2015 predictions: Is this the year we wake up?

Solar Business Services

Welcome to 2015.

Like all of you I trust, I had a great break with family and friends lapping up the wonders of the awesome Australian coastline.

To kick off the year we would like to share some predictions for the year ahead and how the changes we expect will shape the coming year.

The global picture

According to Chinese astrology, 2015 is the year of the Green Wooden Sheep and most soothsayers predict a year of reasonable stability and calm, akin to the personality of the big woolly ram. After a seemingly endless series of increasingly psychotic events of the last few months around the world, one can only hope that the world embraces tolerance and acceptance. Personally, I reckon the extraordinary and indiscriminate nature of what’s been going on will galvanise the majority and ostracize the minority.

Lets hope that we turn a corner this year and get on with more pressing issues facing our big blue planet.

Science and climate

Speaking of which, with the announcements from China and the US in late 2014 and the impending United Nations Climate Change Conference coming up in Paris later this year, the pressure to act may be stronger than ever before for laggards (Australia). The posturing and promises are likely to flow steadily as the year progresses but clearly we can’t keep letting CO2 concentration continue to rise and expect things to remain the same. According to the Muana Loa Observatory in Hawaii, we spent three months above an average of 400PPM last year and in all likelihood this will only get worse in 2015.

Luckily, scientific frontiers are falling at a faster rates than most expected which will help sure up the facts around our climate. The Large Hadron Collider will come back on line in March this year at 13 trillion electronvolts — almost double the current record. The astonishing firepower will help the collider unearth phenomena and fill in gaps in the standard model of particle physics; we’ll learn new, important stuff. At the same time, data from space will accelerate our knowledge of the universe and how it was formed with information expected from Pluto and hopefully, the Rosetta mission which landed a probe on a comet520Million kilometers away, after a 10 year flight.

Meanwhile back in “old blighty”, the National Graphene Institute will open where they will study the wonder-material graphene, which could eventually transform everything from fuel cell technology to battery and computing power and more. Graphene shows massive promise and I hope the opening of this important centre will dramatically accelerate the technologies we care most about this year.

EV’s and batteries

This year will also undoubtedly herald a huge milestone when the 1 millionth electric car is expected to hit the road.  An estimated 300, 000 ev’s were sold in 2014 and new models from the major manufacturers are coming thick and fast. Although we hear about the incredible Tesla range more than most, it’s actually brands like Renault, Nissan. Mitsubishi and BMW that are really gaining ground and selling significant volumes.

If my personal experience on my latest generation Zero electric motorcycle over Christmas is anything to go by, things are just going to get better and better this year. My highlight was taking a “brisk” dusk ride through a nearby National park when the roads were nice and quiet. I entered the tight but fast winding roads with a high powered sports bike on my tail and just kept pushing at a fast but comfortable pace expecting to be passed, but no. I pulled up for a break and the GSXR600 rider following me almost knocked me over in his enthusiasm. “Is that what I think it is? I had my bike pinned to the stops but damn, that thing is just sooooooo smooth! Every time I thought I was going to catch you just steadily pulled away; I’m dumbfounded!”

What’s a man to do. I flipped him the key and said “Promise to bring it back in one piece?” He was gone in a silent flash and I waited nervously for 15 minutes until he returned. “OK, now I get it” he said. “I just can’t believe how easy that thing is to ride incredibly fast”. While my new friend fiddled with a weeping o ring and adjusted his clutch, I took off and just enjoyed the ride.

Battery technology and installations are going to grow and I predict we’ll see in the order of 500% growth this year, after around 1000% growth last year in Australian grid support applications. It’s early days, hard work and requires complex design and sales to get right but storage has arrived for early adopters, make no mistake. The automotive and motorsport lessons are flowing down the pipeline and I wouldn’t be surprised to see more records broken and races won in 2015. My prediction is that an electric motorcycle will beat the 200kmh ave lap speed barrier at the Isle of Mann this year, putting the class within 10kmh of the all time outright lap record speed by an internal combustion engined bike.

Information technology and data

Australians just love technology and as this fascinating study shows, it’s not just the teenagers embracing technology. The greatest growth in social media usage was those aged 65 and older. An astounding 92% of Australians look for information on products and services online and 73% now use their mobile phones to access information. What’s most interesting are the business statistics in this report which demonstrate that there is still loads of room for increasing marketing and sales effectiveness in Australian businesses by tuning in better.

As classic example (which we are addressing ourselves) is web sites which can render quickly and effectively on mobile devices. Many older templates just don’t load well and in the next few weeks we’re excited to announce that we will be launching two new websites that optimise our reach on modern devices (stay tuned!).

Our big prediction for 2015 is that with devices getting smarter and cheaper, load control and monitoring will become an essential part of every solar home. Whether it’s to manage exports, control loads to match tariffs or your new storage system, it appears inevitable that we will see a big shift in 2015.

The utility issue

I also believe 2015 will be a seminal year for utilities. As Christmas day showed in South Australia, up to 30% of that states instantaneous demand can be supplied from solar now, and the sky didn’t fall. As the number of installations continue their inevitable rise (albeit at lower rates than past years) the losses experienced across the generation and transmission sectors will become impossible for them to ignore.  Gas prices are rising and the value of coal is decreasing creating volatile investment conditions and dramatic changes in capacity factors. Moody’s Investors Service and Standard & Poor’s rates coal sector bonds as junk.” ‘If you look at the long term, it’s not getting any better’,” said Standard & Poor’s analyst Aneesh Prabhu. “It’s a secular decline”, highlighted the Institute for Energy Economics and Financial Analysis.

Their shareholders and stakeholders which includes State Governments in Australia will insist on change and I expect to see this become more urgent in 2015. In recent years we saw desperate, aggressive and increasingly clumsy attempts to block the rise of alternatives by some utilities but the new breed have arrived and will get a head of steam this year, accelerating the change.

Elections and politics

On a closely related issue, we have already had an announcement about the Queensland State election and New South Wales has one scheduled for this year too. The next Federal election is slated for late 2016 and make no mistake, the platforms that will be taken to the election are being carefully considered now. By mid way through 2015 the Federal Government will be in a full blown election build up. Between the country’s two largest States and the Federal election build up, I have absolutely no doubt that the countries 4.5 million odd, highly engaged solar voters will make their voices heard.

Stranger things have happened but I expect that this year successful and savvy politicians will wake up and  realise that alienating 25% of the countries voters doesn’t make a whole lot of sense, especially given that energy costs remain high and global emphasis on climate issues is increasing.

The RET barnacle remains firmly attached to the hull of the good ship “Team Australia” of course. It’s still too early to know which way the Government will go but there is a strong chance that residential solar will be saved and chance that commercial solar may get a reprieve too. Large scale is a basket case in Australia as highlighted by BNEF this week. While the global clean energy sector grew 16% around the world bucking recent doldrums, Australia contracted by almost 35% at the same time.

Given the declining value of fossil fuel stocks and the huge growth in clean energy investments (predominantly solar) there will come a point at which our leaders wake up and realise that even if they are in complete denial about climate change, they are going to miss out on the worlds largest change in structural investments ever, if they don’t move fast.

Solar Business environment

We will soon be releasing our latest annual forecasts for the Australian solar industry and I remain cautiously optimistic for 2015. It is predominantly going to be influenced by any RET announcements of course, but either way I don’t see consumers suddenly deciding that solar sucks, do you?

In the background, profit forecasts and sales are up for PV manufacturers, some clever acquisitions were made last year and the supply and demand balance seems to have stabilised for now so that’s good. However, locally, foreign exchange rates are already hurting pricing, economies of scale are not betting any better and  the first salvo in trade tariffs has been fired with the announcement that one solar company is going to close early this year as a result of retrospective duties on solar mounting rails.

For Australian solar businesses I don’t expect conditions to get better in 2015 unless exchange rates improve and consolidation gets a head of steam or, they can diversify and take advantage of the small but valuable storage and data opportunities.

The upshot

Science will take us another big leap forward this year so we’ll understand more about what is most important and urgent. The worlds races will predominantly be united in wanting peace and prosperity whilst Governments and business will have to accept that new economic paradigms are no longer theory but are already driving major decisions.

2015; the year the world wakes up to opportunity, perhaps?

Welcome back.

Source: Solar Business Services. Reproduced with permission.