at least as important; the inverter is the single most expensive item in a typical solar installation, and experience and opinion on expected lifetime is, again, variable. Eclareon reckon 15 years, which seems not unreasonable for a cost-engineered piece of power electronics. So a system at 30 years old may have panels that are working in excess of 70% of their nameplate rating, but the inverter is about to die – again.

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  271. 30 years? Warranties common for that period I am seeing on AU sites that it is common to offer 30 year manufacturer performance warranties that they will perform at least at 80%. Obviously if something delaminated due to heat or whatever Trevor is imagining on a fancy multicrystaline, then the performance will be zero% so they are obligated to replace. The objection about some of these companies not being in business long doesn’t make sense to me because the obvious response is to go with some major brand like Sharp or Mitsubishi. Mitsubishi has been around since 1870 and survived two wars, major bombing campaigns and nuclear attack. The warranty is going to be honored in 29 years if one of them dies.

    I am an engineering type guy so I would look at how the particular thing was manufactured and would personally not buy anything using materials that touch the cells that are potentially unstable over this kind of time span. Solder is pretty stable, so are a lot of other things. Any reputable company offering 30 year performance warranty is going to have engineers that know their stuff and likely made darn sure there would be few failures during the warranted period. But I’d still look at it.

    Inverter replacement costs If this is a grid connect inverter with no battery charging, you spend maybe $250 if it blows up the day after the 10 year warranty goes out. If we were talking battery charging- yeah- it looks like you will be north of $1K if you buy through normal channels. So I don’t get what the big deal is here. The cost is not huge and in any case by that time they most probably will be cheaper and more reliable. But say they are still $250 and even if I am on the third one by 30 years, I have still have $4000 more in my pocket than I would have. Maybe I have missed something, but I don’t see that this is a huge impact on the economics.

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  272. John said “I am an engineering type guy …”. This would explain why he has missed the difference between a performance warranty and a product warranty. The solar panel manufacturers are offering 10 or 12 year product warranties, so they will replace the panel if it fails in this time. After that, if it fails dead, you are out of luck. The performance warranty is typically 25 years. Not having read the warranty itself, I don’t know what they will do if the output is less than claimed – probably pay you the difference proportionally. Of course all warranties only pay out if a claim is made, so the owner needs to know that the system is not working properly and then submit a claim. Given significant hour to hour fluctuations, this does require some careful observations or good record keeping to realise that one or a pair of panels are no longer generating out of a system that may have 10-12 panels.

    Ooh look – here is a solar inverter:
    https://www.ecoinnovation.co.nz/p-604-enasolar-30-kw-grid-tied-inverter.aspx
    3kW grid-tied, just what is needed for the 3kW Solar Homes system. Bit more expensive to replace than $250 though – that price is $3,000 excluding GST. The 1.5kW unit is just $1900 excl GST. If you had to replace that twice, there wouldn’t be much left of your $4000.

    I still haven’t seen an inverter with a 10 year warranty though – they have all been 5 year, but I haven’t been looking at the 3-phase inverters.

    Trevor.

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  273. John said (on 18 March 4:24pm):
    ‘”If the policy objective is to reduce greenhouse gas emissions, then its a PR stunt, because that is a gamble.” This does have an assertion, though a generic one. You are saying that there is something unspecified about Solar homes that does not guarantee that that it will reduce greenhouse gases. The reason why it is generic is that any other scheme that reduces demand of electricity from the grid cannot also not guarantee that it will reduce greenhouse gases. It can be applied to any green policy. There is no guarantee that insulating homes will reduce greenhouse gases. Sure, the electricity demand might go down, but it is a gamble to say that the electricity reduced is not hydro and is coal or gas.’

    Actually there is something about solar panels that does not guarantee that fossil fuel generation will be reduced. Solar panels do not generate at our times of peak demand (winter evenings), thus we require other generation at this time – currently fossil fueled. During winter, the entire 90MW of the Solar Homes scheme might generate an average of just 7MW, which won’t do much to keep the lakes full. Therefore the fossil fueled generators will be kept operational, and if they are available to generate our power, the electricity generators will use them rather than building other renewables.

    It is easy to see why better insulation, more efficient heating or energy saver light bulbs would reduce our fossil fueled generation as they DO reduce our peak electricity demand. Hydro and geothermal can be used to meet our peak demand so they will also reduce our need for fossil fueled generation. Wind is not quite so simple as it may not generate at our times of peak demand. But wind will generate in winter – a lot more than solar does, and will help keep the lakes full allowing base load fossil fueled generation to be reduced.

    Trevor.

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  274. Trevor, I have been attempting to persuade you of the superiority of relying on logic and fact rather than the tactics of innuendo and deceit. Your first note opened with what is known as an ad hominem attack. I was polite about the attempted sleight of hand you attempted with your “not rare” = “common” arguing from false summary construction. It was pure sophistry. Both of these are fallacious and tools of deception. If you use them, don’t be too awfully surprised if people conclude you are attempting to deceive them. If they are generous with you they might not think ill of your motives- just that you are unable to escape your own self deception. I don’t know which and as I said it doesn’t matter. What matters are the arguments.

    Let’s proceed methodically through the propositions. You are unresponsive on the elements of the economic argument, so let’s resolve them first. I do note your eagerness to change the subject to your fallacious assertion that there will be no displacement of fossil fuel use. You have recorded another iteration of it, but it will simply have to wait in line for the chopping block. No need to lose your head early due to impatience.
    1) 30 year period Excellent progress is being made. You have admitted that 25 year performance warranties are common. So what is pertinent at this point is to understand what they say. Let’s examine your claims on this score:
    “Not having read the warranty itself, I don’t know what they will do if the output is less than claimed – probably pay you the difference proportionally.” “The solar panel manufacturers are offering 10 or 12 year product warranties, so they will replace the panel if it fails in this time. After that, if it fails dead, you are out of luck. ”

    Logic and facts. Where is the logic where are the facts? No facts: You make a claim but don’t bother to look it up to confirm. No Logic: you suggest that the possible satisfaction terms- proportional payout will not be satisfactory without providing any logical argument showing why this is so. You are attempting to educate us on law, yet you do not refer to the text of the agreement? Come now. The way law works is you start with the text of the agreement. At random I picked the Mitsubishi warranty. Here is what it says:

    if, within twenty-five (25) years after the first sale to the original end-user customer, any Photovoltaic Module exhibits a power output less than the percentage indicated in the following chart of the minimum Pmax at Standard Test Conditions as specified on the manufacturer’s Product Information Label affixed to each Photovoltaic Module, provided that such loss in power is determined by MEUS (at its sole and absolute discretion) to be due to defects in material or workmanship, MEUS will, at its sole option, either [1] provide the Customer with sufficient additional Photovoltaic Modules to compensate for such loss in power; [2] repair or replace the defective Photovoltaic Modules; or [3] refund a prorated portion of the Purchase Price at an annual depreciation rate of four percent (4)% of the Purchase Price.

    So is the owner out of luck after 10 years? No. But you Trevor don’t know that because you couldn’t be bothered to read any actual warranties. “any Photovoltaic Module exhibits a power output less…” Any means any.
    Now why on earth would an engineer need to understand what the implications of this legal language is? Hmmm. Maybe managing engineering enterprises does require knowledge of law and a few other things. But feel free to instruct us on how Mitsubishi’s warranty doesn’t say what it actually says.

    Now to the innuendo that proportional compensation is unsatisfactory. Say on year 25 if the panel has become delaminated, the seal broke, or whatever- if it not generating power due to the manufacturer then it gets repaired, replaced or paid out. You suggested the payout would not be sufficient. So what would it be? Unless I am mistaken about how they compound the 4%, the refund for a $500 panel generating 260 watts will be around $190. So either one of two things happen. The manufacturer looks at their cost of manufacturing the same panel in 2039? Given the price performance trajectory, Mitsubishi knows they will never have to pay anywhere near $190. The first commercial PV came at a cost around $1800 per watt and were huge. 25 years from now, a 260 watt panel will be a fraction of the size and cost of current panels, so Mitsubishi will most likely opt to replace. But say they cash out. Do you really think you won’t be able to buy a panel with greater power in 2039 for $190?

    So far from being a disadvantage, early failure and proportional payout would most likely benefit the home owner since it would result in a greater power system.

    But say that is none of that is the case. Trevor- you yourself admitted that panel was paid off in 17.5 years. The $190 is free money.

    So by your own admission, 25 year performance warranties are common. The legal agreement shows that the manufacturer will stand by their product for that period, and their calculations on life of the product are necessarily conservative. So what option does that leave you Trevor? Are you going to now engage in innuendo that 30 year warranties don’t exist? Are you going to claim the warranty doesn’t say what it says? Are you going to suggest Mitsubishi will go out of business? Your move, but my advice to you is that when you find yourself in a hole, stop digging.

    Man up and admit the 30 year period is reasonable. If not, show why not. Next time provide logic and facts, not ad hominem, speculation devoid of factual reference and sloppy innuendo.

    (2) Inverters. What have you shown? That you know how to use the internet to look up the price on a single inverter? That consumers can pay huge amounts for inverters? I concede both points, but you have not shown why your fact has any pertinence. Why should we consider this inverter as representative, or that lower cost inverters be disqualified? We have no way of knowing because you don’t say. When you started talking about inverters a week ago, I did a price scan for low cost approved grid tie inverters. I didn’t see much heat there but who knows, maybe on closer inspection we will see there is an under appreciated issue there. So how did you respond? Did you claim that approved Grid-tie Inverters in this price range do not now exist? No. Did you claim that inverters with 10 year warranties do not exist? No. We learn the interesting though irrelevant information that you yourself have not seen such warranties. So what.

    Your response was contentless. Try again. On one hand you want to assert that the cost of replacing inverters will significantly impact profitability but decline to show why this is the case. Well, sorry, but without logic and facts why should we be convinced? Maybe you are correct, maybe not. But give us some reason to believe you.

    You have no response on t