Mackay Solar Tender (Council): $2.1m from Akcome

Mackay Council have decided which company to go with after putting out a solar tender last year. The Mackay solar project will be built by a Brisbane-based company – Akcome Power – who offered a significantly lower price than their competitors. 

The Mackay Solar Tender Overview.

We wrote about the initial tender process last year – the initial pool of EOI respondents was 16 companies, which ended up being whittled down to four.

Akcome Power Pty Ltd won the tender with a price significantly lower than the other three remaining respondents. Personally I’d be a bit wary of such a major discrepancy between quotes, so let’s dig a little deeper. Akcome’s proposal involves the usage of Huawei and ABB inverters – with 10 year warranties – and ‘unspecified’ solar panels with 30-year warranties.

Nevertheless, consultancy Peak Services reviewed the proposal and Akcome as a company and came away satisfied. Have Mackay Council got a fantastic deal or will they end up paying the prices for not paying the price and end up with a system where performance doesn’t meet expectations or quality issues abound? Time will tell. There are certainly plenty of perturbed solar companies in North Queensland right now.

According to the council, the final price will be offset by a little over half a million in STCs (small-scale renewable energy certificates). This, in conjunction with other ‘council and contingency costs’, will bring the final price to around $1.97 million.

“Council, like households, has been hard hit by rising electricity prices,’’ Mackay Mayor Greg Williamson said in a statement last Friday, according to One Step Off The Grid.

“This fairly modest initial outlay is an investment in the future which will provide ongoing cost savings.”

Mackay Solar Council Tender
Mackay Solar Council Tender (source: mackay.qld.gov.au)

This will be a great thing for solar jobs in Mackay – the 21 council facilities will require plenty of help getting the solar installed – and it seems like the majority of it will be going to local installers:

“Akcome has advised it will engage local Clean Energy Council of Australia-accredited electricians, as well as local non-accredited experienced electricians to work with them, plus local trades assistants,” Mackay Mayor Greg Williamson said.

“They expect to use 60 to 70 per cent Mackay-area based tradespeople to complete the installation.”

You can read the minutes of the Mackay council meeting where they decided which company to use by clicking here

 

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Australian solar installs new record in November

Australian solar installs reached an all-time high of 120MW in November, eclipsing the 100MW in October and the record of 110MW set in June 2012, which was ‘artificially’ (for want of a better word) inflated as it was the last month before Queensland cut off the $0.44c premium feed-in tariff. These are massive numbers when compared with the previous few years and a fantastic indicator for the future of renewable energy in Australia. 

Australian Solar Installs in 2017

According to RenewEconomy and The Green Energy Markets’ Renewable Energy Index, for most months in 2016 solar installs were below 60MW and January 2016 had a measly install amount of 45MW. The reason for the big drop in numbers was due to the end of the premium feed-in tariffs and also the federal government’s substantial cutback of the amount of STC rebate certificates it provided. This means the cost of solar (and payback period) increased substantially, dropping the number of installs and casting doubt upon the industry as a whole.

Over the past 12-18 months, however, there’s been a perfect storm of the gigantic rise in the cost of wholesale electricity, better quality and price of solar panels and storage due to technology advances, and excitement about renewable energy have helped raise the numbers of solar uptake. Public perception and interest in the technology due to such projects as the massive Tesla battery in South Australia, German company sonnen’s ‘free power’ offering via sonnenFlat, and the Powerwall 2 battery have all led to Australia’s domestic and commercial solar uptake reaching this all-time high.

Australian Solar Installs 2017 - sonnen's sonnenFlat and sonnenBatterie
Australian Solar Installs 2017 – sonnen’s sonnenFlat and sonnenBatterie (source: sonnen.com.au)

The Renewable Energy Index for October 2017 showed that Queensland leads the way for Australia, with jobs coming via renewable energy projects (both large-scale and rooftop solar) almost doubling over four months from 3,634 at the end of 30 June 2017, to 7,194 in October.

 Amazing news for solar contractors and solar installers – although things may slow down a little over the Christmas period we can’t wait to see what 2018 brings to solar power in Australia. 

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Non-compliant solar panels from Euro Solar

Australia’s biggest seller of solar panels, Euro Solar, have been identified by the Clean Energy Regulator for installing non-compliant solar panels and claiming STCs from them. To qualify for the STC system, the panels need to be approved and validated by the Clean Energy Council – and these hadn’t.

About the Non-Compliant Solar Panels

An investigation by the Clean Energy Regulator (CER) found that Euro Solar claimed STCs (small-scale technology certificates) for 10 different rooftop PV solar installs despite using non-compliant panels. According to RenewEconomy, this was 1,058 STCs with a value of approximately $40,000. They’ve been asked to surrender the claimed STCs or replace the offending modules.

The next step, according to the CER website, is for P&N to validate serial numbers on solar modules for 78 installations within the next 12 months, and an additional 100 installations within 18 months. The relevant installations have already been flagged by the CER.

You can read more about the CER’s ‘current enforceable undertakings’ by clicking this link.

Clean Energy Regulator - Non-Compliant Solar Panels
Clean Energy Regulator goes after non-compliant solar panels (source: cleanenergyregulator.gov.au)

Euro Solar’s previous problems

A ‘winding-up’ order was issued to Euro Solar’s parent company, “P & N NSW Pty Ltd” back in June – which was dismissed by Euro Solar as a “miscommunication”, according to One Step Off The Grid. Euro Solar’s claims appeared to be substantiated and they also produced a notice for their website indicating that they “remain focussed and committed to provide our customers with a high level of service and at a cost-effective price.” A post about the situation has been deleted from Renew Economy’s website as well, so it appears this was an erroneously sent ‘winding-up order’.

This comes on the back of Euro Solar being fined $145,000 in 2014 for making false and misleading representations, namely that their Chinese made solar panels were Australian, and also for publishing fake video testimonials on Youtube and fake written testimonials on its website.

You can click here to view the press release from the Federal Court.

The fake testimonials and misleading representations about their solar panels were made online, in newspapers and on TV between November 2012 and September 2013. According to the court ruling, they were brought to the ACCC’s attention by competing businesses – for example Solar Choice published an article about the fine in January 2014 where they advised they wrote to a consumer advocate organisation about Euro Solar’s advertising.

It’s good to see the industry self-regulating like this, when misleading information can harm solar energy and the Australian solar power industry as a whole.  However, if something does happen to Euro Solar, what will become of warranties and repair? This goes to show it can be worth paying a few extra dollars to invest in quality panels from a reputable installer – the recent sharp drop in small scale renewable energy certificates has left a lot of installers who are on wafer thin margins out in the cold (or awfully close). Solar panels are a long term investment – make sure you do your due diligence before committing to a certain installer or brand!

 

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Small scale renewable energy certificates

A sharp drop in the price of small scale renewable energy certificates (STCs) has led to a sudden and (for many) unexpected rise in the cost of household solar installations – which is estimated to be approximately 10%. This will have major ramifications for installers as well.

Small scale renewable energy certificates
Small scale renewable energy certificates price history (source: greenmarkets.com.au)

STC Prices – How and Why?

According to Greenmarkets.com.au, STCs trade on the wholesale market at minimum parcels of 5,000. As per the above image, their website shows the last 6 months of STC movement – it’s actually been stable for a couple of years before that as well. According to Tristan Edis via Renew Economy , this month the “supply of STCs is substantially outstripping power retailers’ obligations for this year as set by the Clean Energy Regulator”. Edis noted on Twitter this morning that he was incorrectly quoted in a section of that article – and that the Q4 forward prices for STCs are $30.50, not $37.85. This projects more pain to come for the industry (at their lowest on Wednesday the STCs were at $26). Edis said that this is as a result of the Clean Energy Regulator underestimating the amount of STCs that would come on the market this year – so they’ll need to account for that when setting 2018’s target in order to try and stabilise the cost and keep it around $40. The short term effect is a ~10% rise in the cost of installations, which will slow down installers and also could affect current install contracts they have.

Small scale renewable energy certificates – how will this affect the market?

The drop in STC price will have a significant effect on installers at the lower end of the market – many installs are quoted nett of STCs i.e. leaving the risk of STC price fluctuation in the hands of the installer.

The price of an STC refers to a rebate (per kW) of an installed solar system – calculating a drop from $40 to $32 means the price for a 5kW system will increase by around $600 (it varies from state to state). It’ll also mean any installers who have quoted nett of STC will be out of pocket by a similar amount – so any installers who have a lot of current installs on the books and a cash flow problem could find themselves in serious trouble over these drops.

It also means the end user will be paying ~10% more for their solar installs for the rest of 2017 – assuming projections from the forward market hold up. We’ll see how this impacts Australian solar power as a whole over the coming months.

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