Photo / Doug Sherring
Amid all the talk about the need to exploit renewable energy, very little is being done to encourage the cleanest and most potent new energy source of all - our homes.
Just why is it we rarely see solar electric panels on our roofs? It's odd. The cost of solar keeps plummeting, Australia is on to it, it's rapidly expanding overseas and we even export some of the technology.
The answer is that New Zealand is almost alone in the Western world by not having the legislation that makes home energy production feasible. Recently a powerful new group, Pure Advantage, was started by the likes of Sir Stephen Tindall, Rob Fyfe and Chris Liddell to frame the economic argument for a greener economy.
My hope is the emergence of organisations like this will help sway the Government to enact laws to unleash renewable investments. Specifically, a revolution in the power industry where the Government encourages us to produce electricity and sell it back to the grid.
However, the power industry is in no hurry for us to generate electricity. And successive governments have kept the status quo because, well, they own the power companies and get hundreds of millions in annual dividends.
The explanation is essentially "we already get most of our electricity from renewable energy, we don't need this".
But electricity is just part of the equation and, if you total all our energy consumed and include transportation, you find a staggering 70 per cent of our energy actually comes from burning fossil fuels. Incredibly, our proportion of fuel use is going up and, today, 36 per cent of all household income goes on energy and transportation costs. Residential electricity prices have almost doubled in 10 years and petrol is soaring.
The legislative solution to this problem is based on Feed in Tariff (FIT) agreements, which oblige power companies to buy our renewable power at agreed pricing and terms. With this investment model, wind, micro hydro and solar systems can net returns of 5 to 12 per cent.
Take solar electricity. Today, 50,000 New Zealand homes have solar hot water. If these homes were also sending electricity back to the grid, the results would be impressive. By day, the electricity for your office could be coming from the roofs of empty homes. By night, your electric vehicle could be solar charging for the next commute. We could have 500,000 homes powering the grid.
Now this may sound ambitious, but not only is it feasible, it is already happening all over the world. In Germany's poor sunlight, their energy capacity from solar panels is twice the energy capacity of all our various power plants.
Today, architects and builders integrate solar into designs where even the roofing tiles, walls and windows generate electricity. Centralised power transmission is hugely inefficient, but home energy production is the opposite as it flows to and from the grid.
Crucially, renewable power continues during disasters. Another elegant aspect of Feed in Tariff agreements is the ability to save half the system cost by not installing batteries.
Effectively, the power company becomes your battery. It pays you for the excess power that you generate, redistributes it as required and sells power back as you need it.
So how do these agreements work?
They set different rates for different energy sources, reflecting the operational and environmental costs of each.
As solar has no ongoing costs and produces 20 to 25 years of "free" energy, it is paid at a high rate. Fossil fuel gets a low rate. While FIT agreements are long term, the clever bit is that the rate paid for renewable energy reduces each year. This creates rapid investment in renewables as investors take advantage of high initial rates.
Countries fund incentives in many ways. It's cheap. Direct funding by consumers costs as little as $2 per month, per household. Or, we could eliminate another small power plant. Or, with the Government set to sell power assets, let this fund incentives.
Now you can almost smell the fuel on the breath of those who object to funding anything green. But we would gain an edge if more power came from our roofs and less was wasted burning fuel.
Today, selling electricity to our power companies is a tortuous process with unacceptable terms. But while power companies avoid changes that lower revenue, they do adapt. In parts of Australia, home owners with renewable energy systems are paid as much as $3 for every $1 of electricity they produce. In the US, it's up to $4 and in Germany, $8.
The employment potential is stunning. The German Government attributed FIT agreements with the creation of an additional 186,000 jobs. We already have a core group of renewable energy professionals and the potential for Kiwi-made solar panels is real.
We burn money on public debt and even more on burning fuel. Maybe we can help solve several problems at once. Introducing proper FIT legislation creates fair and transparent financial incentives for investment in renewable power. Let's move towards home energy production and a better economic future.
* Chris Keenan lectures on 3D visualisation and renewable energy in Unitec's architectural programme.But we would gain an edge
The new Ombudsman has been in his role for just 12 weeks.