Solar power 'more lucrative than BREE report claims'

The recent Bureau of Resources and Energy Economics (BREE) report raised a few eyebrows in the industry when it was published last month.

Highlighting solar power as Australia's cheapest electricity generating technology of the future, it was praised by clean energy advocates as a huge step forward for the government.

Professor Quentin Grafton, who worked on its publication, said at the time that the results showed Australia's energy future will be remarkably different to what it is now.

However, barely three weeks in and solar power commentators are already saying the report may be hedging on the side of caution by too much.

One of these experts is Giles Parkinson, editor of RenewEconomy.com.au, who said in an article for Energy Matters that the solar cost story "might be twice as good as the government thinks".

While Giles admitted the BREE survey was a "game changer", he highlighted that some real-world applications were not taken into account and common industry forecasts for solar power were equally ignored.

"The report notes some of the dramatic cost reductions in the price of modules in the last two years, but their capital cost estimates for 2016, for instance, assume only modest reductions in the price of modules in the coming five years, and a rise in the balance of systems costs," he explained.

For example, Giles - who is a veteran 30-year journalist - called the BREE's prediction that solar power will only get seven per cent cheaper over the entire 2020s "extraordinarily conservative".

According to him, the expected arrival of big semi-conductor firms into the industry, balance of systems costs and the expected efficiency gains in manufacturing are all going to have a significant effect during that time.

And it's not just that decade with faulty figures. He pointed to problematic data over the next ten years too.

"By 2020, BREE says the median point for non-tracking solar PV will be $133/MWh, more than double the Department of Energy's prediction," Giles said.

Despite these issues, he admitted there were a number of positives to take from the report - not least that the organisation has promised to update it every six months.

There is also going to be a wholesale review every two years.

However, Giles stated that it is important the figures in future amendments are correct, as the publication is going to be a major influence on government policies for upcoming renewable energy initiatives.

Posted by Mike Peacock

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