Victorian Solar Homes rebate brings back the stop-start 'solar coaster'

 
The Victorian government seems to have inadvertently resurrected Australia's solar coaster with its Solar Homes program, bringing back memories of feed-in tariff & STC multiplier application deadlines of yore.
 
Since coming into effect in July of last year, the Solar Homes rebate has helped to propel Victoria to an unprecedented position at the top of of the charts; historically, the state has had one of the slowest rates of solar uptake.
 
But as with many incentives, it's all fun and games until a deadline approaches or the funds/allotment run out. (Although we can also point out that - at least since the Abbott years - the steadily reducing but long-standing STC discount available through the national RET has been a great example of how an incentive can even-handedly support a market rather than engendering unnecessary volatility.)
 
For the Victorian Solar Homes scheme, the solar coaster reared its head for the first time in April 2019, when the rebates were exhausted for the financial year. This left a months long window with 'no oxygen' for installers in the state as many homes held out on purchasing a system until the program reopened in July - with interest-free loans and new incentives for home batteries & solar hot water systems.

How SunWiz has seen it

Charts below show just how dramatically the Solar Homes Package has impacted the Victorian solar market.
 
Chart 1 below shows the quote volume (in kilowatts) put through SunWiz's PVSell software for residential systems in select states relative to the same volume 12 months prior, making it a fairly accurate bellwether for consumer interest in solar. 
 
Editor: note we have identified a large part in the growth shown is due to rapid PVsell uptake. The chart below is smoothed and normalised, showing the average weekly residential capacity of our larger users. The growth is not quite as astronomical, but certainly shows the sales imperative created by the re-opening of the Rebate.
 
For many weeks from when the Solar Homes Package v1.0 came into effect in August, quote volumes were up by 150%. The clear exceptions are a) the Christmas holiday period and b) the weeks following the temporary closure of the scheme in April. Business started to pick back up again in late June as consumers readied themselves for its reopening - with a massive spike at the end of the month (300% over the previous year's volume for that week).
 
Chart 2 below shows the anticlimax of that moment, with the month's allotment of solar PV rebates running out in just three days. Under the new version of the Solar Homes Package (which was rejigged following April's chaos), the next round will be released at the beginning of each month. This means that customers and installers alike will once again have to hold their breath until 1 August.
 
 
 
While the Victorian energy minister has pointed out that rebates for renters, solar hot water and battery storage (in select post code areas) still remain, rebates for solar PV were by far the most popular - owing largely to the fact that PV systems are already mainstream, affordable and a good investment for most households even without the additional subsidy.
 
And Chart 3 shows the impact of the slowdown. It depicts the capacity of residential (sub-10kW) systems that registered STCs only in the first 24 days of each month (So we can show you a reliable comparison mid-way through July). You can see whereas all other states are on path to growth in July Some smoothing occurs due to a lag between installation and certificate registration, so most of the July registration will be from prior months' installations, so it will be interesting to see how the data pans out in coming weeks. 
 
 

How SunWiz can help

SunWiz has addressed Victorian solar retailers needs by developing services that will generate extra sales in this otherwise quiet time. We can help you generate business in system upgrades, battery additions, commercial sales, plus capture more of the available VSR rebates. Please contact warwick@sunwiz.com.au for more information.
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How valuable is your business?

If you think one day you might sell your solar retailing business, what will it be worth?

In my experience, an investor will certainly look at the value your sales pipeline, and also consider your processes (i.e. how well will the business operate without its directors running the show). The solar industry mostly deals with one-off purchases rather than repeat customers, but investors much prefer to see recurring revenue.

One thing is for sure, if you’ve got a lot of warranty liability, then investors will judge your business to be practically worthless. We’ve seen many times where product recalls and widespread inverter failings have led to solar retailers collapsing, which is a risk an investor simply won’t want to bear.

Your installation practices will contribute to an investor’s assessment of warranty liability. An in-house installation team will be seen to deliver better quality outcomes (i.e. less likelihood of a system failure) than sub-contracting out installations.

The quality of panels and inverters therefore carries huge weighting when an investor is performing due diligence. Fortunately, most of the companies that used shoddy product in the past have departed the industry, one way or another, but there’s passable product and there’s exemplary.

But it’s hard for an investor from outside the industry to judge whether the ‘Tier 1’ panels you’re using will have warranty issues down the line. There’s plenty of Tier 1 solar businesses who’ve gone bankrupt. There are a few measures that differentiate superior quality amongst Tier 1 providers: TUV has PV+, there’s a range of additional IEC certifications for PID ammonia and environmental conditions, DNV-GL, Qualification+, TÜV SÜD Thresher Test, Atlas 25+, PVDI, plus the Positive Quality program. All have their place, but unfortunately none have mass-uptake, and none are strong indicators of the financial sustainability of the manufacturer.

This is where the concept of “Blue Chip” solar products is interesting. Supply Partners first coined the term at the start of this year. Just like a naiive investor in the stock market might like the low-risk offered by shares in a Blue Chip company, a naiive investor in a solar power system can more easily trust a “Blue Chip” solar product.  In practical terms, Supply Partners define Blue Chip as:

  1. Time in business is longer than the warranty offered
  2. Diverse range of products
  3. Capability of completing warranty services
  4. $30b in annual turnover
  5. In business for over 30 years

Now, though I don’t completely endorse Supply Partners’ definition (which understandably carries some self-interest), if I were to boil it down to a single line, it would be “this company is guaranteed to honour its warranty claims, even if it pulls out of solar manufacturing”. And I think that’s a pretty sound line of reasoning.

It does include Sumec Phono Solar (who also rank well in DNV-GL’s accelerated life testing), Hyundai Green Energy, LG Electronics, Hanwha Qcells (who are also VDE tested), and a few that aren’t accredited for sale in Australia. Considering solar panels haven’t been in mass production for much more than 10 years, this excludes most of the pure-play panel manufacturers, even though they may be top-quality products with very low rates of warranty claim.

As for inverters, if you were to just look at age, then Bosch (1888), Ingeteam (1940), Fronius (1945), Selectronics (1964), Delta Electronics (1987), MIL-Systems (1987), SMA (1981), Huawei (1987), ABB (1988) would are amongst those that are over 30 years old.

Now, I think the “Blue Chip” concept may speak to a risk-adverse market demographic that truly considers a 25-year product lifetime. And while there are plenty of reasons to choose younger suppliers over more well-established suppliers, if you’d like to sell your business in future I’d select your products very carefully. It could make the difference between a business with some value and a business an external investor wouldn’t touch.

I’m interested in hearing your thoughts and critique of the concept of ‘Blue Chip’ solar products. Email me at warwick@sunwiz.com.au

 

By all accounts, 2018 was a stellar year for Australian Solar Power. To celebrate all of the solar glory, SunWiz has written a series of articles covering 2018 - the key trends, achievements, and milestones for each state and segment of the Australian solar industry. These trends, facts and figures are covered in extraordinary detail in SunWiz’s 2018 Year in Review, which can be purchased for $1995 ex GST, which also includes a complimentary 3 month subscription to Insights, SunWiz’s flagship PV market intelligence subscription.

The topics covered in our Year in Review series are:

  1. 2018 - Australia's record breaking year. In eyewatering charts
  2. 2018 - state roundup
  3. 2018’s Top Retailers
  4. 2018 - Trends in Commercial PV
  5. 2018 - residential revival
  6. 2018- Australia’s magnificent year for solar farms

Australia's magnificent year for solar farms

In this series, we've seen that 2018 was a record year for the Australian PV Industry in the residential, sub-100kW commercial, and >100kW commercial rooftop segments. In this article, we'll look at the record-smashing year for solar farms. Data is taken from RenewEconomy / SunWiz's Large Scale Lookout service.

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Read more: 2018's magnificent year for solar farms

 

By all accounts, 2018 was a stellar year for Australian Solar Power. To celebrate all of the solar glory, SunWiz has written a series of articles covering 2018 - the key trends, achievements, and milestones for each state and segment of the Australian solar industry. These trends, facts and figures are covered in extraordinary detail in SunWiz’s 2018 Year in Review, which can be purchased for $1995 ex GST, which also includes a complimentary 3 month subscription to Insights, SunWiz’s flagship PV market intelligence subscription.

The topics covered in our Year in Review series are:

  1. 2018 - Australia's record breaking year. In eyewatering charts
  2. 2018 - state roundup
  3. 2018’s Top Retailers
  4. 2018 - Trends in Commercial PV
  5. 2018 - residential revival
  6. 2018- Australia’s magnificent year for solar farms

Top PV Retailer by volume in each segment:

SunWiz tracks every individual installation in the Australian market, based upon STC and LGC creation. Most of the largest companies self-register STCs, which provides highly granular and accurate insight into the volumes of the players that make up the top ranks. Our full Year in Review report provides the annual and monthly volumes for the top players in the national STC market, plus the annual volumes of the top players by state and in each commercial size segment in the STC market.  Redacted versions of these charts are shown below, in order to identify the top player and the competitiveness of the state or market segment.

| Category: Newsletter |

Read more: 2018 - Top PV Retailers

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