22 July 2014 — The Clean Energy Finance Corporation has announced $120 million in finance for three solar leasing and power purchase agreement programs to be run by Tindo, SunEdison and Kudos Energy, which will target residential, small business, and commercial and strata-titled properties.
PPAs are contracts whereby customers buy energy generated from solar systems at a lower rate than likely provided by conventional retailers, rather than purchasing the system themselves, eliminating the common upfront capital barrier (especially in commercial settings) to solar adoption while also reducing bills.
Solar leasing and PPAs are used extensively in the US, having been available in California for almost 10 years. There, 75 per cent of solar installations use these zero upfront cost models.
While PPAs are widely used on large-scale projects, the market for small business and residential has been limited in Australia. The CEFC finance aims to deepen this market, expand solar in the commercial and strata sectors, and emulate the boom occurring in the US.
Tindo Solar – Australia’s only solar photovoltaic manufacturer – will receive up to $20 million in senior debt finance to locally manufacture, install and own rooftop solar arrays to residential and commercial customers and sell the power to the building occupants under a new PPA program.
The program is also funded by the Solaire Income Fund, a Lighthouse Infrastructure and Impact Investment Group joint venture.
Savings, the CEFC said, would be achieved with a full end-to-end service for the customer including quotes, technology selection, installation and ongoing service and maintenance.
Through the arrangement, Tindo expects to increase local jobs in advanced manufacturing, construction and other associated renewable energy jobs.
Tindo Solar’s manager of people and business Richard Inwood said the PPAs would be offered to both residential as well as business and government clients needing small-to-medium-sized systems.
Solaire Income Fund directors Mitch King and Christopher Lock said they were looking forward to working with Australia’s only solar PV manufacturer.
“The CEFC is providing important leadership by supporting the Australian solar PPA market, which is an attractive sector for our investors,” they said.
Kudos, backed by US-based Angeleno Group, will receive up to $30 million to offer larger systems targeted towards commercial and multi-unit residential customers.
It will design, install and own solar PV systems and enter into a PPA with building owners or tenants to purchase power from the panels at a rate lower than their current electricity bill. It will also manage billing, operations and maintenance.
By removing the need for upfront capital and allowing the benefits to remain with the building occupants when a tenant moves, Kudos Energy says the PPAs will accelerate solar power in the commercial and strata sectors.
“Working with the CEFC has allowed us to provide this solar PV financing option in Australia so that more people can choose to benefit from solar power, regardless of their circumstances,” Kudos Energy managing director David Jones said.
Global manufacture and service provider SunEdison is coming to Australia and will receive up to $70 million for solar leasing or PPA programs for commercial and residential.
The company will work with local partners to design, install, own, operate and maintain solar PV systems and either lease the system or sell the power from it under a PPA (depending on the contract) to customers.
Pashupathy Gopalan, president of SunEdison Asia Pacific, Middle East and South Africa, said the schemes would provide immediate cost savings.
“We are proud to partner with the CEFC and bring our global project financing and development experience to provide financially attractive, high quality solar solutions to Australia,” Mr Gopalan said.