From one-time Greenpeace activist to a man on mission to transform New Zealand into a 100 percent solar country by 2020, Solar City chief executive Andrew Booth certainly likes a good challenge.
But the biggest challenge we’ll face, he believes, will be the consequences we’ll have to face if we don’t do away with the “failed” system of cap and trade.
What attracted you to solar?
We lived in Nelson and I couldn’t understand why solar wasn’t bigger. We saw other companies around the world that had solar as a big technology and I wondered what was going on in New Zealand. I met up with Simon Stockdale and Barrie Leay, who’s the former chairman of the Electricity Association of New Zealand. We basically set up a small business to research why the solar industry wasn’t bigger, part funding a study with the Nelson City Council and EECA. We looked internationally at what the barriers to solar had been, what had worked and what hadn’t.
And what did you conclude?
We discovered the biggest barrier to solar in most communities has been the large capital cost upfront. Most people can’t find $4,000 to $6,000 out of their everyday savings to install solar, which isn’t surprising. We persuaded Nelson City Council to put in a unique financing mechanism that allows homeowners to pay off the costs of going solar against the rates. We then attracted some innovation funding from EECA and from the Tindal Foundation to run a pilot in Nelson and prove the principles behind the idea.
Is the financing mechanism a first in New Zealand?
Yes and it’s unique because the solar system doesn’t belong to the individual – it’s attached to the house. When you move home, the solar stays on the house and the loan stays with the house. You’re basically upgrading the infrastructure of the country as a nation-based initiative.
So if you move, you’ll lose your investment? Seems a bit unfair.
Yes, you would have to start again but an average solar system increases the value of your home quite significantly. In the States they’ve come up with a metric to apply to solar hot water, which is if you spend $5,000 or $6,000 on a solar hot water system, it adds around $15,000 to the value of your property. So what you find is that putting solar on your home increases the value of your property and helps you save cash on an ongoing basis.
How successful has it been so far?
In the first year we put more solar systems on rooftops in Nelson than the whole Auckland region. Suddenly this little place in the sun outmatched Auckland in year one. We went from putting in 30 or 40 systems a year in Nelson to 270 systems. We reckon that if we had the same penetration rate of Israel – where 90 percent of homes have solar hot water – it would save Kiwis about half a billion dollars a year in cash that is currently used to buy electricity.
Have other councils seen the light?
We have 35 other councils looking at the schemes. We’re hoping we can take Nelson’s $9 million scheme and a year from now have $100 million worth of financing in place for solar in New Zealand.
Why not go straight to the heavy hitters in politics?
Our view as a business is that central government is never really going to do anything other than play around with initiatives around climate change. I think the real change is going to come from the ground up and it’s going to come from city council. They’ll be the real drivers.
Which country displays the greatest solar technology leadership?
China has really taken the lead in making solar more affordable in many respects – more than the US has. They’ve put more than 30 million solar hot water systems on roofs in China. They’re really committed to the technology and are right at the edge of innovation.
How is ‘clean and green’ New Zealand faring when it comes to facing up to the realities of climate change?
I think government policy around climate change is confused. I think the approach – based on putting a price on carbon – is fatally flawed. I don’t think we can trade our way out of the crisis we’re in. I think for New Zealand or any country to deal with climate change a more fair approach needs to be introduced.
And that approach is...?
The current approach is cap and trade but I believe a system called ‘fee and dividend’ offers a solution. It’s a system that’s been proposed by a number of the world’s leading economists, including James Hansen, who was recently in New Zealand. Everyone who generates or brings carbon-based products into the country pays a fixed fee based on the amount of carbon in their product. That cash is then collected and distributed to every Kiwi as a dividend. The money is paid to you to help you buy and transition your way to a carbon-free economy. So in New Zealand for example, each man, woman and child would be getting about $9,000 a year to help them buy products that use less energy. The system would stimulate far more innovation in this country than the current approach, which is really designed to benefit vested interests.
Sounds good in theory. But would people do it? Especially those who barely have enough money to meet basic needs as it is?
If you take fuel for example, the costs that will be put on fuel will make buying fuel increasingly prohibitive. So if you don’t start spending that dividend to transit, then your life is going to become increasingly expensive and less affordable. Right now the current model is an unfair system that just transfers the burden of the costs to the customers while industry ends up paying very little. It’s great for Wall Street banks but it’s not great for the planet because it doesn’t create a mechanism that will allow us to shift our economies at the pace we need to shift them. What makes anyone think that a cap and trade approach will work? It has fundamentally failed and it’s time for a rethink.