The Clean Energy Finance Corporation has agreed to provide $20 million in debt finance to Chinese-based ET Solar to provide power purchase agreements to help unlock the growing business market for rooftop solar in Australia.
The debt financing by the CEFC will be topped up by $13 million in equity from ET Solar, and is part of a broader $90 million financing commitment that the CEFC expects will result in around 110MW of new solar capacity over the next two years.
The financing deal with ET Solar – and deals with Sun Edison and Australia’s Tindo Solar and Diamond Energy that were announced last year- is specifically tailored to target opportunities for residential and commercial businesses, business tenants and apartment owners.
ET Solar –which is relatively new to Australia – says it will target large-scale commercial projects in NSW, South Australia, Queensland, and the Northern Territory, before extending to remaining states.
It is looking at solar systems of between 30kW and 2MW. Under a PPA, a customer will buy the output from the solar plant at an agreed rate – and below current grid cost. ET Solar will own, operate and maintain the solar system.
ET Solar is currently installing a commercial-scale solar array on a car port structure for a shopping centre car park, and is looking at similar projects in other states.
ET Solar Group CEO Dennis She said the company will also target other large energy consumers in industries like miners and manufacturers.
CEFC CEO Oliver Yates said there is huge scope to expand and deepen the solar PV market in the commercial sector, although commercial-scale solar has already increased its market share from around 5 per cent to 15 per cent.
“We see the PPA finance model as a way to remove the barrier of the upfront capital requirement which should enable many more Australian businesses to benefit from solar, reducing energy costs and lowering emissions,” Yates said in a statement.
It is the first funding announcement by the CEFC in 2015, which is continuing business despite the continued threat of repeal by the Abbott government, should it ever get numbers in the Senate.
The CEFC has also provided $70 million for a program by SunEdison Australia to offer customers solar leases or a PPA, and intends to launch a residential lease product during 2015.
Another $20 million was allocated for a program offered by Tindo Solar – the only Australian manufacturer of solar PV panels – in partnership with the Solaire Income Fund and Diamond Energy to offer a PPA product to small-to-medium business, government organisations and residential customers.
Tindo has already begun signing PPAs with clients and undertaking installations and with Diamond Energy will offer customers a single bill for both grid-purchased electricity as well power produced under their Solar PPA.
Another $30 million was allocated last year by the CEFC to Kudos Energy, an Australian startup that was to partner a US group to offer solar leases, but this commitment appears to have lapsed because of its inability to secure its own equity partners and financing by the commitment deadline.