Storage is a major theme at All Energy Australian 2017 this week, and one of the key participants was Huon Hoogesteger from Smart Commercial Solar, the firm’s founder. Huon answered some questions from EBN in this Q&A about energy storage trends and making the smart grid a success.
There would seem to be a new wave building of larger scale solar installation. Where do you think this market is at and how do you assess its potential?
We really are witnessing an energy revolution and it’s amazing to me that this isn’t front page news every day. Even long-time industry experts have been taken by surprise by the drop in solar prices, and large-scale solar installation has massive potential. Solar business cases are now 50 to 100 per cent stronger than they were just 12 months ago. The typical business case for ROI is now around 3 years which puts it well within the range for most businesses. Not only that, many solar projects are now cash flow positive from day one, meaning that even after loan repayments are taken into account, a business will spend less from the start. Let’s think about that for a second: solar is now so cheap that it is cheaper to borrow money to install solar than it is to continue to pay electricity bills from conventional power. The disruption these economics will have is only just beginning to be felt.
What are the drivers for corporates to invest in their own solar installations?
Bill shock. For the first time corporates have realised that energy, one of their key overheads, is a threat completely outside of their control. The driver for most corporates is the gap between what they have to pay for conventional power and how much less they will pay if they install solar. We’ve seen companies in long-term energy contracts watch as these contracts expire and they face 50 per cent or more increases in their power bills —in some cases, they are literally looking at energy bills that could be business killers. Bill shock is going to last for a very long time, it is not going away. Solar is the obvious solution to this problem. Beyond economics, what we are seeing is the economics align with the sustainability goals and that’s great to see.
How much of a game changer is storage?
Storage will be a game changer, no doubt. But the economics and all the innovation around storage hasn’t been worked out yet. The economics of storage is a lot more complex than solar, and a lot has to change for storage to be viable. It isn’t an easy solution now, but it will be when the legal infrastructure changes. But right now we are focusing on the incredible affordability of solar generally. Obviously, down the track when that is coupled with viable storage solutions you are looking at the strong possibility that Australia could become 100 per cent renewable. If you had asked me only two years ago if that was even possible, I would have said no; but today it’s becoming a real possibility.
How many projects are you working with now and can you tell us about two of the most exciting?
One of our most exciting projects I can’t announce yet, but it involves a large corporate who is transforming the way they consider energy —it will be one of the biggest renewable stories of the year when it’s off and running.
Another one is our recent work with Hunter Pacific, a large American firm, who are working with us on an 800kw rooftop project which is economically viable with SunPower panels, which anyone in the industry will realise is pretty remarkable.
There’s also a third development worth talking about. Every week I’m being called by people who want to build solar farms. This is an extraordinary development. These are people who have no background in the energy industry who are absolutely convinced in the business opportunity in solar and they want to be a part of it.