A New Lease of life for solar ?  

Giles Parkinson at The Climate Spectator has a look at Lend Lease's interest in rolling out large scale solar PV power generation across the rooftops of commercial buildings - New Lease of life for solar.

The push by construction and property giant Lend Lease into the solar energy business could be one of the most significant interventions to date in Australia’s nascent renewable energy market.

The move is based on a couple of simple premises. The most important of these is the belief that, within a few years, solar photovoltaic technology will match, and then displace, wind energy as the most cost-effective and efficient renewable energy source in Australia.

If that comes to pass, it could turn most forecasts for the build-out of renewable technology in this country on their head, and Lend Lease will be in a position to become a dominant player in what will rapidly become a multi-billion dollar a year solar PV market.

Lend Lease has been quietly working on its plans for the past 12 months, ever since it signed a deal with the world’s biggest solar PV maker, the US-based First Solar, to install 10MW of its panels on the roof-tops of its commercial building portfolio.

The two companies found that there was a meeting of minds, culture and ambition, and Lend Lease has now signed a deal to become the local partner for the distribution and installation of First Solar’s thin-film solar panels, whose modules are scalable from roof-top solar to commercial and industrial scale installations, and to large scale utilities.

Lend Lease, of course, has capabilities across all three markets; from its Delfin home business, to its large commercial and industrial property portfolio, and its construction business, where it has already been involved in two large-scale utility proposals that have been shortlisted for the federal government’s Solar Flagships program – one with AGL and First Solar and the other with TruEnergy and First Solar.

For good measure, Lend Lease has decided to take a completely new business approach to the solar PV market and, rather than focus on direct selling like the current incumbents, it has signed an alliance with a yet-to-be-named major bank and an energy utility (one would presume AGL or TruEnergy) to tap into their multi-million customer bases to market and distribute the product. It has also struck an alliance with the Norwegian firm REC, which will provide silicon-based solar panels.

Lend Lease notes that, even with the rapid boost in the solar PV market in the last 18 months aided by the proliferation of state-based feed-in tariffs, less than 3 per cent of Australian householders will have rooftop solar by the end of the year. The market is ripe for the picking.

“This will be a step change in the domestic market,” says Chris Carolan, the head of Lend Lease Solar, who was the project director for Australia’s first 5 star CBD building, The Bond, the company’s headquarters. “No one saw Bond coming, no one knew what green star was,” he says. “We want to make the same impact with solar PV.”

Carolan expects the “tipping point” of the solar PV market in Australia will occur at around 2014. That will follow three years of anticipated and consecutive 20 per cent rises in local energy costs (mostly to fund grid upgrades) and declining costs in solar. First Solar is already the market leader in costs, has forecast a 20 per cent reduction in costs per year for the foreseeable future and has achieved a 6 per cent fall in the last quarter alone.

The economics of the venture will be boosted by the Brumby government’s large-scale solar target of 5 per cent by 2020, and the country’s first large-scale feed-in-tariff, an initiative Carolan expects will soon be followed by other state governments.

The 5 per cent Victorian target alone equates to around 2000MW of solar by 2020. Given that it will take a few years to roll out the first projects, that equates to a billion-dollar industry in Victoria alone.