Australian PV

Association

The Highs & Lows of the PVMarket in Australia

Dr Muriel WattSchool of PV and RE Engineering

University of NSWand

Chair, Australian PV Association

ATRAA 2008

Outline

• Current PV Market in Australia andInternationally

• Key Australian support Programs

• Cost and Price Trends

• A Feed-in Tariff for Australia?

• PV Opportunities for Australia

Australian PV

Association

Australian and International PVMarkets

Photo: GSES Ghana

ATRAA 2008

Development of the Australian PVMarket (APVA, 2008)

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ATRAA 2008

Australia Compared to Other KeyPV Markets (PVPS, 2008)

ATRAA 2008

Annual Installations in Key PVCountries (PVPS, 2008)

2007 Total: 2.8 GW2012 Forecasts: 6-16 GW

ATRAA 2008

Annual Australian PV Installations(APVA, 2008)

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Australian PV

Association

Key Australian Support Programs

Photo: Ergon, Lingara

ATRAA 2008

PV Installations and Contributions2007/08

• Installations– PVRP ~18MW

– RRPGP ~ 8MW

• GreenPower (NGAP, 2008)

– 49 systems

– 3070 MWh

• MRET (ORER, 2008)

– 32 accredited stations

– 8402 RECs

Photo: Simon Troman

ATRAA 2008

Evolution of the PV Rebate(Solar Homes & Communities)

• Commenced in 2000 and currently funding likely tobe used by 2009

• Rebates on PV capital costs for householders orcommunity building owners

• Householder rebate $5.50 then $4 now $8/Wp.• Community buildings 50% rebate capped at 2 kWp• Schools now separtely funded• > 13,000 systems and > 18 MWp of PV (73% grid

connected) have been installed and rebates of over$100M provided

ATRAA 2008

Solar Homes & Communities Statistics(AGO, 2008)

Watts Installed by Month

to April 2008

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ATRAA 2008

Renewable Remote PowerGeneration Programme (RRPGP)

• Commenced in 2000 with $205M over 10 years for REreplacing diesel in RAPS, public generators & mini-grids

• Extended by $123M in 2006, reduced by $42M in 2008

• Currently funded to 2011 (~$120M remaining)

• To end 2007: 8.37MW PV

• Grants up to 50% of the capital value of RE components

• Some administered & topped up by States and Territories

• Sub-programmes:– Bushlight - for small remote aboriginal community RE systems in, plus

training and awareness

– RESLab - RE systems test centre, Murdoch Uni, Perth.

– PV Water Pumping

– Major projects (>$200,000)

13

Remote PowerStations

Solar System’s 220 kWpconcentrator system(Pitjantjatjara, SA)

Bushlight EnergyManagement Unit

ATRAA 2008

Bushlight Home Systems

ATRAA 2008

Solar Cities• $93.8M over 5 years to demonstrate high

penetration uptake of solar technologies, energyefficiency, smart metering

• aimed at improving the market for distributedgeneration and demand side energy solutions

• Adelaide, Townsville, Blacktown, Alice Springs,Central Victoria, Perth and Coburg– Solar Cities consortia are working with industry, businesses

and their local communities to rethink the way theyproduce and use energy

– valuable information and lessons to inform future energyand greenhouse policies

– Household and some larger commercial and public PVsystems, with grants, special loans and feed-in tariff inAlice Springs

ATRAA 2008

The Low Emissions Technology andAbatement (LETA) Fund

• $26.9M to reduce greenhouse gas emissions overthe longer term

• For identification and implementation of costeffective abatement opportunities and the uptakeof small scale low emission technologies inbusiness, industry and local communities.

• Support for renewables via an industrydevelopment sub-programme available to Stateand Territory Government agencies andrenewable energy industry associations

ATRAA 2008

National Solar Schools Program(Ref: Aust Gov Dept of Climate Change, 2008)

• Schools programs originally at State level and withPVRP funding

• New Program: $489 million - all schools eligible

• grants up to $50,000 to install min 2 kW PV– 20MW (2.5MW per year for 8 years?) and:

– lighting upgrades

– sky lights

– shade awnings

– solar hot water systems

– rainwater tanks

ATRAA 2008ABARE, 2008

MRET32 accredited solar stations 8402 RECs to date

Australian PV

Association

Cost and Price Trends

Greenpeace, 2006

ATRAA 2008

2007 Module and Grid System Prices(PVPS, 2008)

ATRAA 2008

2007 and Projected 2010 Module Costs(Photon, 2008)

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ATRAA 2008

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PV module and system prices in selected PVPS countries (PVPS, 2007)

ATRAA 2008

Module price trends - not corrected for inflation

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ATRAA 2008

PV Electricity Costs (Photon, 2008)

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Australian PV

Association

An Australian Feed-in Tariff?

Photo: Energy Australia, Kogarah

Photo: STI, Melb Uni

ATRAA 2008

Feed-in Tariff (FiT) Principles• Electricity buy-back rate which provides payback within the life of the

system / scheme

• First used in California in the 1970s (PURPA) and then Austrian localgovernment in 1980s (rate based incentives)

• Enhanced tariff is mandated and paid for via a levy on electricity sales(sometimes from Government budgets)

• Can be paid on total generation, generation net of customer usage, up to aset limit, time of generation etc

• Tariff for the year of installation is guaranteed for a set period, typically 15to 20 years, but can be as low as 5 years

• Can attract huge investment in renewables if appropriately structured

• Now available in 37 countries and various States

ATRAA 2008

German PV market growth(EPIA, 2005)

ATRAA 2008

FiT Issues• Too high a Tariff (as for grants!)

– creates high demand

– increases prices if supply constrained

– restricts uptake in non-subsidised markets

– pressure to use unskilled labour

– pressure to use uncertified products

– leaves industry vulnerable to change

• Net export– Need large systems / small loads / minimum day load

• Could exacerbate evening peak

– Difficult to calculate cost effectiveness

• MW Caps or short timeframe– Boom and bust cycle

ATRAA 2008

Australian FiTs

• ACT – 3.88X tariff, 10 years, 10 kW

• SA - 44 c/kWh net export , 2028

• Qld – 44 c/kWh net export(10 years, 8MW or 2028)

• Vic - 60 c/kWh net export, 2 kW, 15 years

• Energy Australia - 28 c/kWh(net export, 2-8pm)

• Alice Springs Solar City – 45 c/kWh grossgeneration, 10 years, limit of $5 per day

ATRAA 2008

Implementation Issues for anAustralia FiT

• Likely public take-up?– Green interest, local self reliance, disposable income,

age profile– Depends on FiT structure and PV rebates– $4 PVRP ~ 28 c/kWh FiT (above retail price) => steady

uptake– $8 PVRP ~ 48 c/kWh => rapid uptake

• Utility response - OK with small penetrations,more issues once PV starts to be noticeable

• Gross FiT not compatible with net metering need for electronic or 2nd meter

• Net FiT – unknown earnings projections

ATRAA 2008

PV export vs system size and load(APVA & CEEM, 2007)

ATRAA 2008

FiT income vs system size fordifferent types of FiTs

(APVA & CEEM, 2007)

ATRAA 2008

Electricity Price Development Curves for PV and Residential Mains Tariff

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$4 PVRP

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Electricity and PV Price Trends

ATRAA 2008

The preferred FiT Model

• Nationally consistent FiT above electricity tariff• Initial starting tariff should aim to repay capital cost over a

FiT time period of 15-20 years• Tariff should decrease by 5-10% each year

– Eg. start at 50 c/kWh above retail tariff (~66 c) and decreases at10%pa => zero within 10 years and hence has a defined end date

• FiT cost should be covered by customer levy, rather thangovernment budget

• All customer sectors should be eligible (but may excludelarge industry)

• Levy should be spread across all customer types (butcould avoid the more sensitive large industry sector)

• No cap• Payment on total generation

Australian PV

AssociationPV Opportunities for Australia

Photo: BP Solar Greenbridge

ATRAA 2008

Current and Projected Energy Usein Australia (ABARE 2007)

ATRAA 2008

Clean Edge 2006

ATRAA 2008

PV support frameworks

• Renewable portfolio standards• Direct capital subsidies• Green electricity schemes• Enhanced feed-in tariffs• Manufacturing incentives• Government procurement• Tax Credits• Building regulations

plus emerging mechanisms…Preferential home mortgage termsGreen loans from commercial banksShare offerings in private PV investment funds

ATRAA 2008

Silicon feedstock

Wafers & ingots

Cells

Modules

PV power systemsBOS components

Thin filmprocesses

Financing & project

development

Investmentsin, and

equipment for,manufacturing

PV supply chain – can Australiaextend its scope?

ATRAA 2008University of NSW

Launch 12 August

ATRAA 2008

References• ABARE, 2007: Syed, A., Wilson, R., Sandu, S., Cuevas-Cubria, C. and Clarke, A., Australian

Energy: National and State Projections to 2029-30, ABARE Research Report 07.24, Departmentof Resources, Energy and Tourism, Canberra, December

• ABARE, 2008, Energy in Australia 2008, Dept of Resources, Energy & Tourism, Comm of Aust.,abare.gov.au.

• Australian Government Department of Climate Change, 2008, Climate Change BudgetOverview 2008-09, May 2008.

• Australian Greenhouse Office, 2008,http://www.environment.gov.au/settlements/renewable/pv/index.html#statistics

• Australian PV Association, 2008, PV in Australia 2007.• Australian PVPS Consortium and CEEM, 2007, Submission to the SA Government Discussion

Paper on South Australia’s Feed-in Mechanism for Residential Small-Scale Solar PhotovoltaicInstallations.

• Clean Edge, 2006, Clean Energy Trends 2006, www.cleanedge.com• EPIA, 2005, Position Paper on Feed-in Tariffs for PV Solar Electricity• Greenpeace & EPIA, 2006, Solar Generation; Solar Electricity for over 1 Billion People and 2

million jobs by 2020• National GreenPower Accreditation Program (NGAP), 2008, Quarterly Status Report, 1

October to 31 December 2007, www.greenpower.gov.au• ORER, 2008, Increasing Australia’s Renewable Energy Generation, Annual Report 2007.• Photon International, 2008, Refining Benchmarks and Forecasts, Issue 1/2008, pp. 84-94• PVPS, 2008, Trends in Photovoltaic Applications 1992-2007, Draft Report.