Commercial scale rooftop solar market facing oblivion in Australia

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Solar industry says proposed changes to RET could signal end of commercial scale solar market in Australia.

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The market for commercial-scale rooftop solar is facing oblivion in Australia if the government implements controversial proposals put forward by RET Review panel it appointed.

Installers and analysts says the cocktail of measures put forward by the Warburton review will bring Ausralia’s fastest growing solar market to an effective halt.

The commercial scale solar market – between 10kW and 100kW – was slow to take off in Australia, but has been accounting for around 20 per cent of new installations in recent months as businesses recognise the cost savings available.

south australia solarHowever, the industry says this market will evaporate if the government accepts the review recommendations to end incentives for small scale solar immediately, or lowers the eligibility for those certificates from 100kW to 10kW.

“This will decimate the Australian commercial solar sector, and put us back to the stone ages,” said Jeremy Rich, from solar firm Energy Matters. This, as the rest of the world continues to adopt commercial solar solutions at a rapid pace, helping their counties to reduce their dependance on fossil fuels.

“Renewable energy is only going down in cost, whilst fossil fuels will continue to rise in cost. This change to the Renewable Energy Target if actually adopted in Australia will make Australia business uncompetitive going forward,” he said.

“Our elecricity bill costs will continue to rise whilst USA, China, Japan, etc adopt solar energy at a rapid pace enabling their industries to shield themselves from rising electricity bills.”

Warwick Johntson, from leading research firm Sunwiz, said cutting the eligibility to the SRES from 100kW to 10kW would force commercial businesses to install expensive meters – offsetting any benefits from installing rooftop solar.

“The commercial sector was a big growth area for the industry, taking about 20 per cent of the capacity in recent months because businesses were looking to install solar systems to reduce costs.”

He also said such a move to reduce the eligibility could raise safety issues, as such systems would no longer be regulated under th SRES scheme – and encourage installers to use cheap and poor quality products.

 

 

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15 Comments
  1. michael 5 years ago

    “Renewable energy is only going down in cost, whilst fossil fuels will continue to rise in cost.”… business cases for installing solar will only continue to get stronger, with or without the RET, so why will solar industry wither away to oblivion? are they really advocating a minimum enforcement of uptake or subsidy to that of the US, China and Japan?

  2. Mark Roest 5 years ago

    It looks like it is now officially time to map out a non-subsidized path to doing business anyway. The cheaper batteries are coming, so come up with cost curves that include a range of levelized costs of charging and discharging in total system cost for doing 10 to 100 kW solar systems, with sufficient storage availability (both on-site and in-neighborhood) to quit the grid entirely. Then factor in financing, at reasonable to low rates. The idea here is that if people are going to abandon the grid until these coal companies die off, financing can be just as sure a thing as if it were subsidized, because your electricity prices are so high. With the Net, you can pre-sell (get contingent commitments to buy) before jumping in the water. In order to bring the financiers to the table, you need to organize like a shadow government, or a superbly run trade association, and float all the boats by doing scenario development, planning, and design of terms for each market. I know you guys have the analytical chops to do this! By including no net negative cash flow terms on the financing for those otherwise unable to afford it, you eliminate the issue of unfair burdens on the poor — just design those potential burdens out of the system you create! Then, sell it to the local communities, and on talk radio, and especially on the Net, and get students riled up and engaged in projects designed to solve the remaining problems for you and for society. Then go to whomever is able to sell batteries at lower prices and higher performance at that time, and say this is the price we need for this market of so many kWh, and this is the price we need for that market of so many kWh, and what is your bid?
    What I am really saying here is that it comes down to adjusting to broken expectations, both for your industry and for democracy, and taking matters into your own hands in a legal, and very sportsmanlike way! Together, those who want to preserve life on this planet can take the Abbot regime down both before (by making an end run around their corruption) and at (by smashing them in the voting booths) election time.

    • Rob G 5 years ago

      Mark, I like your thinking. While the RET may remain intact,we should actively have a few plan Bs. When I bought a 5kw solar system nearly 2 years ago I paid 10k after subs, now that same setup has dropped by at least 2k. This kind of disruptive drop won’t need incentives to push it, the value is easy to see.
      As a person who has worked in advertising land for sometime (yes I have worked on 2 of the dirty 3 energy companies) I can tell you that so far the advertising of solar has been weak. There is some real potential to really share the true advantages solar brings. A chance to really educate the wider population. For starters politicians constantly tell us that coal is cheaper, solar is unreliable etc and many people believe it because there is no other voice to challenge that view. Advertising with education tool can and will bring sales.
      Another possible plan B that can mix with your thoughts might be legal loopholes. If a community or large group of individual interests team up can solar limits be avoided. For example, corporate scale solar owned by multiple businesses in say a business park. Each businesses has their quota, but when joined you get less waste and more power. I’m all for inventive thinking to beat the red tape. I like author/speaker Tony Seba’s story about how the Golden Gate Bridge was built by the public funding it in the middle of the Great Depression, talk about people power! They too, had to deal with vested interests trying to use all kinds of scare tactics, but they won. And so will we!

      • Mark Roest 5 years ago

        One really cool way would be to gamify the simulations. I think several cities in Australia now have tools that show what you can get out of solar on each specific roof.

        What if you came up with a gamification strategy to get people to explore the model for their house, and for their neighborhood, and start fine-tuning the result to see what specs would enable them, individually or collectively, to sever the cord and go off the grid? If these were celebrated and aggregated, it would be pull marketing, and someone could set up reverse auctions for Engineer, Procure, Construct, Maintain, and for finance.

        The game dashboard could be designed to show the progress of this process, and also the convergence of the potential players in a big finance package and work for all of the decent installers, divided up by how many permanent employees they have and how fast they can install. Some way of matching certain types of installs with the contractors who do them the best (who specialize in them) could be fed into the algorithm.

        Regards,

        Mark

        • Rob G 5 years ago

          Hi Mark, yes gamification can pull a lot of interest into the product/service – especially when it puts the user into a position of control. I’ve seen it firsthand with some of our clients. I suspect that such ‘tools’ will be a normal part of life in less than 5 years, afterall we all want more control of our power and what we pay for it. When that arrives, people will want to be making their own power. Your idea of this app being able to plan uniquely for your home with workarounds to get the best deal from the laws of the day, is good.

          The scope really is endless on how digital smarts can help renewables for home users. It comes as no surprise that the like of Google are honing in on this. Gamification certainly offers a different road to bolster interest. It’s a smartening up of society that makes this so viable.

          Outside of the digital space, I think large scale advertising in the form of outdoor is the best option for home solar. When you’re outdoors in a train or car it’s a good state to think about solar – especially if its sunny. Clever creative, would build a panel into the billboard and have some kind of counter on it. For example it might say this one panel is powering this (e.g. fan/kettle etc) OR made $10 worth of electricity today. Smart thinking will capture an audience and get them to do the maths.
          Today, solar advertises in all the wrong spots and says the wrong things (5KW only $5,000! – what does that mean to a potential customer??) Plenty of room to improve. Even small businesses up against big utilities have something better to sell.

          Cheer!

          • Mark Roest 5 years ago

            Hello Rob,

            Is any part of this within your professional scope? Do you see a low-cost way forward, toward more resources?

            Regards,

            Mark

          • Rob G 5 years ago

            Hi Mark, yes several of these ideas are well within my skill set. I am passionate about what I can bring to an industry I want to potentially be in. (in one way or other!)

            I am a designer by trade. My skills are in marketing strategy coupled with idea generation then through to the design. Resourcing the skills needed to achieve this list of thoughts above will depend on a budget – the more skills you can bring the better your market effort will be. That said, I have worked on very big accounts with 1-2 other people and have had some very pleasing results.

            With gamification, it requires back-end coding skills for which my work colleagues are experts in, that part is expensive – from recollection it starts at about 80k!

          • Mark Roest 5 years ago

            Hello Rob,

            A follow-up thought (actually a foundational thought):

            There is a whole business ecosystem around electricity generation, storage, and use. There is the one we have so far, and there is a suite of breakthroughs between here and the horizon. An investment in gamifying the entire information ecosystem, in an integrated way, in conjunction with setting up incubators, MeetUps, worker-owned factories, producer cooperatives, and community development and mobilization programs, which are all synergistic with the ecosystem, can allow the cost of the core work to be allocated among the ecosystem components, along with the costs associated with their customizations, giving the entire assemblage a substantial cost advantage.

            Far beyond that, a movement can build a cohesive social system which is egalitarian, and set up a truly resilient and sustainable economy which can slow, and possibly eventually reverse, climate breakdown. I have a vision for this process, and for the information management tools it will take to bring it to fruition. It is designed to be distributed and flexible, accounting for all of the combinations of ecosystem and culture in its comprehensive design science (Bucky Fuller) approach to business, infrastructure, and relationship with the environment.

            It will also take some marketing. 🙂

            Regards,

            Mark

          • Rob G 5 years ago

            I share this view. Have your read Jeremy Rifkin’s Third Industrial Revolution book? He strongly believes that energy will be managed in ways you mention and this will fundamentally displace the large utility style way of selling power.
            Bucky Fuller was an amazing man. Not to drop names but my step-father, a retired design professor, personally meet Fuller and has been forever galvanised by his futurist thinking. What would he have done in our situation?

          • Mark Roest 5 years ago

            I have not read the book, but I have read Reinventing Fire, by Amory Lovins and the staff of the Rocky Mountain Institute.

            I never personally met Bucky, but I took his lecture course in college in spring semester, 1966, and attended World Game in San Francisco in the early 1970s. Those two events definitely were major drivers of the course of my life since then. And the inventor of the batteries I’ll be marketing was a protege’ of Bucky’s. (Small world!)

            I think Bucky would be working on two main projects: inventions for sustainability, and the global planning system he designed, built around the Dymaxion Projection and a large library of information. As he said, the best way to create change is to do something that makes the incumbents obsolete! Today we can use computers, geographic information systems and social media to support the planning and mobilizing necessary for a paradigm shift.

            What is your stepfather doing in his retirement, and where does he live? What kinds of designing does or did he do?

          • Rob G 5 years ago

            Yes, I know that Bucky quote and how true it is becoming when we see how solar is a wrecking ball through old fossil fuels. As my step father tells me, he was a man who was very into sustainable living.

            Today my step father just enjoys his peace and quiet. He struggles to understand how a person like Abbott could get to power and his backwards attitude to new technology. He is a retired industrial design professor. In fact, he too was disrupted by design (fact of life in his field) He was sent to have the first mass produced motorcycle in NZ, but the onslaught of japanese bikes made his design obsolete.

            On wind power, he thinks turbines are very aesthetic and struggles at the likes of Joe Hockey type of insults on them. Funny now that I think of it, one of his work colleagues was one of the first guys in NZ to generate and store power at a residential level. Also an award winning designer, this guy had a whole room full of car batteries to save his generated power. That was in the mid 80’s from memory.

            He has so many more good stories, design can be rewarding one of the reason I find renewables and the advancements fascinating. Here again design will conquer inferior ways of doing things.

            Regards
            Rob

  3. Craig Allen 5 years ago

    I don’t get it. There is plenty of talk on this site and elsewhere about solar reaching and going beyond grid parity, with assertions that this is especially the case in Australia where electricity prices are high. Why then is the industry so fragile that dropping the RET will kill it? Surely with the price of solar dropping so steadily, in a few years unsubsidized prices will be back to where they are now.

    • nakedChimp 5 years ago

      AFAIK, changes to the pricing of electricity from the utilities go with those cuts and cause that the potential savings from solar won’t be there anymore – 5-10% at best.

    • Rob G 5 years ago

      It’s only fragile because of our hostile government wants us to use only coal fire power. They are effectively making the market rules, even though renewables are generally cheaper. Big coal has lost a lot of money already thanks to solar. The more solar we get on rooftops, the smaller the pool of paying customers becomes for big coal, so they charge more and more to stay level.
      The tipping point you talk about is coming, but without the large scale solar/wind yet built, thanks to question marks over the RET’s future, will mean big delays. The infrastructure won’t be in place for a few years, but when it is it will be ‘game over’ for big coal.

    • Mark Roest 5 years ago

      The main theme of the stories seems to be that financing won’t be available; that the people with the money are more concerned with absolute certainty that they will be repaid than with saving the planet. The potential saving grace is if the intermittency issue is resolved with cheaper batteries, and the cost of renewable energy systems keeps going down, so that the two sources of doubt on the table are taken off. Then there may be no further barriers to banks lending and funds investing, as long as the government doesn’t have the political capital to simply ban it or levy heavy import duties on it.

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