The perfect storm – dynamic factors in solar
As of July 2017, Australia had over 6,216MW of installed photovoltaic (PV) solar power, of which 814MW were installed in the preceding 12 months.
Award-winning commercial solar installer, Todae Solar, has been a significant conduit in this, boasting an 80% increase in the last 12 months. The company has the most experience of multi-site tenders in the country and has rolled out more than 50MW of installation across various industries and companies of all sizes since its inception in 2003.
“In the last three months alone, we’ve been responding to numerous multi-site tenders,” says Todae Solar’s Head of Marketing and Strategic Initiatives, Landon Kahn. “They’re from tier one organisations, with three to 10 sites and between 5-9MW.
“It’s the perfect storm for organisations to really look at solar on a larger scale.”
The company was formed in 2003 when CEO Danin Kahn acquired a smaller sustainability company. With a strong ethos to sustainability and delivering innovative solutions, the company has grown from a team of three to over 75.
Some of Todae Solar’s multi-site projects span healthcare, social assistance, aged care, agriculture, manufacturing and retail – including a mammoth installation for aged care provider Aegis Care, with 3.2MW installed across 26 sites.
The solar giant has also rolled out 2.6MW for Aldi Stores, 2.8MW across 16 sites for St Vincent's Health and almost 2MW across two sites for Australian Vintage.
Todae Solar has carried out thousands of installations across the country and Kahn says with the increase of energy costs, plus the decrease in solar costs, it’s a no-brainer for businesses with numerous locations to get in on the action.
“The Australian market is growing significantly,” he says, “and the main reason why large organisations are choosing multi-site projects is because of that cost reduction.
"Solar components have come down so dramatically – 90% in the last 10 years – so there’s been a whole shift in thinking from organisations, from saying ‘we'll do one site and see how solar goes’, to ‘what is going to be the best return for the organisation? Let’s do 20 sites?'"
The first commercial solar system Todae Solar installed in 2006 was at AU$12 ($9.19) per watt and now, depending on the path of installation, area etc, it's anywhere between AU$1.30-AU$1.60 ($1.00-$1.23) for a roof mount installation.
“Because these costs have come down so considerably, basically what you're finding is soft costs,” Khan adds. “So: installation, engineering, project management. Those costs are now taking up a greater portion of the total overall project value.
“And when you can leverage those costs across a portfolio, you're able to bring them down, and therefore get those economies of scale. That makes a very big difference, and that's why the companies are looking at multi-site roll-outs, because it's just getting a better bang for their buck.”
Khan says businesses now investigate the levelised cost of electricity (LCOE) over 20 years, which is how the actual cost per KW/hour of electricity is delivered, and how the larger, sophisticated, international markets like the USA, UK and Europe look at solar.
Australian organisations are now following suit because it gives a more sophisticated understanding of what the actual costs are going to be, and compares them to the current and future costs.
Of course, with all these major shifts, for companies to go down the multi-site route they need ‘safe hands’, and Kahn says that’s where Todae Solar differentiates itself.
“Multi-sites can be particularly difficult because you might have installations in Western Australia, Queensland, New South Wales, Victoria,” he explains. “All of them have different costs associated, different requirements, and you've got to manage installations concurrently. So, you need a lot of experience and capability.
“But we’re more advanced than the majority of the market, and that's our point of difference.”
He claims another growing trend is storage, and cost in the last 12 months is coming down as much as 60% percent for certain manufacturers, which means that within the next 18 months to two years, business cases for storage will completely change.
“It will be much more viable,” he adds, “and that will see solar shift again, because you'll be able to look at certain things that solar couldn't do before, like in terms of things affecting network charges, which was traditionally very difficult to forecast what that would look like.
“We envisage a progression to small scale behind the metre ‘utility projects.’ We’re already talking with organisations about aggregated systems between five to 20MW systems. This will become more common (as we’ve seen internationally) as organisations max out the capacity of their property portfolio and still have significant energy usage remaining. So, we’ll see a shift towards (potentially aggregated) small-scale utility projects to cover the rest of their usage.”
Because Todae Solar is enjoying a major growth phase, and is set to see it continuing over the next few years, it can throw up resourcing challenges, and sometimes be a gap in the skill sets. Todae Solar has addressed these challenges by encouraging staff development up-skilling employees and potential hires from other industries in a similar curve.
“We have had internal staff that when they first started working with us, were working on the smaller projects, so 30KW, 100KW,” he says, “and we've worked at developing their expertise and skills.
“Now, they’re project managers and engineers, with experience in delivering megawatt scale projects across the country, and we’ve ensured they're able to now deliver those projects effectively.”
The business has won more Clean Energy Council (CEC) Awards for Best Design and Installation than any other installer and has been awarded Largest Commercial Installer nationally for the last two years.
While Todae Solar prides itself on having “the biggest and best client portfolio in the country,” Khan says it’s rewarding to still be acknowledged by the industry body for the quality of the work.
“It shows testament that we are leading the industry,” he says. “Solar systems are meant to last 25 years, but a lot of companies said, ‘well, we're just going to sell solar as cheap as possible and we'll reach scale and then we'll be okay’.
“But because of the solar coaster, that just wasn't a realistic possibility. It's about getting the best solution and the quality solution, and being recognised and awarded for that, for us, really exemplifies that it’s important to focus on quality, and ensure that you are providing that to clients.”
While many commercial solar companies have failed in the last few years, Kahn says that this quality, and investment in staff, are the reasons Todae Solar has outlasted many rivals.
“We've always ensured that we want to give the best value to our clients, but we also want to be a sustainable business and grow organically,” he reveals. “In the last 12 months, we've more than doubled in terms of size, maybe an 80% increase, and I can see it more than doubling again.”