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ACT sharpens attack on Greens' solar panel scheme

"Russell Norman’s inability to understand that a concessional interest rate is a subsidy is bewildering," ACT leader Jamie Whyte says, sharpening his attack on the Greens; controversial scheme to get solar panels installed on 30,000 homes within three years.
The scheme would allow people to borrow up to $15,000 at low interest to cover an install, with the debt being attached to the property, not the person who borrowed the money, and paid back through council rates.
Interest rates should reflect the risk of the borrowers not of taxpayers. One of the purposes of interest rates is to communicate information about risk, the ACT leader says.
"In the Greens' scheme they disguise the actual risk of the borrower. Then they propose to use the expensive machinery of the Local Government (Rating) Act 2002 which will involve Councils in recovering debts that they had nothing to do with loaning in the first place."
It’s bad policy to use the Local Government Rating Act to do debt collections for central Government, Mr Whyte says.
"It would be more honest just to subsidise the photovoltaic (PV) panels directly. But then it would be more clearly an election bribe."
For most homeowners the Greens' PV panel scheme will be bad economics, Mr Whyte says.
He points out that in November 2013 Consumer Magazine reported: “The economics of grid-tied PV don’t stack up – particularly when you include the lack of significant environmental benefits. Our calculations show that most grid-tied PV systems have negative net present value (NPV), which means you’re better off putting your money in the bank.”
"The Greens' PV is also unnecessary. A few consumers are already doing this when it economically stacks up for them and without government assistance," Mr Whyte says.
"What’s more, at least one lines company, Vector, is running its own Sungenie pilot scheme where it provides the panels and equipment at its cost."

Comments and questions

Most are still missing out on the fact of how disingenuous Russell Norman was with his announcement. Ignoring interest rates & using todays pricing of electricity he states that by borrowing from the government & installing solar you will save about $2 per week. What he failed to mention is if they get into power their decision to cripple other investment in NZ by lowering electricity prices thru the nationalization of purchasing, the so called saving will evaporate and it will become a more costly to have solar, as you will be stuck with the debt. Furthermore his idea is that the debt belongs to the house, so when you sell you are selling the debt, is just ludicrous, you are now lumbering the purchaser with debt you incurred?? And this is the man people want on the treasury bench’s?. Russell go get real a job and find out what its like to work for a living instead of sucking on the public t**.

This hot humid weather must be getting to you

By linking the loan to the house is actually a good idea - firstly it secures the loan alongside the bank - ie technically a first mortgage

When the current owner sells they either repay the debt owed or the sale price is reflected in the cost to repay the debt or carry on the loan. So the purchaser is not lumbered with the debt unless they choose to - ie they have a choice to repay the debt after reducing the purchase price of the house by the amount of the debt or reducing the purchase price and continuing the loan therefore getting the house at a discount - if they went this way they would just price the loan costs as their energy cost.

When you take the politics out of this it's actually a smart idea. probably something we expected from John Key when we first voted him in for his intellect and leadership - sadly we are still waiting for signs of legacy policy from him. He remains popular but will not be remembered for generations to come for any legacy policy.

Act and the Nats are envious they didn't think of this first....or maybe they did and the Greens got the jump on them.

"November 2013 Consumer Magazine reported: “The economics of grid-tied PV don’t stack up – particularly when you include the lack of significant environmental benefits."

Lets just reflect on this sentence for a while.

... reflected, now what?

Lets see. An independent agency states that the numbers dont stack up, which would be find for the Greens if there was some environment benefit but again, the independent agency stated there are no significant environment benefits.

So a double fail on the part of the Greens.

Having said that, the Solar in Schools set up in part by the Greens guy for Nelson may be a good as they are matching peak production with peak demand.

Putting this debt on a house is no different than a new car or holiday- but makes much better economic sense. At least solar panels have a return of investment and decrease dependency on thermal generation during long dry periods- exactly when solar panels work best.

There was great resistence to do away with the horse and embrace the automobile. Similar foresight is needed now.

Thermal generation is most important in dry winters . You know, when the days are shortest and the sun is at a lower angle in the sky, and PV doesn't work so well...

Pumped (hydro) storage is the way forward for non-baseload generation, but the Greens and the greenies will kill that, just like they did to Mokihinui hydro, Hays windfarm, Project Aqua etc. And if Lab-Greens win the election, there'll be no new generation investment anyway.

Norman is such an economics lightweight serious people don't bother arguing against his hare-brained schemes.

What is really worrying is how much Norman is re-quoted and taken unquestioningly at face value by the air-heads who inhabit the bodies of journalists these days.

I have just read the Greens proposal and there is a subsidy involved in the feed in tariff. They state:

"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."

Any price above the wholesale rate, that is the rate that other power companies sell their electricity for, is a subsidy.

I have to admit that i sometimes like the Greens, so may be a little biased.
Greens are trying to make a good gesture to real politics, but just miss out on the commercials.
What they should have said is that with the onvent of lower cost solar energy products, it would like to take wholesale advantage of this and agree with selective new zealand suppliers to launch a nationwide initiative to get homeowners to invest in a greener and energy efficiant future that will benifit new zealanders over the next 5 years and genrations to come. The investment in this technology is not new, but only recent cost benifits are only emerging that will allow us to apply the positive impact of this technological reality.

Good name, Confused. You have certainly confused me. Onvent? Do you mean advent?

Who said solar energy is lower cost? It's not, and the scheme is incredibly inefficient. The last thing I would want is a debt over my head (joke), higher rates, property harder to sell etc.

'next 5 years and generations to come' Hullo? Just a load of feel good waffle with no facts or sense.

Care to guess the cost of a KW of power 10 years from now?

Yes. Unless Labour/Green's take power, much the same as it is now.

New Zealand has huge reserves of coal that can be used to generate power at much the same cost as we are paying now. As we now know, man-made carbon dioxide does not cause dangerous global warming – if it did, 60% of the US would not be covered by snow and the dry winter promised by the UK met office computers would actually have happened.

The only thing that will push up the price of power is crazy renewable energy policies that are the most expensive way of reducing man-made carbon dioxide. The cheapest ways of doing it are nuclear power and large hydro, which the Greens resolutely oppose.

People should be asking how much of their funding comes directly or indirectly from renewable energy companies that rely on government policies and subsidies? Not long ago, the Green party was said to have had shares in wind turbine manufacturers and wind farms. They tanked.

If that is the case then these systems would be widely in use now without any need for subsidies or incentive schemes, other than promotions from the providers, yet they are rarely seen anywhere. Guess why?

And when interest rates rise by 1% you are underwater.

I'm all for renewable energy. But has anyone worked out the discounted payback period for the typical homeowner? Say based on a loan of $12,500?

The discounted payback period would be infinite because the electricity it generates is more expensive than you can buy electricity from the grid.

If the shortfall is covered by direct or hidden subsidies, then, by definition, it is uneconomic.

In the end, the the hidden subsidies needed by scheme must put up the price of power to everyone so that it finishes up ripping off the poor to subsidise those which enough to afford solar cells. Labour and the Greens need to be asked why they are supporting such a disgraceful policy.