Mr Fraser this week unveiled AGL's plans to proceed with two solar power plants costing $450 million for Broken Hill and Nyngan in western NSW. The 155-megawatt capacity will meet the power needs of about 50,000 homes, and be about 15 times bigger than Australia's largest plant.
In my view, the most cost-effective way to develop solar is with large-scale projects," Mr Fraser said. "You get the economies of scale.
Conventional wisdom supports Mr. Fraser's contention - data on the other hand tells a different story. $450 million for a 155 MW solar farm works out to $2.90 per watt. Solar Choice has the average unsubsidized price for 1.5 kW rooftop systems throughout Australia at $2796/kW. That price goes down to $2277/kW for 5 kW systems. It's rather remarkable that a 155 MW photoelectric solar farm that is 100,000 times larger than a modest 1.5 kW system would be more expensive on a unit price basis. To be fair I should point out that the solar farms are tracking plants so that accounts for part of the extra costs. That said, $2.90 per Watt is high even for a tracking plant.