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Solar Energy in Australia

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The following interim report is a summary of the Solar Energy in Australia: Trends and Forecast event which was presented by the Australian Solar Energy Society at the Langham Hotel in Melbourne on the 10th May 2010. It gave the participants an informative 'snapshot' of solar energy industry in Australia, . with presentations made by industry experts and commentators highlighting emerging trends and opportunities. The same workshop format was also held in Brisbane and Sydney. This report includes an executive summary, a time table of the day's events and key points made by each speaker in their area of expertise, the final report to be released after July 2nd 2010 will include copies of the presentation.
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Solar Energy in Australia:
Trends and Forecast

Melbourne 10th May 2010

Prepared by Mr Alex Cross





Overview

The following interim report is a summary of the Solar Energy in Australia: Trends and
Forecast event which was presented by the Australian Solar Energy Society at the Langham
Hotel in Melbourne on the 10th May 2010. It gave the participants an informative ‘snapshot’
of solar energy industry in Australia, .with presentations made by industry experts and
commentators highlighting emerging trends and opportunities. The same workshop format
was also held in Brisbane and Sydney.

This report includes an executive summary, a time table of the day’s events and key points
made by each speaker in their area of expertise, the final report to be released after July 2nd
2010 wil include copies of the presentation.

In reviewing the attached notes domestic Photovoltaic (PV) refers to residential markets,
commercial refers to business operators with capacity for roof installation of PV for
example, whilst industry are utility scale operations.

Alex Cross attended the event as a representative of the National Centre for Sustainability
and the Sunraysia Institute of TAFE.



Executive Summary

The opportunities for the solar industry in Australia are positive; however the
industry is heavily reliant on government funding and policy. A significant
shift in policy and introduction of effective economic market mechanisms will
be needed to continue the industry’s expansion and development.

There are established policies and programs in the short-term until at least
2015. For the small scale market there is the current solar credits program
linked to the Renewable Energy Certificates (REC) and feed in tariffs (FIT)
available across the states and territories with different rates, conditions and
period of enforcement. For utility scale operations there is the Solar Flagship
Program.

The establishment of the commercial market would be extremely beneficial for
the industry as a whole but the lack of policy and pricing mechanism is
currently limiting this opportunity.

With the Carbon Pollution Reduction Scheme (CPRS) on hold until at least
2013, the Renewable Energy Target (RET) and REC are the current key market
drivers for the industry. The realisation of grid parity with PV production costs
and returns for example is not expected to occur until 2018.1 This may be
achieved sooner or later depending on continued improvement in system
efficiencies and introduction of new technology. With the establishment of
Grid Parity the context for the solar industry will be changed again.

The first industrial scale plants will be established in Australia in the near
future thanks to the Solar Flagship Program. The expansion of utility scale
projects faces similar hurdles as detailed above with reference to the CPRS,
grid parity, policy and incentives. In the short to medium term the utility scale
solar industry faces strong competition from existing technology – e.g. coal
fired power stations and early ‘renewable energy’ movers such as wind which
has been able to secure a strong foothold because of lower capital costs and
its impact of project cost than solar along with global adoption of the
technology.

Broadly speaking the establishment of long-term policies along with effective
pricing mechanisms will enable the industry to continue to grow across all
sectors.


The



1 PV Uptake in Australia, Trends and Analysis, Muriel Watts, Australian Photovoltaic Association. Viewed 10th
May 2010

Summary of Event Timetable for Monday 10th May 2010

9:00 Opening Remarks from the Chair– Ken Guthrie, Sustainability Victoria

9:10 Australian Solar Policy Overview
Federal government solar policy review. State government solar incentive programs
Key issues currently facing the industry. The need for strong, united industry action in the
solar sector.
- Wayne Smith, Renewable Energy Consultant

10:00 PV Uptake in Australia: Trends and Analysi
State of the Australian PV Market. Market segmentation by size and application, Market
growth projections. The role of Policy in Shaping the PV market.
Joe Wyder, IT Power on behalf of Dr Muriel Watt, Chair, Australian Photovoltaic
Association

11:10 Solar Thermal –The Waking Giant
The global state of CSP, Different technology approaches. Review of major global projects
What Solar Flagships means for Australia’s CSP industry.
Dr Keith Lovegrove, IT Power

11:50 Victorian Solar Policy
State of the Australian PV Market. Market segmentation by size and application. Market
growth projections. The role of Policy in Shaping the PV market.
John Edgoose, Sustainability Victoria

1:10 Australia’s Solar Research & Development Capabilty
State of PV R&D in Australia. Solar PV Manufacture overview. State of Australia’s Solar
Thermal R&D. Government solar programs.
- Anwen Lovett, Australian Solar Institute

1:50 Next Generation Photovoltaic
- Associate Professor Yasuhiro Tachibana, RMIT

2:30 Renewable Energy Certificate Price Analysi
State and forecast of REC pricing, Trends and analysis of the current REC market. Likely
changes to the RET and their impact on REC pricing.
Ric Brazzale, Director, Green Energy Trading

3:40 Domestic and Industrial Trends
Market segments, and analysis of demand in each segment. Current pricing, and the outlook
for PV pricing. The economics of PV. Emerging ownership and other financial models in mid
and large scale PV applications.
- Grant Egerdie, General Manager Commercial, Solar Shop Australia

4:30 Panel Discussion
Topic – ‘What role will solar play in Australia in 2020?’
All presenters will participate in this important debate
5:30 Close




Opening Remarks from the Chair
– Ken Guthrie, Sustainability Victoria

Ken began by welcoming all delegates, explaining the house rules and intended program for
the day.

His comments were brief and to the point: The solar industry faces chal enges in Australia,
focusing particularly on Victoria existing coal fired generators providing over 90% of the
electricity supply and a cooler climate in comparison with other mainland states and
territories. However Victoria has access to large gas field and a strong industry base suitable
for renewable energy industry and production.

He concluded ‘Victoria needs to move to 100% renewable energy’.
Australian Solar Policy Overview
Federal government solar policy review. State government solar incentive programs. Key
issues currently facing the industry. The need for strong, united industry action in the solar
sector.
- Wayne Smith, Renewable Energy Consultant working as a private consultant and advisor
having formerly worked with Ausra and the Federal government.

The current environment of policy is constantly changing and can be described as a game of
snakes and ladders, whilst the Solar Flagship Program is a ‘ladder’ climb for the industry the
delay of an Emissions Trading Scheme until at least 2013 is a descending ‘snake’.

The solar industry is important to Australia; it currently employs 6000 in the residential
market with this figure set to double by 2020. The use of ‘Solar’ is valued by the population
with over 50% wanting for example, to install solar hot water systems. This support
establishes a strong building block for renewable energy policy going forward.

However the solar industry is currently very dependent on Government policy, for example
the solar credit program will change in the future and in referring particularly to the
photovoltaics residential market the only certainty is market uncertainty.

Renewable energy target & Policy Today

The Federal government has set a target of 20% electricity supply from renewable sources
by 2020 made up of:
- Small Scale Renewable Energy Scheme (SRES) – Domestic and commercial
- Large –Scale Renewable Energy Target (LRET)

LRET will cover 41000 GW hours or 90% of the Renewable Energy Target (RET). The
contribution of SRES to RET will be uncapped, but there will be a fixed price of $40 per
Renewable Energy Certificate (REC) for both Solar PV and Solar Hot Water. The incentive for
uptake of SRES PV will be delivered by the Solar Credits Program commencing with 5 times
multiplier in the years 2009 – 12 reduces to multiplier of 4 in June 2013, 3 in 2014, and 2 in
2015 when it ends. There is demand for further amendments to the RET for SRES as there is
no cap on Residential PV. Modelling expects that demand wil be exceeded.


In addition, with no price on carbon established until at least 2013 through the CPRS , the
RET will be the key driver for the industry in the short-term.

Solar Flagship Program - SFP
$1.5 Billion to be spent on 4 large scale projects with two Concentrated Thermal plants and
two Photovoltaic systems developed. Made up of two rounds with each round announcing –
one PV and one thermal project. At the closing date for the program there were 52
applications, of those 6 – 8 will be shortlisted2.

‘This is a lottery’ Mr Smith considers the SFP a lottery because of the finite number of
projects and the number of applicants.

Notes regarding Federal Opposition and State Government Policy
With the Federal election looming – the opposition has its own policy including Solar
Sunrise. State governments are impacting the market with net and gross feed in tariffs
based on their own pricing and policy.

The Future Policy: To stimulate the market

Looking forward to the future the following could be considered:
- National Feed in tariffs for residential, commercial (business e.g. – installation on
roofs) and industry scale solar. The ACT / NSW residential feed in tariffs may
provide the ideal model, whilst for commercial operators the ACT is currently
examining the feed in tariff.
- Feed in tariff for large, scale solar would be set at a much lower level and differ
across the states.
- Introduction of Loan Guarantees – these are promised by government to pay if
the project fails e.g. USA announced $1.37 billion loan guarantee to BrightSource
Energy.
- Increase and expand RET to 30% @ 2030 to provide incentives beyond 2015, with
wind set to take 80 % of RET; incentives for the solar industry are needed to take
a larger share.
- Time of day incentives in RET.
- Income Tax credit and capital allowances, with cleantech R & D tax credit.




2 Note: at the time of this seminar no announcements had been made see http://www.government-
grant.com.au/2010/05/solar-flagship-program-round-1-short-list/
For the latest update and shortlisted projects.


PV Uptake in Australia: Trends and Analysis
State of the Australian PV Market. Market segmentation by size and application. Market
growth projections. The role of Policy in Shaping the PV market.
Joe Wyder, IT Power on behalf of
Dr Muriel Watt, Chair, Australian Photovoltaic Association

The development of the PV market has been impacted by policy agreements of various
federal and state political parties and currently the PV market continues to exist because of
the Solar Credits and RET programs.

For the year 2009, the annual instal ed PV capacity by Australia put it in the top 10 countries
worldwide. This is important forAustralia to be seen to be acting on the world stage.

The continued expansion of the PV uptake will be impacted by price. Whilst the Solar Credits
currently provides incentives, it also artificially keeps the system price high. Prices have
come down, but this has occurred because of expanding production capacity. A doubling of
production has reduced costs by 20% along with the reduction in silicon costs. Over the next
5 years the Balance of System Costs (BOS), i.e. inverters, mounting systems and installation
will become important factors.

In the long-term, the continued upward trend of expanded PV capacity in Australia will be
reliant on grid parity e.g. cost of electricity equals cost of PV production. In Sydney, this will
be tentatively achieved by 2018. The increase in electricity will be driven by introduction of
carbon pricing, but more importantly the cost of and maintaining distribution networks.

Overseas, the PV market is being driven by commercial interests. In Australia the
commercial market produces 10% of the Green House Gases (GHG) and consumes 22% of
electricity increasing to 32% by 2029 – ABARE. However, currently there are no incentives
focusing on this potential and significant market. There is great opportunity for the
development of the commercial market because generally speaking commercial hours of
operation run parallel with PV production.

The Main Issues going forward:

- Mainstreaming the small “PV” market and moving away from subsidies.
Introduction of stricter building codes and zero energy home targets.
- Developing the commercial scale market between 10kw to 30Mw.









Solar Thermal – The Waking Giant
The global state of CSP. Different technology approaches. Review of major global projects
What Solar Flagships means for Australia’s CSP industry
Dr Keith Lovegrove, IT Power

Concentrated Solar Power refers to several types of technologies that includes Parabolic
Troughs, Towers or Central Receivers with Heliostat Mirrors or Linear Fresnel and Parabolic
Dish.

Al concentrated forms of power need direct sunlight – DNI – Direct Normal Irradiation to
operate efficiently that needs to be produced in the 10’s of MW’s to achieve economies of
scale.

Since 2006 a new wave of CSP systems have come on line with over 700 MW now in
operation. The International Energy Agency (IEA) is looking to bring 20GW annual on line,
but to do so $15 Trillion dollars of R & D is needed for new energy technology.

Trough Systems have the least technical risk, many based on the SEGS Plants - Solar Energy
Generation Systems in California, with 5 Meter apertures. Currently there are 2 market
providers of evacuated tube receivers and 2 providers of the glass facets. Schott being one
of them with the expansion of Trough Systems watch for the Chinese to enter the
production market in the future.

Tower systems – less commercially viable - Esolar, BrightSource, Sener Torresol, Abengoa
all have development in this area and are being very innovative. Tower Systems include –
Steam Receivers, Molten Salt Receivers and Volumetric Air Receivers.

Compact Linear Fresnel – have been developed by Ausra who was recently bought out by
the French Nuclear company Areva and Novatec Bisol which has a 1Mwe demonstration site
in Spain.

Dish Systems has the least commercial development to date – wel known research and
development with Eurodish units has been undertaken. Stirling Energy System has
developed systems. In Australia the former Solar Systems now owned by Silex, was
developing a parabolic dish with concentrated PV.

Projects around the world

USA
In 2007, the Nevada Solar One project was commissioned, using CST Technology a 64MW
Solar Field 357300 m2 in size being constructed in 15 months from Feb 06 to June 07. The
ability to build future plants in such a short time span is principally limited by size and
available workforce.

In the US the introduction of alternative technology is harder to finance and many ‘big’
announcements are made but the number of serious projects is a lot less.







Spain
Spain is leading the world due to premium feed in tariffs which benefit plants smaller than
50MW, thereby resulting in many smaller plants being constructed as opposed to larger
units. In addition, because of a generous feed in tariff adaption of technology such as CST
has been adopted.

Adasol 1 is the new benchmark for solar plants, consisting of a 519.12 m2 solar field and
storage capacity with molten salt, capable of supplying up to 7.5 hours of additional
electricity supply.

Closing Comments

- Concentrating Solar Thermal is versatile and dispatch able.
- Concentrating Solar Thermal is taking off around the world.
- India a market to watch.
- Australia must move fast to keep up. The Solar Flagships program is a great start.
The focus must be on a low risk technology to maximise the benefits of
establishing the market in Australia.



Victorian Solar Policy
State of the Australian PV Market. Market segmentation by size and application. Market
growth projections. The role of Policy in Shaping the PV market.
Dr John Edgoose, Sustainability Victoria

John provided an overview of the solar resources in Victoria. In 2009, the breakdown of
renewable energy production in Victoria was Wind 50%, Solar 1.3%, Hydro 25%, Biomass
24%, whilst Geothermal and Wave made negligible contributions.

Victorian’s solar initiatives and policy are handled through the Department of Primary
Industries and Sustainability Victoria

Programs include:
Energy Technology Innovation Strategy
Smart Energy Zones / Solar Cities
Solar in Schools
Feed in Tariff for small PV
Solar Energy Hubs
SHW rebates

In the recently released Victorian Government program Jobs for the Future Economy - a
number of programs including the Solar Energy Hubs were announced.












Australia’s Solar Research & Development Capability
State of PV R&D in Australia. Solar PV Manufacture overview. State of Australia’s Solar
Thermal R&D, Government solar programs.
- Anwen Lovett, Australian Solar Institute

The Australian Solar Institute is part of the Clean Energy Initiative, set up as company based
in Newcastle with the current sole investor being the federal government.

It’s charter is to advance Solar R & D, Skills Development and Knowledge Base in Australia
and operate as a conduit to international research organisations.





Next Generation Photovoltaics
Associate Professor: Tasuhio Tachibana RMIT

Professor Tachibana provided an overview of the development if PV in the future. With a
strong focus on efficiency to help reduce the costs of energy production

Providing an overview of the generation of cells as listed below.

1st Generation: SI, GaAs
2nd Generation: Thin Film SI, Dye Sensitisation, Organic Bulk Heterojunction
3rd Generation: Theoretical - Multi junction cel s, Quantum Dots solar cells

For the best research cell efficiencies chart go here located at end of this report.






Document Outline

  • Summary of Event Timetable for Monday 10th May 2010
  • Opening Remarks from the Chair
  • Australian Solar Policy Overview
  • PV Uptake in Australia: Trends and Analysis
  • Solar Thermal … The Waking Giant
  • Victorian Solar Policy
  • Australias Solar Research & Development Capability
  • Next Generation Photovoltaics
  • Renewable Energy Certificate Price Analysis
  • Domestic and Industrial Trends
  • Panel Discussion
    • http://www.nrel.gov/pv/thin_film/docs/kaz_best_research_cells.ppt

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