Renewable energy growth provides contractors an opportunity to turbocharge their business

The increasing demand for energy and the need to cut carbon emissions has rapidly accelerated the growth of energy-efficiency technologies and programs. In this article, Geoff Stapleton, Managing Director, GSES*, and Susan Neill, Engineering Director, GSES, provide insights on the growth of the renewable energy sector and how electrical contractors could turbocharge their business by undertaking training in energy efficiency and solar power.

Renewable Energy has been around for thousands of years but has not always been described as ‘renewable energy’. It was only a few hundred years ago that trade between continents was by sailing boats (wind power) and civilisation has always used the sun to dry materials and foods such as crops, mud bricks and clothes. It is only with the use of fossil fuels over the last few hundred years and the electrification of the world that the aim for sustainability has been linked to energy and therefore the terms ‘renewable’ and ‘sustainable’ energy were born. However, the growth in renewable energy over the last decade has seen a huge demand for electrical contractors to expand their skills to suit this market and to expand their businesses.

Within renewable energy there are many different technologies: wind energy, solar thermal energy and solar electric energy known as photovoltaics or PV. Although some electrical mechanics would be involved in the wind farm industry and possibly the solar thermal power industry, it is the PV industry which has seen the demand for electrical contractors in recent years. The growth in this market has been substantial. At the end of 2006, after six years of the Photovoltaic Rebate Program (PVRP), only 3390 grid-connected solar systems had been installed. However, in only another five years, at the end of 2011, this figure had grown to 634,628.

How does this impact electrical contractors?

Some may see solar grid-connect systems as an ‘overnight’ success, but the solar industry is not new. Solar modules have been in use for the ‘off-grid’ or stand-alone power market worldwide since the 1960s and within Australia as a market product since the early to mid-1970s. In July, the annual ATRAA conference will be held in Sydney. ATRAA was held as the original conference for those retailers/installers involved with alternative energy, but the first ATRAA meeting was held in the 1970s and it then became an annual conference in the 1980s. During the last century, the solar electric industry was involved in supplying systems only to those households not connected to the grid. This was a small, dispersed and very difficult market to work in. Many of these systems used ELV battery banks and the installation on the DC side did not require an electrician. Electricians were only required for the connection from the inverter (device that converted DC to AC) to the switchboard of the house.

By the late 1990s, the first grid-connected PV systems were installed mainly as demonstration systems or by the solar enthusiast. This situation changed in 2000 with the commencement of the Photovoltaic Rebate Program (PVRP), which resulted from a deal between the Democrats and the Liberal government for the introduction of GST. This program encouraged the installations of grid-connect PV systems as well as supplying financial support to those not connected to the grid. However, in the first five to six years, the majority of the rebates were still being used for off-grid or stand-alone power systems (SAPS), as shown in Figure 1. This shows the breakdown of grid-connect versus SAPS systems by state from the start of the PVRP until May 2005. This shows that more SAPS were installed during the first few years of the PVRP than grid-connect systems. The PVRP then became the solar home and community program (SHCP) and continued until the last application was accepted in June 2009.

Table 1 shows the installed grid-connect systems by year since 2000; Figure 2 shows the total installed capacity in kW by month and type for the life of the PVRP/SHCP.

Year	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2012
Number	263	671	1338	1862	1554	3390	6019	19,610	82,988	279,296	351,324

Table 1: Grid-connect systems installed by year. Source: Clean Energy council website and Clean Energy regulator Website.

Figure 1: Breakdown of grid vs off-grid systems under the PVRP from 2000 to May 2005. Source: Australian Greenhouse Website 2005.

Figure 2: PV installations by kW under the Photovoltaic Rebate Program and the Solar Homes and Communities Program, 2000 to March 2011. Source: Australian PV Association - PV in Australia report.

These tables and graphs all show the rapid growth from mid-2007, but it also shows how rapidly the number of systems installed increased following the cessation of the SHCP program in June 2009.

During the life of the SHCP, the first growth catalyst came from the doubling of the rebate from $4000 per kW to $8000 per kW during the last Howard government’s budget in May 2007. Over the last few years of the rebate, the price of solar modules started to decrease, not because of Australia’s growth but because of the industry growth worldwide and the rapid increase in production capacity, particularly in China in recent years. At the end of this rebate, the Renewable Energy Certificates (REC) scheme (as part of the Renewable Energy Target) had started and a multiplier had been applied to the certificate value payable for solar systems. This helped maintain the growth, but the overall continuous growth was stimulated by the variety of feed-in tariff programs introduced by the states. Table 2 provides a summary of the various programs that are current and have existed over the recent years.

State	Start date	System size limit	FIT rate AUD c/kWh	Duration of FiT scheme	Metering type	Program cap	Eligibility
Vic	1 November 2009 - no longer available	5 kW	60	15 years	Net	100 MW	Residential, community, small business
Vic	-	100 kW	Various	-	Net	-	Residential, community, small business
SA	1 July 2008 - no longer available	10 kVA 1 ph 30 kVA 3 ph	44	20 years from scheme’s start	Net	Finished 30 September 2011	Facility that consumes <160 MWh/year
SA	1 October 2011	10 kVA 1 ph 30 kVA 3 ph	16	5 years from scheme’s start	Net	30 September 2013	Facility to consume <160 MWh/year
ACT	1 March 2009 - no longer available	≤30 MW	34.27c to 45.7c depending on size and date	20	Gross	15 MW	Residential, business
ACT	-	30 kW	Retail tariff	-	Net metering	-	Residential, business
NT	-	30 kVA	Retail tariff	-	Net metering	-	NT wide
Qld	1 July 2008 - no longer available	10 kVA 1 ph 30 kVA 3 ph	44	20	Net	Review at 8 MW	Consumers with <100 MWh/year
Qld	10 July 2012		8	To end 1 July 2014	Net	-	Consumers with <100 MWh/year
NSW	1 January 2010 - no longer available	10 kW	20	7 years from scheme’s start	Gross	Finished 28 April 2011	Residential
WA	1 August 2010 - no longer available	5 kW (city) 10 kW 1 ph 30 kW 3 ph (country)	40c to 30 June 2011 20c from 1 July 2011	10	Net	Finished 1 August 2011	Residential
WA	2005	5 kW to 50 kW	7c to 29.45c	-	Net	-	Residential, commercial (Horizon Power)

Table 2: Comparison of the various FIT programs around Australia.

But what has all this meant to the average electrical contractor? Where have the system installers come from? What training was provided?

All Solar PV systems eligible to receive the rebate under the PVRP and SHCP or systems now claiming Small Technology Certificates (STCs) through the REC program had to be designed by an “accredited” designer and installed by an “accredited” installer. This accreditation was initially administered by the Solar Energy Industry Association, which has now evolved over the years into the Clean Energy Council. The accreditation program resulted from discussions held at the 1992 ATRAA conference. After this conference, the recently revamped Solar Energy Industry Association (SEIA) was successful in obtaining funding from the federal government to develop a training program and accreditation program for the solar energy industry. The program was launched and the first training course was conducted after the 1993 ATRAA program. SEIA also played a leading role in the development of industry standards to the extent that Australia is one of the leading countries having many renewable energy-related standards developed since the mid-1990s. From the late 1990s, the industry association worked closely with the Electrotechnology Industry Training advisory Body, now known as EE-OZ, to have renewable energy courses within the national Training Package. This led to the association no longer offering its own courses, but requiring all those who wished to be accredited to undertake specified training courses (Units of Competence) through registered training organisations (RTOs).

The rapid growth in the number of systems being installed over the last five years has also resulted in a rapid growth in training courses and training providers. This growth is shown in the number of accredited electricians. Figure 3 shows how the number of accredited installers has grown from 327 in 2006 to 4273 in September 2011.

There are some who argue that the accreditation and the associated training is not required. However, with the growth of the industry, there have been problems and some of these have been discussed in other forums over recent years. For any industry growing so rapidly, there will be unforeseen issues, but it is important that quality training is available for the electricians to learn the new skills required for this growing industry.

Figure 3: Total number of accredited installers and designers in Australia. Source: Clean Energy Council.

As of March 2012, there were over 670,000 systems installed. This now gives rise to another issue - the need for ‘awareness raising’ of these systems. Electricians that have not been trained on solar systems need to be aware of what to do when working on a house where one is installed. Other tradespeople and emergency workers also need to be made aware of these systems. EE-Oz has recently formed a committee to oversee the development of training resources to meet these requirements.

Where to now for the industry?

The cost of solar systems has dropped substantially over the last few years such that some now argue that based on 20-year life cycle costs the technology has almost reached grid parity. Although the industry has grown rapidly over the last five years, the last 12 months has seen many of the drivers stopped. The many state-based FITs have been removed (no real FIT for NSW) or decreased substantially (Queensland’s announced in June 2012 a decrease from 44 c/kWh to 8 c/kWh). This has led to many leaving the industry, some sources quoting leaving in their thousands. FITs are the main drivers at the moment. People who buy systems want to get paid for the energy they provide to the grid. Ideally they would like to be paid the same price for the energy they provide to the grid as the price they pay for the energy they use from the grid. This would be a substantial driver and is the element required for the industry to maintain growth.

On 1 July the carbon tax was introduced. This new tax keeps ‘green issues’ and ‘clean energy’ in the eyes of the consumer, but in itself, it will not have a direct benefit for the PV industry similar to what the previously described market drivers have had. Commercial PV systems will continue to be installed because these installations will typically see all the energy generated consumed on site and therefore their power bills will be reduced.

So the ‘boom’ for the solar industry is possibly over, but the industry is here to stay. The price has reduced from the $10 to $15 per watt installed of 10 years ago to $2 to $3 per watt installed (and sometimes even less). Businesses and the general public like having their own solar systems which reduce their power bills.

*Global Sustainable Energy Solutions is a renewable energy engineering, training and consultancy company specialising in photovoltaic solar design, online and face-to-face solar training, publishing solar books and PV system audits. Established in 1998, GSES has a diverse portfolio, executing projects in Australia, New Zealand, Asia, Africa and the Pacific Islands for both government and private enterprise regarding renewable energy engineering, consultancy, design, audit and education.

Global Sustainable Energy Solutions
http://www.gses.com.au