C&I Roof-top Solar vs Utility-Scale Solar Farms Which delivers the better value for Australian businesses?

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Anne Webb
5 years ago
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1 C&I Roof-top Solar Utility-Scale Solar Farms Which delivers the better value for Australian businesses? Presented by Oliver Hartley Managing Director Australian Clean Energy Summit Sydney, 18 th July 2017

2 What is this about? o Corporate electricity buyers are taking action to manage their electricity beyond the traditional 1-3 year procurement cycle. o Companies are increasingly utilising commercial roof-top solar. o Sophisticated buyers also evaluate Corporate Power Purchase Agreements (PPA) to procure solar power directly from centralised solar farms. o Corporate PPAs from solar farms promise lower electricity prices due to economies of scale. o Large corporations can leverage their bankability to be offered low prices. We ll explore the pros and cons of commercial roof-top utility scale centralised solar farms. 2

3 Integrated Commercial Solar Solutions Provider Epho Commercial Solar Feasibility / Design / Construction turn key Epho Services Operation / Maintenance / Monitoring Epho Asset Management Own / Operate / Solar Power Supply For example: commercial solar systems on Aldi Stores. For example: Management of CBA solar systems across Australia 3

4 Solar Farm background Global Backing Local Experience 4

Bundled PPA prices well below power + LGC prices NEM Pricing LGC pricing PPAs

estimates according to Mercari http://lgc.mercari.com.

5 Bundled PPA prices well below power + LGC prices NEM Pricing LGC pricing PPAs NEM wholesale prices have increased significantly across all states. /National-Electricity-Market- NEM/Data-dashboard LGC price estimates according to Mercari (accessed on 26/06/2017) Source: Sophie Vorrath & Giles Parkinson 5

6 Commercial Roof-top Centralised Solar Farms Commercial Roof-top Centralised Solar Farm Installation Costs O&M costs Output Output profile Complexity Business Structure Up-side $ / Wp $ / MWp kwh / kwp Power matching Development cost & time Players involved New technology development 6

7 Installation Costs Installation Costs $/Wp: Commercial roof-top solar systems (0.5 3 MW) are likely to have lower installation costs compared to solar farms: no civil works no foundations no security fencing lower mobilisation costs Installation costs vary, but, generally, large roof-top installation costs should be lower in the order of 5-20% compared to centralised solar farms. 7

8 Operation and Maintenance Operation and Maintenance Costs $/MWp installed: Centralised Solar Farms require Security Ground maintenance Potentially higher labour costs O&M Costs of commercial solar systems are substantially lower, by up to % 8

9 Output Output kwh / kwh: Solar Farms achieve higher output, because.. large commercial roof-tops are often installed near urban centres (e.g. large distribution centres, warehouses, manufacturing sites etc.) roofs don t always have ideal orientation for solar systems most solar farms use single-axis tracking Well-designed solar farms with single-axis tracking in good solar locations achieve 20-40% more yield compared to large roof-top, commercial solar systems in urban areas. 9

10 Output Profile The generation profile of centralised solar farms with single-axis tracking have a broad shape compared to fixed-tilt roof-top systems. Roof-top systems can partially compensate with east/west orientated system configuration, but can t capture early morning or late afternoon sunlight in cost-optimised systems. Single-axis tracked solar farm generation profile Fixed tilt systems roof-top generation profile 10

11 Project Complexity Solar farms require a number of studies and approvals Hydrology study Geotechnical study Study of Environmental Effects Heritage study Development approval Grid connection etc. Commercial roof-top systems require a suitable building Structural study Development approval Grid connection 11

12 Business Structure who takes what risk Commercial Roof-Top: Three party agreement: Solar Provider & Power User & Landlord Solar Power Provider (Solar System Owner) Power User (Building Occupant) Landlord (Building Owner) Corporate PPA with Centralised Solar Farm: Many stakeholders involved Solar Farm Owner (Plant operator) Corporate user with many sites (Power user) Electricity retailer (manage unders and overs mismatch) Network Service Provider (network availability, Marginal Loss Factor) Many more (AEMO etc.) 12

Up-side Commercial roof-top have interesting

consumption 4 MW full utilisation of roof

site 0% E-Vehicles Battery storage Smarter

13 Up-side Commercial roof-top have interesting up-side potential 100 kw likely system size due to short-term term of lease 300 kw optimal size for behind-the meter consumption 4 MW full utilisation of roof potential 100% Share of Solar power used on site 0% E-Vehicles Battery storage Smarter controls of consumption Initial off-set of on-site power time 13

14 Summary: Why my analysis is flawed Not all aspects have equal weighting. What matters is $/kwh Who carries what risk Terms of arrangements There is no clear favourite between roof-top commercial solar power systems and solar farm corporate PPAS Circumstances will vary from project to project and company to company Large corporations are likely to utilise a mixture of both solar solutions 14

15 Commercial Solar Solutions Oliver Hartley Managing Director

Commercial Solar the next big wave in the PV industry? SPREE Seminar, UNSW Thursday 1st May 2014

Commercial Solar the next big wave in the PV industry? SPREE Seminar, UNSW Thursday 1st May 2014 SPREE Seminar, UNSW 1 May 2014, page 1 The questions that will be answered i. Who is epho Pty Ltd? ii. What