One Million Solars – where to from here? + PV Market Synopsis: April
One Million Solars! – Celebration or Wake?
Finally, cause to celebrate. And now that everyone isn’t manically installing, there’s also some time to celebrate. The magic million certainly provided headlines, the problem is that the PV industry is in a state of noticeable contraction, and that the next million systems will come at a much slower rate. Paradoxically it was the reduction and removal of policy incentives that were the greatest drivers of buying behaviour, and now that there’s some policy stability (which is actually a policy vacuum), people aren’t rushing to make purchases. When they do, they are buying larger systems because the distorting effect of the solar multiplier has been removed (and because panel prices have fallen so far) – indeed record-high average system sizes occurred in every state in the four months. But customer numbers, overall sales volumes, and total revenue are down for almost all solar companies. There are plenty of applicants for feed-in tariffs in Queensland that are still sitting on their hands. This just means its hard to make a buck in PV at the moment, and plenty of Australian PV retailers are winding up. The celebration of one million solar systems may be followed by a hangover that has all the atmosphere of a funeral wake.
The latest Solar Hot Spots data (graphed above; note that recent month’s data is very incomplete) shows the December mini-boom brought more Victorians out of the woodwork, somewhat unexpectedly given incentive reductions had occurred three and six months previously. There was even a small upwards blip in Queensland (where 44c Feed-in Tariff installations now represent less than 25% of new installations). And while the data since December is far from complete, we can clearly see an underlying market that is stable and has volume comparable to previous periods that fell between surges driven by incentive reductions. But while a stable underlying market will support many companies, most industry profits came from the peaks, meaning there will be some pain in the year ahead.
A minor cause for celebration is that some industry stalwarts have ridden out the wave, outlasted the competition, and are now climbing through the ranks. Congratulations in particular to Springers Solar and the Environment Shop.
Politicians, Please: Engage with the Solar Industry
Dear Australian State Governments,
This is a call to engage with solar industry. Previously you’ve treated solar power like a vote-buying activity that can be turned on and off as it pleases you. You’ve designed unsustainable incentives and abrupt policy levers that have exacerbated both boom and bust. In doing so, you’ve attracted the favour of one million solar households, but now you risk the ire of 2.6 million angry voters.
Market Synopsis
PV Market
- March saw 75MW of PV registered across Australia, a similar figure to the previous four months
- Though Queensland is rapidly shrinking, three quarters of Queensland installations are now post-Solar Bonus Scheme.
- 3kW systems have made a resurgence, and are the most popular sized systems in WA and NSW.
- Our Insights Premium service allows interactive identification of companies experiencing growth, and those whose activity is declining.
Want more information? Subscribe to Insights.
STC Market
- The STC target was higher than the market anticipated, which led to a quick uplift in STC price.
- We are mid way through the Q1 surrender period, and only half the required volume has been surrendered.
- Last week was the biggest week ever for STC trading (when account-shifting trades are excluded). Many Liable Entities are scrambling to source their required volume
- The weekly and monthly STC creation tally are displayed on our website – check in regularly.
Want more information? Subscribe to ClearView.
Solar Hot Spots
Now there’s no solar multiplier, where should you target your sales? This information could help:
- The Top 10 Postcodes for installation volume in 2012 were from Queensland. Within the top 30 postcodes for installation volume in 2012, only 5 were outside of Queensland
- Bundaberg topped the list with at least 9.35MW installed in 2012. Warwick Farm was NSW’s top spot (2.1MW), Happy Valley was SA’s (2.9MW), Hoppers Crossing topped Victoria (4.3MW), and Mandarah was #1 in WA (4.2MW)
- Parkes (NSW) has to be one of the most interesting hot spots – unresponsive to the 3->2 multiplier reduction but setting records in Q1 2013.
Want more information? Subscribe to Solar Hot Spots.
PVsell News
George Kastner of Infinity Solar said of PVsell “How much do I have to pay you to take it off the market?”
We’ve made the following additions to PVsell over the last month:
- Implementation of load profile libraries, providing users with sample residential and commercial load profiles that can easily be adjusted and incorporated.
- Ability to export graphs information to excel.
- Added another IT developer to our production team, and continued training PVsell support personnel.
- Development for many more features is also underway.
Want to be more strategic? Subscribe to PVsell.
SunWiz Activities
In the last month, SunWiz has:
- Performed financial evaluation for a number of commercial projects on behalf of clients
- Begun analysis of the National Solar Schools Program
- Released a PV Forecast for the next five years, together with Solar Business Services.
- Released RETelligence, an LGC market transparency interactive intelligence subscription service.
- Travelled to Sydney, Brisbane, and Melbourne to provide demonstration and training for PVsell
- Met with the chairs/CEOs of the CEFC and ARENA
- Told the world the news of the One Millionth Solar system being installed in Australia
- Rocked out at Bluesfest
Please now engage with the solar industry, and not just for your own sake.
In Germany, the government worked hand-in-hand with the solar industry to design incentives that would avoid painful boom-and-bust. This level of engagement means the German solar industry is prepared to discuss and develop measures to support the ongoing operation of a healthy electricity market and stable electricity network.
By contrast, Australian governments at the state and federal level have ignored the pleas of the solar industry by creating unsustainable incentives and abrupt policy levers that have exacerbated both boom and bust. In doing so, they’ve attracted the favour of one million solar households, but their votes are threatened by your retrospective actions. Had you listened to us then, the incentives you delivered would have cost far less, and you wouldn’t have this issue on the front page.
Now is your opportunity to engage with the solar industry, to form an alliance with the future of our country. Within 20 years, solar power will be Australia’s cheapest form of electricity – and as such it will underwrite the international competitiveness of Australia’s economy. Thankfully we have the best solar resource in the world. But solar power already provides cheaper electricity than residential and commercial electricity supplies, and thus provides people’s first real opportunity to successfully compete against the present electricity industry. In order to smoothly manage the inevitable transition posed by this disruptive technology, you will need the solar industry on side.
We represent the 2.4 Million people who have bought solar power, and the other 18 million people who will purchase solar in the next decade. Their interests are our interests. We’ve stood by them before, and now once more we stand. We will not accept retrospective changes to feed-in tariffs, which are unfair to existing solar owners, and which undermine future solar investment. We will not accept discriminatory tariffs, nor solar scapegoating.
The solar industry recognizes that solar power is an inevitable part of Australia’s future. But we foresee the upheavals that will occur if the transition is not well managed. The time is right for state and federal governments to recognize the part solar power will play in Australia’s future. Now is the time to engage with the solar industry. So that together we can smoothly transition away from a dated electricity model towards a future where there is solar on every rooftop.
Yours in integrity,
Warwick Johnston
Managing Director
SunWiz
Warwick Johnston is the Chair of the PV Directorate of the Clean Energy Council (CEC), and sits on the CEC’s PV Leadership committee and Policy & Advisory Committee. Warwick also contributes to the Australian Solar Council and Australian PV Institute.
Leave a comment