In the age of cheap solar PV, does electricity conservation still matter?

Solar PV is an amazing technology. It has low emissions compared with other electricity generation method. Also, it is decentralised and thus can easily be retrofitted.

Today, it is possible to buy a good-quality 10 kW solar PV system from about $7500. Such a system, installed on mainland Australia, will produce an average of up to 20 kWh/day in winter, and close to 60 kWh/day in summer. Given how cheap that system is, and how much electricity it will produce, should we still need to be concerned with reducing energy use?

I think the answer is yes, for the following reasons:

1. For most residential solar PV installations in Australia, self-consumed power is black (not green) power

When you buy a solar PV system in Australia, the cost of the installation is offset by STCs. An STC represents 1 MWh of renewable electricity from a small-scale generator (eg. a domestic rooftop solar PV array). A new solar PV system creates a number of STCs equivalent to the renewable electricity it will generate over its expected lifetime. To make a solar PV system cheaper, people usually sell its STCs.

To whom are the STCs sold? People buy STCs when they buy GreenPower or want to offset other polluting activities. By buying STCs, someone is buying GreenPower.

The consequence is: if you have sold your STCs, then your self-consumed solar PV power (power that you use direct from your panels, rather than the grid) is actually black power -- you have in effect sold the renewable power coming from your panels (the STCs), and are instead using power from the coal power station, even if the electrons have come from your panels and not the grid, you have sold their "greenness".

Thus, the idea that you are using clean power direct from your solar PV is not accurate.

If you think "maybe some people do this, but I didn't do it", you're probably wrong. Take a look at your quote or invoice for your solar PV installation (mine is below) -- the vast majority of people (more than 90%) sell their STCs. Below is the price summary from my original PV installation in 2013 -- the STC sale reduced the cost by 1/3 so any power I self-consume is effectively black power.

My 2013 solar quote including STC sale

It's still great to install solar PV, even if you sell the STCs. By doing so, you are investing in a distributed renewable grid in Australia. While we should not let the perfect be the enemy of the good, we should keep in mind the limitations of what we have achieved so far.

2. Australia still gets a fairly small proportion of its electricity from renewable sources

In the last year, Australia's NEM (National Electricity Market) was about 1/3 renewable. We have a long way to go (Fig. 1)

Figure 1: breakdown of NEM generation over the last year
https://opennem.org.au/energy/nem/?range=1y&interval=1w

However, although we have a long way to go, we are running out of time to get there. Some scientists think we have already run out of time to prevent some dangerous climate change. This article was written in 2018, and among other things says: 

we are only three years away [2021] from overshooting the 1.5℃ target 

...

While it may already be too late for Australia to make a fair contribution to keeping global warming at 1.5℃, our results show that we can stay within our share of the carbon budget for 2℃ – provided we have the political will to move fast.

...

But the overriding message is that time is of the essence, if we want to come anywhere close to limiting dangerous climate change. Our various scenarios suggest that even if we implement a rapid, effective response, we are likely to have to take CO₂ back out of the atmosphere in the future, to compensate for the likely overshoot on our share of the global carbon budget.

Note that there are no confirmed, scalable, affordable, methods for extracting CO₂ from the atmosphere, and many scientists do not consider the 2℃ limit to be safe, as outlined here.

3. Currently, the manufacture of renewable energy technologies releases CO₂ into the atmosphere, using our carbon budget.

While solar PV and wind power are our best (and perhaps only) bet for achieving a sustainable electricity  supply, their production does cause carbon emissions (though vastly less than continued use of coal and gas does). Given the highly constrained carbon budget we now have, even the relatively small contribution of wind turbines and solar PV manufacturing will likely become significant.

carbon footprint of various electricity generation methods. Solar is about 20x better than coal, but it still has an environmental impact. Also note that the environmental impact of solar is "front-loaded" meaning that the impact of its entire lifetime of generation is brought-forward. Regarding "coal with carbon capture" -- note that this has not been commercially viable anywhere in the world. https://cdn.factcheck.org/UploadedFiles/co2-emissions1.jpg

4. We cannot manufacture wind turbines and solar PV quickly enough to supply all current grid electricity in time to avert serious climate change

Some models suggest Australia's grid will be 50% renewable by 2025 and 69% by 2030, becoming fully renewable in the mid 2030s. Recall the 2019 model suggesting that our carbon budget may already be exhausted -- this suggests that our deployment of renewable electricity will not be rapid enough to remain within the safe levels of carbon.

Implications

So, are we stuffed? I think the answer is "not necessarily", because all these analyses miss the thing that is easiest to change -- demand.

Let's consider per-capita energy consumption around the world:

https://www.quora.com/How-is-the-consumption-of-electricity-a-reliable-indicator-to-track-the-economic-growth-of-a-country

If you examine this graph, you will see that Italians use about 1/2 the energy that Australians use. This suggests that we could halve our energy consumption without making significant changes to our society. The percentage of renewables in our grid would go from 1/3 to 2/3 in that process without having to install any additional capacity. Italy is a nice place -- Australians like to go there for a holiday because it's so nice. 

Let's consider look at Australia's historic consumption:

Australia per-capita electricity consumption (kWh per person)
https://www.indexmundi.com/facts/australia/indicator/EG.USE.ELEC.KH.PC

In 1960, Australians used 1/5 the electricity that we do today. 

I downloaded data on Australia's historic energy consumption and corrected it (fairly roughly) by population to create per-capita relative consumption for each year. To me it looks like per-capita energy consumption hasn't changed a lot. The data only start in 1974. (I couldn't easily find older data)

per-capita energy consumption in Australia, 1974-2020

However, in the 70s, many (most?) consumer items (eg. cars, building materials, clothing) were made in Australia, so the embodied energy of the things we bought is included in the figure. However, by 2020 that was no longer the case and our energy consumption is effectively much higher than shown because of our reliance on off-shore industry. Also note that our domestic energy consumption has remained fairly constant even while we've had huge efficiency dividends because of technological improvements.

To try to illustrate this, I accessed Australia-China trade data, looked at the RMB (Chinese currency) value of Australian imports from China, scaled them by the average energy intensity of the Chinese economy (approximately 200 RMB per kWh), scaled that by the carbon intensity of Chinese electricity (2 MWh per ton CO2 -- this is about 1/2 the intensity of coal power) and scaled that by Australia's population to create a Australian per-capita estimate of Chinese CO2 emissions that arise because of the manufacture of Australian-bought products (and are hence our responsibility). This is obviously prone to error, but gives an indication. Note that these data only started in 2012. 

per-capita energy consumption in Australia, including the Australian equivalent per-capita from Chinese manufacturing of Australia-bound goods. 1974-2020

I think it shows that our domestic per-capita coal and oil consumption has remained consistent, our domestic gas consumption has significantly increased, and our foreign coal consumption (embodied in goods we buy) has gone through the roof.

This graph looks somewhat unbelievable. To sanity-check it, I considered the size of the total Chinese economy to estimate the per-capita emissions on current data only:

This data are similar to what is shown in the graph above, but were arrived at differently, suggesting that the numbers are meaningful.

To be honest, these numbers are quite shocking and should give Australians pause for thought.

Conclusion

The easiest and best way to quickly get closer to our goal of being zero carbon is to use less electricity and buy fewer manufactured products. This is true whether you have solar PV installed or not -- installing solar PV does not absolve you of a responsibility to use less.

If you think that Climate change is a problem to take seriously, I challenge you to use less than 2.5 kWh of electricity per person per day (eg. 10 kWh/day for a family of four). You can party like it's 1965 right now!

The Beatles say: just flick that switch off, baby!

If you want to read more, here's a short essay I wrote in 2014 about the merits of the 1950s -- yes, there was good amongst the bad, and we would do well to learn from those who lived then.