UPDATED October 29: Australian energy service company COzero says it has developed a business model to insulate itself from “policy shifts” around the Renewable Energy Target and state government energy efficiency programs.
The service model combines a wholly-owned energy efficiency optimisation product, no-capital solar systems, electrical retailing and GreenPower for the commercial property sector, that evolved over seven years “on the solar coaster”, according to COzero executive director, Geoff Alexander.
The scrapping of the carbon tax too, he said, had seen an increase in uptake of GreenPower by companies wanting to have tangible corporate social responsibility measures in place.
Mr Alexander said the company used a three stage process with full service clients, starting with optimising the energy footprint, followed by installation of an appropriately sized solar energy system under a power purchase agreement, with standard grid power or GreenPower supplied through the retailing division to top up energy needs.
Under the power purchase agreement for solar, a PPA fund owns, operates and maintains the system for clients – generally for a ten-year term – with an option for the user to purchase the system outright at any point.
The firm has in-house engineers who model each system to match the site, and Mr Alexander said the major advantage for clients is both the customised nature of the energy supply and the fact it does not need to have a major added impact on a client’s operating expenses budget as it is charged as part of the regular energy bill.
“So it sits on their roof without an up-front cost or a break-fee,” he said.
COzero also works in the environmental commodity space as a certificate trader, and assists clients with developing their own eco-trading abilities.
The company’s model has seen business continuing to grow, with a new staff member Alex Brichta recently employed in engineering administration. In total, the firm has about 20 staff across engineering, modelling, technology, finance, trading, risk, sales and administration.
- See our article BRW rich lister COzero set to expand after Japanese investment
The company has been retailing GreenPower since 2007, and Mr Alexander said there have been definite fluctuations in demand.
“When we started selling it there was a lot of interest, but as policy moved towards a price on carbon interest dropped. Now with the repeal we have seen people coming back to it,” he said.
“It is a CSR issue, and we have still got a lot of CSR clients. If a company wants to retain customers and show they are doing something beneficial, GreenPower is a way to do it.”
He did not think changes to the RET would affect GreenPower, as to change the GreenPower scheme would require the agreement of all the states’ GreenPower managers. At the same time, the company supports the RET being maintained, or even strengthened.
“We support a strong RET, and are keen for it to continue. We are not as exposed as we used to be to those sort of [policy] movements, but we actively support a strong RET both for the market and for what it does for Australia.
“It is good for Australian citizens, and it creates opportunities to attract other investment into the country.”
- See our article Threats to RET bad for GreenPower and possibly NABERS