In June 2015 we've just seen the national average Australian solar PV system size hit 5kW! This is the highest we have ever seen and is a new landmark for solar PV development in Australia.
Something unusual recently happened in the LGC market. While the solar industry was suffering through a terrible May, the LGC market came alive. Now, most LGC trading typically happens in January and February as Liable Entities prepare for the annual surrender of LGCs, and there is far lower volumes of trading outside of those months. The chart below shows an analysis of the REC Registry that depicts the monthly LGC trading volume – Januaries and Februaries have been excluded. You can see the massive spike in May, which was preceded by a noteworthy April and an outstanding March. The only time we’ve seen trading volumes this large before was when liable entities were snapping up cheap LGCs from PV systems before the RET was split into LRET and SRES.
So who is responsible for this return to LGC market liquidity? SunWiz’s RETelligence provides LGC market transparency to subscribers through weekly-updated interactive dashboards that answer questions like:
- How much is each liable entity holding compared to their surrender liability, and how have parties’ holdings evolved over time?
- Who is buying and selling LGCs, how does this compare with typical behavior, and who trades with whom?
- Which liable entities have REC purchase agreements with each power station?
- How is each power station and fuel source performing?
This information allows subscribers to understand the market dynamics in intricate detail, helping inform key decisions, manage risk, and improve upon negotiating positions.
Subscribe to RETelligence from $6000 ex GST per year.
The Australian Solar industry has seen ups and downs, to the point of being described as a Solar Coaster. But now it is confronted by a protracted downturn, the likes of which it hasn’t seen before. To the point where 4 out of 5 months in 2015 have been lower than every month since January 2012. Indeed, May 2015 was the worst May for REC registration since 2010. Overall, volumes are 20% down on last year - 245MW has been registered in the first five months of the year, compared to 310MW the same time last year.
Queensland and South Australia have been hardest hit. Queensland had registered 105MW of installations in the first five months of 2014; this year it sits at 80MW; SA registered 48MW over January-May 2014 but only has 27MW in the same period in 2015.
The declining volume is creating immense pressure in the solar industry. Many of the installing electricians have pulled-back from solar, returning to sales of other electrical equipment, but the marketplace is still over-crowded. Intense competition has driven prices to unsustainable lows, making it difficult to make a profit. Meanwhile fat-walleted electricity retailers who will swallow years of loss-making solar business segments are looking to enter, command, and dominate the market.
Thankfully there are islands of opportunity – where there is commercial PV there is growth. The NSW market is growing because of its focus on commercial PV, even as the residential market there contracts. Queensland on the other hand has been over-reliant on residential PV and is now suffering because of it.
The challenge faced by many is that commercial sales are far more difficult to close than residential sales. One of the main challenges with commercial is that businesses take a lot of time deciding to purchase PV, somany solar companies waste months courting and educating what turns out to be tyre-kickers. Making a profit in commercial PV necessitates a fresh approach, in which pipelines are filled with high quality leads, tyre-kickers are effortlessly filtered out and customer education is an automatic process, so that ample time is available for the customers most likely to buy. Profitable sales demand an innovative focus upon selling a meticulously-calculated financial outcome using best-practice sales materials, meanwhile delivering an excellent sales experience so that you can justify a price that’s higher than your competition. SunWiz’s ProfitVoltaics service electrifies commercial solar profitability, and is 100% necessary for survival.
SunWiz is exhibiting and presenting at Solar 2015 this coming Wednesday and Thursday (13th & 14th May)
Come along and:
- TOMORROW MORNING (Wed May 13th) See Warwick present on Battery Storage Design for Grid-Connect Systems at the SEIA Professional Development Session – 11:15-12:15 on Wednesday 13 May
- Get a sneak preview of the soon-to-be-released PVsell – its undergone an overhaul and now features customizable output that allows you to quickly build your own dazzling proposals from cover letter to contract, with all the graphs in between.
- Get an outstanding PVsell offer, so good we have to tell you in person
- Learn how to radically transform the profitability of your commercial PV sales
- Ask anything you like of the WOracle.
- Learn a trick or two from the top dog in the Solar industry
Our presentation on Battery Storage Design for Grid-Connect Systems will show how a 7.6-year payback is possible with Tesla storage if a 5kW PV system is included.
We are at stand C3, sharing with Solar Analytics. Keep an eye out for Sunny
The National Electricity Market wasn’t designed with distributed generation in mind. Indeed, one major design flaw acts to penalise solar power, and does so more in Australia than occurs in practically every other country in the world. In the USA ‘net metering’ means solar earns the same tariff as retail electricity rate, up until generation exceeds consumption across a billing cycle. In Australia, net metering means if you produce more energy than you consume in a half-hourly period, you’ll receive a pittance for the excess power production. Households may pay 25-35c/kWh for power consumption, but receive between 0-8c/kWh for any excess production in any given half-hour. One would almost guess this is an anti-solar conspiracy.
Without a hint of irony, electricity networks have been claiming that solar owners aren’t paying their way for network use. If all solar production was consumed within the house, then their argument might have some merit. What they conveniently ignore is that the network operators are charging solar exports full-fare for electricity that is only transported next door, which is one reason export buy-back rates are so low. It’s like charging $50 to drive the entire length of a 50km toll road in one direction, while charging $50 to drive only 100m in the other direction. Even as solar is causing less congestion on the network, some operators are saying we won’t take your excess power, which must be the ultimate own-goal from the utility businesses Australians most love to hate.
Australia’s version of net metering is problematic for solar homeowners as most solar production occurs when the home is unoccupied. Homeowners can maximise their daytime self-consumption of solar production by running pool pumps, dishwashers, and washing machines during daylight hours. But the full benefit of doing so is only gained with a house consumption monitor (ideally linked to a weather forecast) that intelligently sequences the whitegoods into operation over the day, and there is a limit to the extent to which householders can shift consumption patterns.
Analysis by SunWiz of 300 solar households . The median 1.5kW system exports 37% of its production, but half o
1.5kW systems export between 28-45% of their power production. We have extended the calculation to larger systems that are more representative of recent installations. Most systems sold these days are 3kW or 5kW – which have median export volumes of 60% and 74% respectively. These exports are far higher than most would guess, and have significant ramifications.
Solar owners need to be careful to size the system appropriately to their load. Analysis of the same extended data set (graphed below) shows that to keep export below 50% of produced solar energy, a 1.5kW system is a wise choice if you consume 10 kWh/day (excluding off-peak hot water). If you consume 15kWh/day, a 2-2.5kW system is likely to keep your export below 50%. You really want to start thinking about a 3kW system when you consume more than 19kWh/day, and the chances are you’ll export more than half of your production from a 5kW system, unless you consume 40kWh/day
Now, export varies considerably depending on a house’s daytime occupancy. Households with people at home during the day will naturally self-consume more of their solar production, and thus export less. This means a quicker payback period, or the ability to opt for a larger system with improved reduction in electricity bill. From extensive analysis, SunWiz has identified five major classes of residential consumption patterns, which are integrated into our PVsell software. These are shown below.
Double hump – typical of families with school-age children
Evening Peak – typical of households without children
High Day, Higher Evenings, Low Overnight – typical of families with infants and pre-school children
Day Focus – typical of retirees and work-from-home households
Night Focus – typical of night-shift workers
The problem is that very few solar salespeople account for the shape of the load profile when recommending a system. Our analysis shows that a 3kW system may export as little as 33% of its energy if there is a high level of daytime occupancy, but could export 85% of its production if there is low daytime consumption. This could mean the difference between a 5 year payback and a 10 year payback, so it is crucial to obtain hour-by-hour calculation of solar export in order to ensure a favourable return on investment. PVsell is produced by SunWiz and ensures accurate calculations that are tailored to the customer ’s needs; we recommend that you demand a PVsell
analysis from your solar salesperson, or obtain independent advice on your Solar ROI.
Our Big PV Wisdom report provides analysis of thousands of results from solar proposals entered into PVsell. It shows that PVsell users are far better at sizing systems suitable to a customer ’s needs. The graph below shows that PVsell users recommend residential systems that export about one-third of their production, and commercial systems than only export 20-25%, producing far better outcomes for their customers. When you combine this with accurate calculations of production which are time-adjusted for panel direction, plus account for tariffs that vary across the day, PVsell can be trusted to accurately calculate the financial return for your investment in residential or commercial solar.
So when the incumbents argue that solar isn’t contributing its fair share to network costs, you can now point out that most new solar systems are paying network fees for well over half of their power generation. Commercial PV systems are exporting less power but they reduce peak demand by a greater amount, providing a network benefit in this regard.