The numbers must add up for farmers to consider investing in alternative energy sources, WAFarmers CEO Trevor Whittington says
In June, I attended the AgZero – WAFarmers Power Shift Forum, where we got the good oil on the exciting future that awaits us as we turn off coal and gas and turn on renewables.
The keynote speaker was New Zealand cherry farmer Mike Casey, who has made a global name for himself by taking his entire farming operation all-electric, leading the way in the race to save the planet before the world goes into irreversible meltdown.
As a climate advocate, he is putting his money where his mouth is, which is a refreshing change from all those who like to beat the climate drum but demand others pay for it, starting with the world’s energy-poor.
His enthusiasm was quite infectious in a room of people that were obviously pro-renewable, albeit the room seemed to instantly drop a few degrees when the word ‘nuclear’ was ever mentioned,
Obviously, saving the planet for that lot did not include going as far as splitting the atom is concened, despite the fact 60 nuclear power plants are currently under construction globally and another 110 are in the planning stage.
Clearly, there must be a lot of clueless economists in the 30 countries running, building, and planning nuclear power plants as we are constantly told that they are not a viable option for Australia.
Still, it got me thinking about the cost-benefit of taking our farms across to the green side of the electricity equation and cashing in on all this free sunlight we have.
Putting aside the obvious fact that without subsidies there would be virtually no wind or solar farms or rooftop solar anywhere in Australia, which puts to bed the great big lie that renewables are cheaper 24/7 than the old faithful coal operations down at Collie that puffs away keeping the lights on and the cold at bay on winter nights.
I have taken some time to delve into the cost benefit of lashing out on a solar battery unit and taking the farm partially or fully off-grid. To get to the real numbers, you have to dig deep and have some idea of your energy usage.
The fact that small businesses in Western Australia, particularly high-energy users like vineyards, dairies, and other intensive farming operations which run cool rooms and tractors small enough to be electric, are not rushing to follow Mike’s cherry farm example is the first sign that even at current power rates, farmers are doing the maths and the dollars don’t add up as Mike claims they do in NZ.
In his example, after rewiring solar and battery panels and moving to electrify 21 petrol and diesel engines, his operation now saves an average of $40,000 a year on operational costs through the electrification of its “fossil fuel machines”.
He quotes a payback period of 13 years, but there is no detail on the interest, tax, or depreciation impacts or government rebates, which is where an independent audit would help prove his case.
The first thing to note is that New Zealand offers government rebates at up to double what’s on offer in Australia.
Under the WA state government’s Distributed Energy Buyback Scheme for Synergy customers as of 1 July 2024, electricity exported back into the grid between 3 pm to 9 pm earns 10 cents per kilowatt-hour (kWh); but for the rest of the day this falls to 2 cents per kilowatt-hour (kWh) or 3 cents for those in the bush under Horizon Power.
These rebates are limited to a residential customer who consumes not more than 50MWh of electricity per annum with a generating capacity of no more than 5kW, which is not a big system.
On top of this, the federal government offers the Small Scale Renewable Energy Scheme, which offers rebates ranging in size, from $1,456 for a small 3.9kW system to $4,852 for a 13.2kW unit.
The larger 13kW unit would be what most Wheatbelt farms would look at, which is what’s recommended for a five-person household living in an older style, less energy-efficient home with someone home all the time.
On average, that sort of household would consume around 30kWh a day in winter and 60kWh in summer. As a comparison, a small system for two people working would be 5kW.
But like trying to develop a formula for what size tractor suits the average farm, it all depends on what sort of work you are doing and when.
In the case of solar battery systems – is the house smart-wired with LEDs, and five-star energy efficient appliances and do you mind tapping into the grid on hot days, or do you want to be fully off-grid but you have an energy-hungry old air conditioning unit and a big chest freezer?
Assuming you buy a 13kW unit, installed after the rebate, you would be up for $13,000 for the panels and inverter, which would produce around 50kW a day – plenty for winter but just short for a hot summer’s day.
Assuming you want to store energy for overcast days or to pump back into the system then you will be up for a separate battery system which will set you back another $13,000 for a Tesla Power Wall unit of 13.5kW.
All up, you are up for $26,000.
A outlay of $26,000 might not be enough to leave you with enough energy to run the farm workshop, plus the farmhouse and fill the new electric car and ute with enough electrons for a day’s work, plus a trip to Perth without tapping into Collie, so you will probably need to double the whole system unless you are happy to accepting coal-fired electrons on those cold winter nights.
Double that $52,000 to $104,000 and double it again to $208,000, and the South West farmers will have enough to run the orchard irrigation pumps and cool room on the berry farm or the dairy.
But now we are talking big dollars, and this may explain why very few intensive operations have filled the shed roofs with panels as the dollars quickly add up.
This is without mentioning the future cost of power which, despite the Prime Minister’s promise, is not coming down.
In fact, at the rate power prices have been climbing for the past 24 years at just on 10 per cent a year, as electricity prices have increased by 238 per cent since 2000.
As a result, all farms should be considering putting in systems, even more so if the Chinese keep subsidising their panel and battery manufacturing industry and prices keep coming down.
The alternative is to wait for Western Power to come along and install one of their $300,000 standalone solar battery diesel units, which is the plan for 9,000 farms across the South West network.
In the meantime, there is nothing holding you back from investing in a biodiesel plant to run the farm machinery.
But beware, if you thought a household solar battery unit was line ball, try doing the numbers on turning your canola into biodiesel.
There are no end of papers on the cost of small-scale biodiesel plants and the cost of production, but good luck getting it below $3 per litre, and don’t even think about putting it into your new diesel tractor as it voids the warranty.
What’s the takeaway? There is a reason few of the orchards, vineyards, or dairies in Australia have gone completely off-grid: the numbers just don’t add up.
If they did, every farming property across the South West would have panels hanging off every inch of the shed roofs.
If you are looking at a system, first get an advanced smart meter installed by Synergy for $101.30 then give the data to an energy storage consultant and spend $1,000 to design a fit-for-purpose system for you.
As they say, don’t believe the hype, you pay for what you get.