Haydn Fletcher

Next year promises to be a big year for solar projects in Queensland and NSW, according to Canadian Solar, with utility-scale solar and combined storage and solar installs for edge-of-grid and off-grid communities driving increased Australian business for the company.

The PV panel manufacturer and installer has been operating in Australia since 2011, initially mostly supplying panels for projects, but in the past two years has moved more into utility-scale projects, country manager module business Haydn Fletcher says.

The ACT and Western Australia are also expected to see a small number of projects next year, with the reverse auction in Victoria also potentially generating opportunities.

Queensland and NSW are key areas because there are a substantial number of “fringe-of-grid” communities, Fletcher says. It’s a market the company is actively targeting.

The company is working on solar farm projects at Longreach and Oakey that have received funding from ARENA.

Fletcher says projects such as Longreach are important for energy security.

“The town has just one line coming in from the grid,” he says. “If it goes down, the town is without power.”

The company is also installing 5MW of solar generation at Normanton, another fringe-of-grid community, in conjunction with Ergon Energy and a local developer.

Fletcher says Ergon has become involved as it gives the energy company an opportunity to research and trial the benefits of the renewable supply in terms of grid stabilisation.

It is “quite small” at 5MW for utility-scale, Fletcher says, however he thinks it is likely a substantial number of projects between 5-10MW will eventuate in the near future.

In the latest round of ARENA funding, for which his company has applied, he expects to see between eight and 10 projects funded.

Outside of ARENA-driven activity, the company is also finding big opportunities, including currently quoting on a 100MW project for 2017 or 2018 construction.

“We have been waiting a long time to see this level of activity,” Fletcher says.

The downward shift in prices as the market has grown is also helping encourage activity, with the ROI coming down considerably, he says.

A lot of projects are also influenced by the exchange rate, he says, as a lot of the equipment, including panels, is imported.

“Five years ago, for every 20 enquiries, you might get one job,” he says. Now the enquiries are coming thick and fast and more of them are converting to sales.

Fletcher says the community-owned renewable power model is one Australia will see more of, particularly for the fringe-of-grid communities. It is something he says is seen overseas fairly often. In Europe, for example, communities are purchasing their part of the grid from the energy provider and setting up as an independent, renewably-powered large-scale microgrid.

Fletcher says communities like Longreach are “ideal” for setting up these kinds of co-operatives.

Health and education key sectors

Two built asset sectors where there is a great deal of interest in solar are health and education, and the company is currently looking at a tender put out by the University of Melbourne for on-campus solar.

However, he says the challenge these two sectors often have is a lack of roof space to generate enough electricity.

Being large power users around the clock, he says he’d like to see them build their own solar farms out of the city and then set up PPAs with energy retailers to buy the power back.

“That’s the best thing those heavy users can do down the track.”

In terms of energy storage solutions, it’s still “early days” in the market.

“We will see over the next few years who’s still around and where the pricing’s at,” Fletcher says.

He says the Tesla brand name has “done wonders” for the storage sector.

The company works with a number of different storage providers, including both lithium ion technologies and flow-type batteries.

It is also about to launch its own residential storage technology, a lithium ion based solution that includes an uninterrupted power supply element so it can function off-grid if mains power goes down. Stages two and three of future product development will be to increase the storage in size so it can be used for larger-scale projects.

Because Australia’s market for solar has been the reverse of the US and European markets, being driven by the residential uptake first rather than utility-scale and commercial installs, he says that now the shift to utility-scale is underway the company is leveraging knowledge transfer from its North American operation for its pipeline of major projects.

Some of the Canadian staff have been seconded to the Australian operation to help with utility-scale projects, and conversely, some of the Australian personnel are assisting the North American arm with small-scale and residential.

Fletcher says that ARENA and CEFC funding has helped bring down the dollar per watt install cost for large-scale solar and given banks and other lenders confidence to invest, and that perhaps in some ways the subsidies have done their work and may not be required going forwards.

“It is highly likely the original scheme’s intent has been met,” he says. “But it is too early to say if we need more [funding] or not.”

Despite the number of large-scale projects already up and running and in the pipeline for the next 12 months or more, Fletcher says that, at this stage, he does not think Australia will meet the installed renewable capacity aimed for under the Renewable Energy Target.

“All the indications are that we won’t meet the 2020 target,” he says.

“Beyond 2020, who knows? I’m not holding my breath.”