By Tina Perinotto
19 August 2010 – Lend Lease’s Chris Carolan is a happy man right now. He’s heading up a new company venture that has the potential to transform the average Australian’s view of renewable energy, by making it safer, cheaper and easier to have a mini-solar energy plant on the roof of your home or workplace.
In the process he may just be in time to rescue an industry that shows signs of heading down the same path as the Federal Government’s failed attic insulation rollout.
The new company, Lend Lease Solar, is planning big things. With its main ‘channel partner’ in energy, AGL, the venture has instant access to up to three million households. That’s not bad for a start-up.
It has also teamed up with two solar panel suppliers, the US firm First Solar and the Norwegian firm REC, and plans to build a 100-strong team to roll out the business.
Carolan says portfolio managers of commercial property have already been knocking on the start-up’s door, especially for application in buildings in Australia’s more northern states, where the sun shines the strongest.
He is confident that the package will substantially lift the game for solar energy systems in Australia, especially when it hits the market on 1 September, when the website www.lendleasesolar.com.au goes live.
The package includes high safety standards: guard rails will be the first element installed on the roof; there will be on-site assessments of the roof’s angles, orientation, shade and structural issues; all assessors and installers will be directly employed by Lend Lease Solar, rather than subcontracted, and each solar unit comes with a 20-year guarantee.
To top it off, there will be a finance offering through a financial channel partner that has not yet been announced.
It could be a very smart move.
Recent preliminary research by The Fifth Estate on solar energy systems at the household level has revealed an industry that is starting to resemble the roof insulation scheme: a great idea spoiled by some unprofessional and shonky operators.
Industry sources complain of rogue competitors, including large corporations, who sell units online or through call centres, which rely on a Google snapshot of the premises, no prior on-site assessment, and that demand upfront payment before sending third-party contractors to install the unit.
As a result, units are often installed in less than ideal orientations towards the energy source — the sun. There are anecdotal reports of subcontractors installing equipment on east-facing facades.
Are the reverberations of the insulation scandal driving some of the thinking here, especially on safety?
“We’re not happy with the levels of public safety in play,” Carolan says rather tactfully. “It’s not to our satisfaction, coming out of Bovis Lend Lease.”
“We are designing a safety assessment system that will require handrails to be installed on the roof before all [other] installation. It’s a three-step process: rail first, install [solar unit], then remove [the rail].”
On the broader issues of poor service, especially on-site inspection, Carolan says: “We believe the market lacks sophistication, as a service. There’s a lot of customers dissatisfied.”
As a result of these anecdotal findings, the company has undertaken long and deep research. “We’ve been working on it for 12 months now,” Carolan says.
“We’ve had 250 expression of interest from staff, who have become our guinea pigs.” Each of these has worked through the prototype website. “We’re up to version 17,” he says.
The website will be bursting with graphs, charts and tools so potential consumers can get a thorough grasp of what is on offer. There will be data on the solar unit itself (its lifecycle, expected energy output, etc) and various scenarios, including the financial merit of the investment compared to, say, ploughing the money into the mortgage on the house.
Each state and territory’s feed-in tariffs will be set out on the website. The difference between net feed-in tariffs (the energy sent back to the grid for payment, net of household use) and gross feed-in tariffs (where all solar energy is paid for) will be explained, as will the lifecycle of the solar unit.
However, despite all these efforts there will still be disappointed customers. Some will simply be knocked back, for instance if the angle of the roof is not suitable, or if there is too much shade, or if there are heritage issues.
If the house is heritage protected, Carolan says, “that’s as far as it goes”. It’s not because of concern with development approvals (although some councils have banned solar arrays on aesthetic grounds).
“If there is a heritage classification, [the application] goes no further.”
One of the issues, he says, is the development approval process that could confuse the service offering.
“The other issue is the structural adequacy of the roof and the fragility of the tiles. If it’s a slate roof then you’ve got structural issues. You can almost bet on that.”
With all these issues to consider, and the extra safety provisions, surely the cost of this solar PV system will be more expensive than most?
Not at all, Carolan says. The economies of scale made possible by the venture mean that a 1.5-kilowatt system will cost an astonishingly low $3690. (TFE’s research found other systems’ prices were much higher.)
What about feed in-tariffs? Some suppliers told TFE these might soon come to an end in NSW, where the rate is 60 cents a kilowatt hour (or 65 cents a kWh from Origin Energy if you are a customer). Through AGL it will be 68 cents.
Carolan says there are no guarantees about feed-in tariffs but he believes the chances of them being phased out are thin.
“It will be continued because the Victorian Government just announced large feed-in tariffs,” he says, referring to the recent announcement that feed-in tariffs in Victoria will be extended to large commercial applications, including shopping centres and industrial premises.
Although the details have not yet been revealed, Carolan says he understands the Victorian Government intends to establish a working committee to consult industry about the plan.
If he’s right about tariffs and the general direction of take-up of solar energy, Lend Lease’s solar venture may well have a big impact on consumer sentiment towards renewable energy.
For now he is busy adding the finishing touches to the retail offering and making sure commercial property portfolio managers are happy with what they might sign up to.
It’s all good on the solar front again.
The Fifth Estate – We can’t wait for the future