Canadian Solar sees Australia as one of top Asia-Pac markets for big solar

Canadian Solar, one of the top 5 solar module manufacturers and project developers in the world, says it sees Australia as one of the biggest markets in the Asia-Pacific region for large-scale solar projects, as technology costs fall and the market finally responds to new government policy settings.

Canadian Solar has possibly the largest portfolio of large-scale solar projects in Australia, with more than 1.5GW on the drawing board and in various stages of development, mostly inherited through its purchase – basically as a free option – of the portfolio held by Recurrent Energy.

This week it announced that it will build a 4.5MW solar plant at Normanton in north-west Queensland as part of an ARENA-sponsored project to use solar parks to address peak demand and help defer network costs.

It also has another two projects short-listed in the ARENA $100 million big solar tender – also both in Queensland which, as for most of the industry, is their focus for big solar development. It sees 100MW of large-scale solar projects being rolled out within the next 12 months.

“What we are seeing in Australia is an upswing in the market here and the unlocking of market potential,” Colin Parkins, the head of project development in the Asia-Pacific region, told RenewEconomy in an interview this week

“Australia is one of the leading markets in terms of forward-looking opportunities. The government needs to look at opportunities to facilitate carbon reduction (following the Paris climate agreement), and the price of solar is coming down to make it able to compete.”

“Queensland is probably an early stage priority for us – although we are open to engaging with other regions.”

Parkins says Canadian Solar has recently moved engineering and finance teams to Australia to take advantage of the opportunities on offer.

“We see that this market is ready. We’re expanding our team here, and we recently moved project managers here from other regions.”

The key, says Canadian Solar, is on the issue of costs. And on that point Australia is looking positive.

Last year, the company predicted that large-scale solar costs would fall by one-half to around $A75/MWh by 2020 (see graph above). Daniel Ruoss, who heads the Australian development team, says that price level could be reached as soon as 2018, given progress to date.

“We think will get $75/$80/MWh by 2018,” Ruoss said, adding that Origin Energy’s recent assessment that solar costs were already down to around $A80/MWh was probably “forward looking”.

Ruoss said he expected “good outcomes” on prices in the ARENA bidding which, depending on the cost of finance, could fall in at just above $100/MWh, according to UBS analysis of recent ARENA data.

Ruoss, though, says support from ARENA and the Clean Energy Finance Corporation is critical, particularly on the cost of finance until commercial lenders understand the technology fully.

“Costs – for design and construction – is coming down. Everyone is gearing up, and everyone is very, very active, we are seeing a lot of competition.”

Overnight, Canadian Solar announced it had made 4.7GW of total solar module shipments in 2015, which it expected to increase to 5.5GW in the current year. It also has 398MW of solar plants in operation, a “late-stage” project pipeline totaling 2GW in execution, and an early-stage project pipeline of 8.3GW in development.