Solar farm burns money

Imagine putting $100 in the bank and getting back a guaranteed $83 a year for four years, and then $59 a year for the next decade — all taxed at a maximum rate of 30 per cent. Your 2.9 per cent high interest saver account, taxed at 39 per cent, isn’t looking so good.

Courtesy of Australian electricity users, and the stupidity of the commonwealth government, Saudi Arabia’s Abdul Latif Jameel Energy, which bought Spanish solar farm builder Fotowatio in early 2015, has indeed struck such stellar returns.

In 2014 the Australian Renewable Energy Agency proudly made a $101.7m grant to the Spanish company for a $164m solar farm about 10km out of Moree, comprising 250,000 solar panels. An enthusiastic Clean Energy Finance Corporation chipped in a $47m loan to help, leaving Fotowatio with only $15.3m to put towards the project itself.

With a capacity of just under 150,000 megawatt hours a year, the solar farm, up and running, will generate about $12.8m in revenue a year for the next few years, based on the current Large-scale Generation Certificates (LGC) price of $85.
Assuming that price falls to $60 on average between 2020 and 2030, the farm will provide a tidy $9m a year to the Saudi owners.

Before you get jealous though, rest assured the project will, AREA said, create about 100 jobs, and provide electricity for 15,000 homes.

This has been a fantastic outcome for our Spanish and Saudi foreign investors, but it’s far from clear it’s a good deal for anyone else. The 100 jobs that have supposedly arisen have come at a cost of almost $1.5m each, including the grant and the government loan.
And the 15,000 homes could have sourced their electricity from other, far cheaper sources. Too bad those cheaper sources are gradually shutting down.

For the massive sums Australians are forking out via their power bills and taxes to build solar and wind farms and provide juicy returns to foreign investors, we could have built multiple small nuclear reactors, which would, by the way, generate a lot more than 100 jobs each.

http://www.theaustralian.com.au/business/opinion/adam-creighton/solar-farm-burns...