Solar Energy - A Saviour for our increasing Oil Import Bill?

I keep wondering why the electricity officials do not allow us to start using solar panels in our homes to supplement or even fully supply our home/office energy needs.

In recent years, our import bill has risen with one of the biggest components being oil imports.

Recent governments have tried to provide incentives for businesses that operate in the area of alternative energy production, however, not much effort has been done to fully encourage businesses to enter or operate in the area.

Local research into alternative fuels, including solar energy, is relatively non-existent with not much emphasis given by education planners to encourage anyone or firm to conduct research in the area.

Yet, we keep hearing of the local electricity supplier, the Fiji Electricity Authority, continuing to increase electrical energy costs by increasing fuel surcharges. We keep hearing as well of the Monasavu Hydro not sufficient to supply our country's energy needs.

It is time that we develop critical thinking to encourage research, planning and development of alternative energy sources of supply in Fiji. One free form of energy, solar energy, is something we could start with.

Read below an article taken from Forbes.com on Denmark's experience with making itself fuel independent.


"The Answer To The Energy Problem" by William Pentland

Before John McCain and Barack Obama say another word about America's energy future, maybe they should go to Denmark.

Denmark has done what other countries only dream of doing: achieved energy independence. While Europe's overall energy imports rose 2.4% in 2006, Denmark's energy imports fell to -8%. In fact, the European Union as a whole scores 54% on the scale of energy dependency. Denmark scores -37%.

"Denmark is the model that the United States should be following," said Steve Pullins, executive director of the U.S. Department of Energy's Modern Grid Initiative.

How'd they do it? Distributed energy.

Unlike traditional "centralized" systems, distributed energy relies on small power-generating technologies like solar panels or ultra-efficient natural-gas turbines built near the point of energy consumption to supplement or displace grid-distributed electricity.

Consumers can not only draw power from the grid, but can feed power into it as well. For instance, homes equipped with solar-power panels could feed unused electricity back into the grid, adding to the total available supply.

Other related technologies like demand response, consumer-side controls and energy storage are expected to play an equally important role in distributed-energy networks. The key feature of a distributed system is so-called "smart metering," which allows power to flow in both directions.

It's far more efficient than most national electricity grids, which rely on large central power stations to send electricity exclusively in one direction from the power stations to the final customer. Only a third of the fuel energy burnt in power plants ends up as electricity. Roughly half is lost as heat and nearly 10% more is lost during transmission.

In addition, 20% of generating capacity exists purely to meet peak demand, so it operates only 5% of the time and provides a mere 1% of supply. The grid has growing congestion problems because it channels electricity through a few key nodes. The glut exacerbates the inefficiency by forcing the utilities to rely on dirtier and less efficient sources of power to meet peak demand rather than simply redirecting surplus power from low demand to high-demand markets.

In 2005, Denmark's distributed-energy networks generated nearly half the country's electricity while cutting carbon emissions by nearly half from 1990 levels. In July, Denmark announced plans to deploy the world's most extensive smart-grid infrastructure, which could make distributed energy the country's primary source of electricity before long.

The change has taken Denmark nearly two decades to implement, but the most critical step was the introduction of smart- or net-metering, which required utilities to buy back electricity from consumers at 85% of the price. Denmark's success has convinced a growing number of policymakers and energy executives to follow suit.

In the U.S., the movement faces constraints from a familiar place: power companies. Distributed energy aims to decouple profits and consumption so that power companies have a greater incentive to invest in energy-efficiency technologies that drive distributed-energy networks. Changing that relationship is even more critical than technological innovation.

"Very little can happen without having the utilities involved in the process," said Ron Pernick, a founder of clean-technology consulting firm Clean Edge. "Regulators need to give utilities the tools they need to get involved, which basically means decoupling."

Like most businesses, power companies have a duty to shareholders to make investments that yield a reasonable return in a reasonable time frame. Distributed-energy systems are developed piecemeal over a long period of time and often require investments that take a long time to yield meaningful returns.

In many parts of the country, regulators have relied on various tax rebates and credits to make it possible for power companies to invest in low-yielding technologies without destroying their bottom lines.

At the Federal level, the 2005 Energy Act requires all federal buildings to be equipped with two-way metering and energy-management systems by 2012. But at least so far, the results have been mixed.

Power companies in Western U.S. states have begun listing energy-efficiency as a central part of their long-term resource portfolio strategies. In the state of Washington, PG&E (nyse: PCG - news - people ) plans to meet half its future energy needs by investing in energy-efficiency technologies that enhance distributed-energy systems.

Other power companies are pursuing ambitious plans to ratchet up decentralized generating sources. Southern California Edison (amex: SCE.PR.B - news - people ) plans to install a whopping 250-megawatts worth of solar panels on rooftops in southern California by 2013.

Meanwhile, many companies and consumers have taken the initiative themselves. In the past decade, the number of small businesses and consumers substantially reducing their reliance on grid-based electricity has risen over 33% annually.

In Mountain View, Calif., Google (nasdaq: GOOG - news - people ) meets 30% of its peak power needs with electricity generated by the 1.6 megawatt solar panel installation on its campus. There are compelling reasons to suspect other Silicon Valley companies will follow suit.

Blackouts are expensive, especially for Silicon Valley's high-tech companies. A blackout would cost Sun Microsystems (nasdaq: JAVA - news - people ) an estimated $1 million each minute, according to Larry Owens of Silicon Valley Power. Hewlett-Packard (nyse: HPQ - news - people ) has estimated a 20-minute power outage at a circuit-fabrication plant would cost $30 million.

But it isn't just high-tech firms in the computer capitol of the world that are taking advantage.
Last year, the U.S Army Corps of Engineers installed more than 1,000 solar-powered street lights in Fallujah, a predominantly Sunni city in central Iraq that was the scene of a brutal battle between insurgents and U.S. soldiers in 2004.

During the day, the lamps store energy from the intense desert sunlight in batteries large enough to keep them lit from dusk to dawn. Now, the streets are lit every night--in a country which, in the last five years, has probably spent more hours without electricity than with it."

Higher prices for gas guzzlers

As I suggested earlier on this blog, http://investinfiji.blogspot.com/, one of the ways that Government could control the high foreign exchange payments spent on importing oil is to charge a higher price for gas guzzlers such as four wheel drives.

Read here a similar proposal being considered now in the UK.

A short term measure : Can we look at containing imports

Much has been said about the need to increase exports to help improve Fiji's trade balance position. However, we all know that getting into exports takes a while to set up with time spent on establishing a business, meeting all FTIB and Government-set requirements, setting up your product and getting it ready for exports, looking for markets and contacts, checking out the shipping and airline routes, availability and costs and then having your first consignment ready for exports.

Why don't we look at the import side and try to improve/reduce that side of the trade account? There are a lot of things that can be done to reduce imports.

My suggestions here relate to trying to reduce the import of fuel oils which formed 51% of the total imports in 2006. (Refer to Bureau of Statistics data here.) Some actions that can be done include :

• looking for and encouraging the use of alternative energy in place of fuel and diesel oils and petrol;
• residential property owners should be encouraged to complement their energy needs with solar energy derived from solar panels. The purchase of these solar panels should have a tax rebate or be tax free to encourage their use;
• large vehicles (usually called gas guzzlers) such as four-wheel drives should have a prohibitive gas guzzler tax to discourage their purchase and ownership. They should also attract an environment tax given that they emit a higher proportion of gases and carbon which damage the atmosphere and ozone layer;
• all properties (business or residential) should have an energy audit with a view to encouraging efficiency in use of energy;
• energy saver fixtures and light fittings should be sold tax free to encourage their use widely in business and residential properties;
• tax concessions should be given to businesses that will engage in the research of alternative fuels and energy;
• controlling the number of vehicles on the roads with a limit on vehicles licensed each year;
• stopping the import of second hand vehicles from overseas which have more fuel consumption for the same mileage as other new vehicles;
• the set up of alternative energy structures (e.g. windmills) by the Fiji Electricity Authority be speeded up.

I suggest also that Government and the authorities have a good review of all imports and weed out or impose a higher tax on those that are considered unnecessary e.g. fruits and vegetables that can be sourced locally.