Tindo Solar receives CEFC funding

Tindo Solar, an Australian solar PV company, has received up to $20 million senior debt finance from the Clean Energy Finance Corporation (CEFC). The funding will allow Tindo to locally manufacture, install and own rooftop solar arrays and sell the power to the building occupants under a new power purchase agreement (PPA) program. The program is also funded by the Solaire Income Fund, a Lighthouse Infrastructure and Impact Investment Group joint venture.

Under this program, Tindo will expand access to solar PV in Australia by using a financing mechanism that does not involve an upfront cost for customers. Tindo will be targeting residential customers, small to medium-sized businesses and government bodies.

PPAs will help overcome the existing barriers that have held back take-up of solar power by some individual and commercial customers. By removing the need for significant upfront investment and allowing the benefits to remain with the building occupants when a tenant moves, PPAs will accelerate use of solar power in Australia. 

The CEFC’s partnership with Tindo and the Solaire Income Fund is being undertaken as part of its work with a number of Australian and international financial institutions, solar providers and manufacturers to offer new financing products that will accelerate Australia’s uptake of solar technology.

These new offerings include both PPAs and solar leasing, and represent an important development in solar PV financing in the Australian market. While these financing models are relatively new here, they are well established in overseas markets, according to Tindo Solar.

While there has been widespread take up of solar PV by the residential sector in Australia, with about 1.25 million solar rooftops, there is still considerable untapped potential. Solar PV in the commercial sector has lagged behind the residential sector and represents less than 7% of the solar PV market, says Tindo. This is much lower than in most other advanced economies and the opportunities for commercial sector solar are significant, particularly since most commercial and industrial energy demand is during the day when the maximum solar power is generated.

Over the past four years, interest in commercial solar has increased, however several significant hurdles limit investment by this sector. The main barrier is the upfront cost and the usually long payback period of over five years when many businesses operate with a three to five year payback threshold for their capital investments.

The power purchase agreement model overcomes this challenge as individual and commercial customers do not pay for the significant upfront purchase and installation of the equipment and customers can achieve immediate savings on their energy bills. The power purchase finance model allows commercial customers to focus on their businesses as they do not have to worry about getting solar quotes, deciding on the best system, choosing an installer and maintaining the equipment. Tindo will be using its own panels, manufactured in its South Australian factory, and have these installed by existing skilled and reputable operators.

Tindo PPA customers will be able to view their power usage rates online and adjust their energy usage to take advantage of the cheaper solar power. Customers will also have an option to buy out the panels after five years. Lighthouse Infrastructure and the Impact Investment Group are establishing the $200 million Solaire Income Fund to provide long-term stable returns to investors through investment in solar PPAs and related assets. The fund will invite investors to provide equity finance in addition to the CEFC’s finance to support Tindo’s rollout of its solar PPA program.