CEFC signs $20m deal with ET Solar for commercial solar PPA market | RenewEconomy

CEFC signs $20m deal with ET Solar for commercial solar PPA market

CEFC allocates $20m to a solar financing deal for ET Solar to boost commercial solar market. But another financing commitment has lapsed.

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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.

 

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3 Comments
  1. Peter D 6 years ago

    Great! Westfield Shopping Centres could all go solar and many more. This is a no brainer, or are fixed tariffs going to be a barrier?

  2. Kevin Brown 6 years ago

    My local shopping centre in Stafford, Brisbane has an enormous North facing car park with fabric car shades that could be re-engineered with PV panels. I can’t believe someone has yet not done it and entered a PPA with the centre management or the Woolworths supermarket. Hopefully this deal will see many new developments of this nature!

  3. Chris Drongers 6 years ago

    Can someone show the mechanics of how this money will increase PV on the ground? At face numbers, $20M gives about 10MW of PV installed, hardly earth-shattering. If the $20M is security for a business loan at 10%, then $20M expands to $200M or 100MW installed, still doesn’t make the earth move for me. If the $20M is spun around and around to start PPA’s at 10% which are then securitised on at 4% then $20M could potentially initiate $500M of PV investments (250MW) at any time; if the securities are sold each year than this investment could potentially support a quarter of Australia’s current PV installation rate. Does this seem feasible?

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