Expense of an electric car better investment than solar, says Smart Grid Forum

Friday 3rd June 2016

The extra expense of an electric vehicle roughly equates to the cost of installing roof-top solar electricity generation, making it a better investment for environmental outcomes, says John Hancock, the head of the Smart Grid Forum.

The forum, a future-casting electricity industry group established by the Ministry of Business, Innovation and Employment, has released a new report on how internet-enabled electricity management might shape the sector's future.

“While installing solar panels on your house may mean cheaper power bills, which may be great for the individual consumer, it isn’t really doing anything to reduce New Zealand’s carbon emissions," said Hancock, chairman of the Smart Grid Forum, "On the other hand, buying an EV instead of a diesel or petrol-powered car has a clear impact.

"EVs are still quite expensive, but the amount someone would normally spend on installing solar roughly covers the additional cost of an EV over a new petrol or diesel car," said Hancock. "From a national perspective, we’d reduce emissions more if people bought EVs rather than installing solar."

Rooftop solar PV typically cost around $10,000 to install, while the cost of a plug-in hybrid EV, such as the Mitsubishi Outlander, is around $12,000 more than the cost of a petrol or diesel model, he said.

The electric-only Nissan Leaf was selling new in New Zealand for around $35,000 before Nissan withdrew it from sale in this market late last year, compared to similarly outfitted petrol and diesel cars at between $20,000 and $30,000.

The conclusion is likely to dismay solar PV enthusiasts who tout the technology not only as a money-saving but a planet-saving move to reduce carbon emissions - a claim more meaningful in a country such as Australia where the vast majority of electricity is produced from fossil fuels, such as natural gas and coal.

With 80 percent-plus renewable electricity already from hydro, wind and geothermal resources, "solar PV uptake is unlikely to result in significantly better or worse outcomes (for national carbon emissions) than would be achieved otherwise," the says the report, which draws on a range of recent studies, including the Concept Consulting report that first drew attention to the greater climate change impact of EVs for New Zealand than solar PV earlier this year, provoking outrage in the fledgling solar PV sector.

"To achieve emission savings, solar PV would not only need to increase the penetration of renewable generation, but it would need to do so more than the renewable generation projects that it would likely displace," the report says. "While solar PV is not an ineffective option for reducing emissions, other technologies such as wind would be more effective.

"Given the likelihood that the alternative to solar PV uptake would be investment in some mix of grid-scale wind and geothermal generation, it does not appear that solar PV uptake would result in significantly better emission outcomes. However, it also does not appear that outcomes would be substantially worse."

The wider report says the development of smart grids, "using new technologies, IT and communications systems to increase consumer choice and the efficiency of the power system, have real potential to reduce carbon emissions around the world."

"However, opportunities for smart grids in New Zealand are very different to those in most other countries," it says, claiming "a common misconception that what works overseas will work here."

“For some countries, smart grids can open up new ways of generating renewable energy. New Zealand is different. Our main opportunity to reduce emissions with the help of smart grids is to leverage the existing renewable base to replace New Zealand’s current reliance on fossil fuels. Smart grids can contribute to shifting transport and, over the longer-term, coal or gas-fired industrial processes to greater use of electricity."

BusinessDesk.co.nz

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