AGL Energy becomes first big retailer to roll out solar PPA plan

AGL Energy has become the first of the major electricity retailers to formally launch a solar power purchase agreement (PPA) plan, as the major incumbents try to head off incursions into their retail market from the rush to solar and the emergence of rival leasing and PPA offerings and energy service companies.

AGL has branded its product the Solar Smart Plan, and it is being managed by a new division, New Energy, headed up by Marc England, who says customers are looking for choice and access to new technologies.

“Energy companies must innovate to remain competitive,” England said in a statement. “This launch is the first in a multi-pronged new product development approach from AGL’s newly established New Energy division.

Those products include battery storage and electric vehicles. England said that storage would be offered to customers later this year, although not likely as part of a PPA product.

“This business unit has adopted a new lean product development approach to ensure we get more products to market faster and improve them as we learn what customers need.”

AGL-home-promo-solar_v3The launch will not be a “big bang” move but will be a gradual roll-out. Origin Energy is taking a similarly cautious approach, having trialled its PPA product with employees and family, and last week beginning a “soft” launch of it product.

It will be launched in NSW and South Australia first on a “limited volume” basis to residential and commercial customers.  Victoria and Queensland will follow soon after. England says the slow start will ensure that systems are ready to cope with new offering.

AGL says its plan will allowing customers to have a solar system installed with no upfront costs. In return, AGL guarantees to supply a minimum amount of solar energy for which the customer pays a fixed monthly fee (it has not yet announced that fee) for the period of the agreement.

At the end of the agreement, which is for seven or 12 years, the customer has the right to take ownership of the solar system and continue to receive energy for “free.”

England later told RenewEconomy that the fees would not be revealed now – they would be to customers – but would be competitive with other offerings. They will be cheaper than the current retail rate. Those on 7-year PPAs will pay a higher fee for their electricity. (Other companies are offering rates of 25c/kWh).

AGL says its research shows that 81 per cent of households understand that solar can cut energy bills, and half of them think it is worth the investment. It wants to target those who have not been able to afford the upfront capital investment.

“AGL guarantees to supply a minimum amount of power from the system each year and any extra energy generated the customer gets to use for free.

“AGL will monitor and service the system for the life of the arrangement however the customer will be able to track how much their system is producing as well as their usage via a password protected online portal.”

That portal is being provided by GreenBox Australia, an Australian-based technology start-up.

AGL says customers do not need to be an AGL customer, but it says there are “additional benefits” if they are. This includes the rate of feed in tariffs for electricity exported to the grid.

(This story will be updated shortly, ed. 4pm thursday).

Comments

31 responses to “AGL Energy becomes first big retailer to roll out solar PPA plan”

  1. Vincent Selleck Avatar

    Buyers beware! AGL and Origin are happy to collude with the network to change the billing regime to emphasise Network use rather than KWH used which will impact badly for solar households. How will they fare with their own solar PPA’s when the KWH values are diminished in favour of peak KVA interval charges? Anyone buying in to a PPA should be warned now about the plans made by the AEMC that require networks to bill for peak use to disadvantage grid connected solar without storage.

    Locking people into a 25c per KWH regime for a long term contract to buy solar from the roof produced only during daylight hours, when their future bill will comprise mostly of an interval reading of the half hour when they use the most electricity is ludicrous. Particularly when they have to buy all the energy produced by the solar whether they use it or not, as some PPA’s are structured today.

    Read this story to get up to speed – https://reneweconomy.wpengine.com/2014/aemc-paves-way-changes-network-pricing-solar-air-con-25609

    This spells doom for any scheme based on solar offsetting high KWH charges, which is all grid connected solar without storage. Thankfully there are new storage products available now, like our new charging system which retrofits batteries to any existing grid connected inverter with a 5 year warranty on the charger and on the battery life! It installs in two hours and costs under $6,000 fully installed with a 9.6kwh battery bank, making insurance against network changes affordable.

    AGL are part of the push to get solar off grid with their own reseach admitting they expect over 3 million homes to be off-grid or partially off-grid in the next 15 years. Their push into the solar market is once again motivated by corporate greed to prevent account churning rather than a real interest in delivering cheaper power or support for solar.

    Happy to discuss [email protected]

    1. disqus_3PLIicDhUu Avatar
      disqus_3PLIicDhUu

      There’s always knock on work that comes the way of smaller firms when innovation hits the market.
      People look around for a better arrangement with the same equipment.

  2. Perry Chester Avatar
    Perry Chester

    Sounds like a decent offering from AGL if you ask me. Any time we can get additional customers on solar and with batteries included all the better.

    I would assume they will be offering tier 1 product with high quality lithium batteries 10 year warranty minimum so all the better.

    It is true this could adversely affect the small solar operators but if nothing else it will move the product offering forward and make them lift their game.

    PC

    1. Stan Hlegeris Avatar
      Stan Hlegeris

      Just don’t sign anything, Perry.

      It doesn’t matter if they supply good quality equipment or not. Their sole objective is to get you signed up for a long term contract under which you’re obligated to keep on paying them for ten or fifteen years.

      You’d be mad to go down that track. Solar electricity is already as cheap as chips and the cost of storage is falling just as fast. It will make far more sense to own your own solar and storage gear, even if you have to borrow the money. Above all you want to preserve your right to disconnect from the grid once and for all.

      1. Perry Chester Avatar
        Perry Chester

        A decent 5kW system with good gear plus lithium batteries can’t be found for under $25,000 on the market, I like the idea of having it all done for me and insured for the life of the system. Origin is offering a similar style PPA so I doubt AGL will be out to rip people off. Frankly I’ve heard a lot of horror stories from friends who bought systems and the installer/manufacturer is now non existent for follow up warranty work – I’ll pay a premium for ease of use, guaranteed output and peace of mind.

        1. BarleySinger Avatar
          BarleySinger

          Then why do I have a quote in my email (under $24,000) for a 10Kw monocrystaine system with 2 x 5KW sola-x inverters (amazing product) with 10KW of deep cycle gel batteries?

          your prices are about 5 years out of date.

          Subject: Re: Solar Link Australia – 10.0Kw Solar Power Installation (Hybrid Solution fitted with Monocrystaline Modules)
          From: “Solar Link Australia”
          >>>>
          >>>> Thank you for your enquiry. Our installers are CEC Accredited and are
          >>>> also qualified Electricians âEUR” so the system is connected to the
          >>>> grid on the day of installation. All prices listed below are your
          >>>> _âEUR~out of
          >>>> pocket expensesâEUR^(TM) (after rebates)_. In essence if you wish to
          >>>> proceed, itâEUR^(TM)s a 10% deposit upfront and the balance is only
          >>>> payable once the system is installed and connected.
          >>>>
          >>>> Below is some information about our 10.0Kw Solar Installation
          >>>> Package.
          >>>> (Data Sheets attached)
          >>>>
          >>>>
          >>>>
          >>>> * 10.0Kw PACKAGE âEUR” $23,990 Fully installed (Fitted with 40 x AP
          >>>> 250W
          >>>> Mono Panels & Sola-X HYBRID inverters and 20.16kwh (Gel) batteries
          >>>> with cabinet)

          1. Perry Chester Avatar
            Perry Chester

            That’s cool Barley if you’re cool with 10 year old gel battery technology and what brand of panel are you talking about.

            One thing that shouldn’t be glossed over with the AGL offer is they guarantee set outputs, they don’t just install and forget like most of the other solar operators.

            Thanks, I wasn’t born yesterday and this offer from AGL appears to be a welcome game changer in the oh so turbulent Australian solar market.

            Within 3 years more systems will be bought and sold under PPA offers such as AGL’s rather than paid cash or on payment terms.

          2. Perry Mason Avatar
            Perry Mason

            Game changer? A bit of disclosure wouldn’t hurt here – why do you smell like such a shill for AGL?

          3. Perry Chester Avatar
            Perry Chester

            Thanks Perry, don’t suppose you work for Joe’s Discount Solar do you? I’m a believer in a differentiated product offering for the consumer, competition, have you heard of it? Whether it’s agl, origin or any other company offering a differentiated product I say thumbs up, why not let the consumer make the decision? I’m quite sure there will be additional disclosure no need to worry yourself.

          4. BarleySinger Avatar
            BarleySinger

            They are high quality panels (already vetted them out) though not the E21’s I would love (but E19’s to E21’s also cost twice as much per Kw).

            As for battery tech, I *would* prefer the charred cannabis substitute for graphine (far less expensive and very low in pollution) for ‘super capacitors’ and just skip the chemical batteries. However I don’t want to have to wait another 10 years before I buy. I want to stop paying about 15% more per year for my electricity than I would just by buying panels and batteries (South Australia has high power rates, and easy access to solar).

            I know every year I wait the tech is better. But at some point I have to “jump off” and stop supporting the dirty companies, to whatever extent I can do so. As for “which year” I choose to do so … when Sola-X smart inverters came out and them dropped in price, and when PACKAGED with “Deep Cycle Gel Cell battery tech” – the cost got less expensive than my grid connect (over a year ago) it was time.

            At some point you need to jump off of the titanic

      2. Raahul Kumar Avatar
        Raahul Kumar

        Everything I read on this site leads me to believe that solar panel prices will fall even lower, and so will the cost of energy storage. It would be foolish to get locked in a 10 year contract now, when prices are falling.

  3. finn Avatar
    finn

    I just don’t get why any consumer is interested in PPA’s or other over-complicated leasing/financing arrangements, when they can simply add the cost of solar to their mortgage at 5% interest and be cash flow positive from week 1 – even in the worst case scenario of exporting 100% of their energy (which is unlikely). Then do the same with batteries in a couple of years when it makes sense financially.

    1. Perry Mason Avatar
      Perry Mason

      Couldn’t agree more.

      1. Perry Chester Avatar
        Perry Chester

        Clearly you’re not too connected to how the average consumer behaves with their power consumption or solar system – most have little idea how it’s performing once installed. At least PPA will hold the installer accountable for a number of years – of course a lot more comes into it than price, if marketed well with good product this type of offer will do very well in a very cluttered cheap as chips solar market.

        Sorry if I’m giving one of the top 3 power companies the thumbs up but at least they’re expanding the offerings.

    2. Perry Chester Avatar
      Perry Chester

      One very good advantage to an offer like the AGL PPA is that it guarantees a reasonable minimum kWh system output. What does this mean to the consumer? It means your system will be monitored and can also be monitored by yourself within your home via a login portal.

      The days of install and forget (from an installer and warranty) perspective are now a thing of the past with this PPA product. You better believe plenty of pay up front systems installed today never achieve their quoted output figures and over time break downs are common with the consumer having no idea there has been aproblem until they happen to look at their power bill – this won’t happen with PPA for up to 10 years, put a value on that I would say it would be worth thousands.

      1. James Ray Avatar

        A customer who pays upfront could still organise monitoring and service independently with a provider such as Greenbox Australia or Solar Analytics.

  4. Le Clair Avatar
    Le Clair

    25c/kWh. Wow!
    My fully monitored system was installed for free and I pay 10c/kWh which also includes diverting my excess electricity, which would have been exported to the grid, to my hot water system. My bill is down 70% and the rate is locked in until 2018 and then capped at the “super off peak” tariff thereafter.
    25c/kWh would save me about 3% on my bill if I didn’t have solar.

    1. adam Avatar
      adam

      where’d you get that?

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