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The age of free solar

 

The cost of solar PV has fallen so dramatically in the last few years that industry pundits have begun playing a new game – identify the spot where the price of PV finally hits a floor. But what if it never did?

That tantalising prospect was raised by the International Energy Agency in its Solar Energy Perspectives report released last week, when it said that building-integrated PV – a thin layer of PV-active material – will become almost a standard feature of building elements such as roof tiles, façade materials, glasses and windows, just as double-glazed windows have become standard in most countries. Because solar PV would be crucial to the value of such buildings, the IEA argues that the cost of PV could “almost vanish” in the very market segment where it currently costs the most. “PV roof costs may never meet a floor price,” it says in the report.

The idea that PV costs will “vanish” into the value of the building is potentially revolutionary for a technology that is supposedly hamstrung because of its high up front capital costs. Commercial building owners, however, are comfortable with the concept of “vanishing costs”, because it is a fundamental part of the “green building” push that has rewarded higher investment in energy efficiency and low emissions technology with greater yields. And now the concept been taken up by the Sustainable Energy Association of Australia, which argues that adding a standard 1.5kW rooftop solar system could actually reduce the size and the term of a home mortgage, and thereby “vanish” into the value of the home.

SEA chief executive Ray Wills says that the price of PV panels has fallen so far in the last two years that they offer a payback of 10-12 years without subsidies, and four to seven years if the remaining federal government incentives (a much reduced multiplier) are taken into account. But if the cost of a 1.5kW system (around $3000 after the current subsidy) was added onto a $100,000 mortgage, and the energy savings it produced applied to mortgage repayments, then the term of the mortgage could be reduced by as much as four years.