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How Coal-Loving Australia Became the Leader in Rooftop Solar

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CAIRNS, Australia — Australia is the world’s second-largest exporter of coal, which plays an outsize role in its economy and politics. But the country has also quietly become a renewable energy powerhouse.

About one in four Australian homes have rooftop solar panels, a larger share than in any other major economy, and the rate of installations far outpaces the global average. The country is well ahead of Germany, Japan and California, which are widely considered leaders in clean energy. In California, which leads U.S. states in the use of solar power, less than 10 percent of utility customers have rooftop solar panels.

Most Australians who have embraced solar do not appear to have done so for altruistic reasons like wanting to fight climate change. Many are responding to incentives offered by state governments in the absence of a coordinated federal approach, a sharp drop in the price of solar panels in recent years and an increase in electricity rates.

Politically conservative homeowners have also embraced solar to become less reliant on the electricity grid in keeping with the high value many Australians place on rugged individualism.

In two of the country’s most populous states — Queensland, a conservative stronghold, and New South Wales, home to left-leaning Sydney — as many as half of homes have solar panels.

“The future for New South Wales and indeed the country is one where our energy comes from sun, wind and pumped hydro, not just because it’s good for the environment but because it’s good for the economy” said Matt Kean, minister for energy and environment in New South Wales.

“That’s one of the reasons we’ve got the highest penetration of rooftop solar anywhere on the planet,” he added. “People are doing that because they want to save money.”

ImageThe Friendly Society Private Hospital in Bundaberg installed solar panels to help offset the rising cost of electricity. The panels generate about half of the energy the hospital uses.
Credit…Faye Sakura for The New York Times

But many state governments have taken a very different approach. After the federal government failed to adopt a renewable energy policy in the early 2000s, Australian states began adopting aggressive climate policies and giving homeowners incentives to buy solar panels and, more recently, batteries to store power.

Those incentives kick-started the solar boom, and rooftop solar regularly provides about 5 percent of Australia’s electricity, compared with just under 1 percent in the United States.

Credit…Matthew Abbott for The New York Times

“Coal is still a key generator there, but there are times when rooftop solar is contributing over 6 percent of generation,” said Rishab Krishna Shrestha, a research analyst at Wood MacKenzie Power and Renewables.

The uptake has been especially high in Queensland, which makes up a big chunk of the country’s northeast and includes Cairns and Brisbane. The state has hot, humid weather similar to Florida’s and also calls itself the Sunshine State.

Peter Row of Bundaberg, a city just over 200 miles north of Brisbane that had the most rooftop solar installations last year in Australia, bought a typical 6.57-kilowatt system for his home after he grew tired of his rising electricity bill. Before he installed the $3,000 system, Mr. Row’s monthly bill usually came to about $190. Since then, the electric company has been crediting him an average of about $30 a month because he is generating more electricity than he is using.

“I hate the heat, so air conditioning is really important to me,” said Mr. Row, 59, who is semiretired and runs a small business from home. He and his wife try to run their most energy-intensive appliances during the sunniest parts of the day. “Normally, if you run air conditioning in summer, the bill is incredibly high.”

Mr. Row believes the climate is changing but, like many other conservatives, isn’t sure how much of the change is caused by humans, he said. “I don’t think renewables are the total answer yet,” he said.

Credit…Faye Sakura for The New York Times
Credit…Alana Holmberg for The New York Times
Credit…Faye Sakura for The New York Times
Credit…Peter Row

Another reason Australia has rapidly expanded rooftop solar is that its states have sought to streamline building codes and make it easier to obtain permits. In the United States, municipalities tend to control codes and permitting, and many have not eased the way for rooftop solar, making installations more expensive and time consuming.

“What can California do to get to 30 percent penetration?” said Bernadette Del Chiaro, executive director of the California Solar and Storage Association. “Cut the red tape.”

Despite the growth of solar, Australia’s approach to the electric system has weaknesses, too, as customers face frequent blackouts. Experts blame an unreliable grid, strains on the system from record heat and damage to utility equipment from wildfires.

The growth of rooftop solar itself has caused some problems. Traditionally, power plants supplied electricity and homes used it, making it easy for officials to manage the grid. Now many homeowners are both consumers and providers of electricity, depending on the time of the day. That has forced grid managers to line up power plants that can ramp up or down more quickly to balance supply and demand.

Credit…Faye Sakura for The New York Times

“One of the bigger challenges that’s arising is that the electricity grid just wasn’t designed and built for high levels of rooftop solar,” said Kane Thornton, chief executive at the Clean Energy Council, the country’s renewable energy industry association. “It was designed for coal-fired power stations. We’re seeing many of the rules, and the grid itself, are needing to be reformed.”

More than half of the roughly two dozen coal-fired plants in operation are expected to be retired within 15 years, and it is not clear what will replace them. While environmentalists want more renewable energy, conservative lawmakers assert that the country needs to keep using coal.

“We’ve got to be realistic when we’re making transitions,” said Warren Entsch, a member of Parliament from Queensland in the governing Liberal Party, Australia’s equivalent of the Republican Party. “Coal is going to be part of our economy for, I believe, a long time into the future.”

Mr. Entsch is a special envoy to the Great Barrier Reef, off Queensland. He only recently acknowledged that climate change was the primary threat to the reef.

The recent rolling blackouts in California, the first since an energy crisis two decades ago, highlight the dangers posed by climate change and a rapid switch to renewable energy. Hotter weather can increase demand for electricity while the supply from a grid that relies too much on solar panels and wind turbines can become erratic, producing less power on cloudy and breezeless days.

As the price of renewable energy has plunged, coal-fired and natural gas power plants have increasingly struggled to compete, and some have shut down or sought bankruptcy protection.

As Australia, California and other parts of the world seek to increase their use of renewable energy, they will have to invest a lot more in batteries or other forms of energy storage, experts said.

Credit…David Maurice Smith for The New York Times

In Australia, battery prices are expected to fall 10 to 15 percent this year, according to Warwick Johnston of SunWiz, a consulting firm. That is driving interest: There were more than 70,000 home battery systems in the country last year, and Mr. Johnston expects that 28,000 more will be installed this year.

Eytan Lenko, the executive chair of Beyond Zero Emissions, a climate research and advocacy organization, installed a 17-kilowatt solar system last year along with a battery at his home in Melbourne.

“We’re easily generating way more than what were using,” Mr. Lenko said, adding that the battery had helped keep the lights on during a storm in August that caused a citywide blackout. Climate change, he said, “is going to create more of these storms.”

Still, batteries typically provide power for up to only five hours at a time. That has limited their use, especially by electric utilities.

Credit…Alana Holmberg for The New York Times

Mr. Kean, the New South Wales energy minister, said Australia had to make its electric system more reliable, reduce costs and address climate change with the help of solar, wind, batteries and other renewable technologies.

“This is the economically rational position to take,” he said. “Those people arguing for coal, gas and nuclear are actually arguing for more expensive, dirtier energy. The future is not those things.”

Livia Albeck-Ripka reported from Cairns, and Ivan Penn from Los Angeles.

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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