The Clean Energy Finance Corporation says it is looking to finance more than $1 billion of solar projects, which it says will play an increasingly important role in the energy sector.
CEFC chief executive Oliver Yates says the institution – which has a budget of $10 billion over five years but which the Coalition government has been trying to close down without success – is currently considering more than $500 million in finance for projects worth more than $1 billion.
These include its pipeline of leasing and power purchase agreement products for commercial and residential customers, utility-scale solar PV projects, and large-scale solar thermal projects, and solar plus storage projects for non-grid remote areas.
The CEFC is already playing a key role in the financing of the Moree solar farm – and other non solar projects such as wind farms and the next stage of the Carnegie Wave Energy project near Perth.
It has been taking a particularly interest in commercial solar, which Yates noted accounted for just under 25 per cent of new solar PV capacity in Australia at the moment.
“We expect this trend to continue, as more businesses experience the benefits of solar in helping them bring down their energy and operating costs over time,” Yates said.
“The emergence of battery technology in particular is likely to be a game changer for commercial solar, because of its ability to improve the reliability of supply.
He also said that solar homes typically use solar for about 30 per cent of their electricity needs, but with battery storage, this could be boosted to over 70 per cent. It believes there is similar potential in the commercial sector.
Yates said solar costs would continue to fall, and this was evidenced by record breaking bids being achieved for new projects in the US, the UK, Dubai and South Africa.
In Australia, the CEFC is working with project proponents, major utilities and retailers to expand the range of solar finance options, to deepen solar penetration in both the commercial and residential sectors.
There are signs that the commercial PPA market is poised to grow. Nick Brass, from SunEdison, said the corporate market is becoming increasingly attracted to solar.
“Corporate Australia is setting its mind to what solar can mean for its business,” Brass told RenewEconomy. He said it has the potential of making payback times of less than four years and met other outcomes such as corporate responsibility.
The PPA mechanisms were needed because large corporate energy consumers paid low energy rates, and because of the certainty they provided.
Councils were likely to use PPAs, because it allows funds to be deployed elsewhere, and aged care centres were also keen. “The first PPA’s are being written and rolled out, and we will see the first couple of megawatts soon.”
The CEFC is also playing an important role as a cornerstone investor to enable further development of solar technologies in Australia.
“We provided cornerstone investment in NAB green bond issuance, which increases the amount of private sector capital available for renewables and made a cornerstone commitment to Sundrop Farms, in Port Augusta, South Australia, which is demonstrating world leading sustainable agriculture using solar thermal technology.