The commercial solar boom has begun and it’s up to design and install companies to do the right thing, writes Huon Hoogesteger.
Even in a boom – and we are definitely in a boom as was apparent at All-Energy in October – commercial solar is ultimately about telling a story, and telling that story begins with listening to someone else’s. You need to understand a customer’s energy story before you can suggest an alternative.
Why do they have a power spike in the afternoon? Could their operations start at 8am instead of 6am (when the sun isn’t up)? What have they been trying to achieve with energy? Quite often, people don’t even know their own story.
Only once you dig into a client’s data and bills can you can tell them with a true understanding about the best way to improve their energy future with solar.
One part of the commercial solar story is quality, but the industry has long been plagued by operators who sacrifice quality for cost. Quality in solar generation is critical and comes at a cost. It’s vital that clients understand that. In terms of conveying this value, we usually use something everyone can relate to: a car. Are you going to buy a rugged all-rounder or are you going to by the cheapest run-around available? Depends on what you need. Australia is a harsh environment, with a range of temperatures and conditions. Solar needs to be tough and built to last. It needs to be designed to deliver long-term benefit. In short, you need a rugged all-rounder.
If you’re not willing to negotiate on quality, the conversation and the outcome changes in a good way. Your customer only negotiates on quality if you do and they are misled into thinking it’s an option.
Let me give you an example from real life. We were bidding on a big job and they pushed us on price. Since we would rather lose margin than install something of low quality, we lost margin. In the long run, low quality will cost us money. Tell me of any other product that has a 25-year warranty. Solar does, because solar is a long-term play.
Storage edges closer
A lot of people are talking about storage because everyone knows it will ultimately change everything. That said, storage is on its way to viability, but it’s not there yet. It’s still too expensive and reminds me of solar in the early days. We all know it’s good. We all want it, but it’s not quite financially viable. What is financial viability? Financial viability is when you can finance it and it’s still cash positive. That’s where commercial solar is right now.
Still, batteries are the key to our future, so we need to talk about and plan for them. There are natural limitations to how much solar we can install without storage. Moving beyond the financial challenge of installing storage today, there are some key technological difficulties we will need to overcome. Things like small-scale, unbalanced three-phase hybrid inverters will be important because most SME’s require three-phase. People are talking about buy-and-sell arrangements using batteries to create virtual networks, but there are legal and regulatory hurdles. The grid is still trying to figure itself, let alone figure out how to manage a new arrangement between micro-producers and users. The Uber of the virtual battery grid has not yet arrived.
More immediately, we need to look at smarter loads. If the aluminium smelters that represent 10% of NSW energy shut down, it takes them a long time to turn back on, whereas there are other more dispatchable loads that can stabilise the market. There is a huge knock-on effect when smelters turn off during times of high demand. To break this down into a more relatable story, about 30% of your home energy bill can be reduced by very unobtrusive energy change. A little more diligence will save you a lot of money and the same can be said when you apply this approach to the national energy market.
The commercial solar energy market has doubled in the past year, from 750MW to 1.5GW. A huge move. How are we as a company keeping up with demand? Barely. The number of grid-connect applications for larger scale solar has increased seven times. We’ve been waiting for the market to come of age, and now it has. The next three years will see an incredible spike in growth and when storage reaches viability we will all be living in a better-powered Australia where energy will be both abundant and cheap.