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Posts Tagged ‘Danny Kennedy’

In late 2006, there was something of an exodus from Australia as solar startups decamped for California, frustrated by the long-entrenched conservative government’s tepid support for renewable energy. On one Sydney-to-San Francisco flight alone could be found David Mills, co-founder of solar power plant company Ausra, and Danny Kennedy, chief of solar installer startup Sungevity.

Flash forward 18 months and solar energy companies are beating a path back to Australia. Ausra recently opened up operations Down Under, and last week Silicon Valley solar company SunPower (SPWR) acquired an Australian solar installer called Solar Sales. So is Oz the next hot solar market? By all accounts, the sun-baked environmentally conscious country should be. But the move into the South Pacific is another example of how governments’ ever-morphing renewable energy policies are spurring solar companies to move operations around the globe.

“Obviously there’s a lot of sun in Australia but with the recent change in government there’s a policy environment that could be much more favorable for us,” Peter Aschenbrenner, SunPower’s vice president of corporate strategy, told Green Wombat. “We decided to get in now. It was a little opportunistic as the owners of  Solar Sales were looking to monetize their investment. It follows a model of a previous acquisition in Italy where we got in before the market headed north.”

Last November, a left-leaning Labor government took power in Australia, immediately signed the Kyoto Accord and expanded a national subsidy for rooftop solar panels. Meanwhile, individual Australian states, much like their American counterparts, have enacted their own incentives. Three states – Queensland, South Australia and Victoria – have adopted “feed-in-tariffs” that pay homeowners a premium for electricty produced from solar panels – up to four times the prevailing power rates. Solar homeowners that return  more electricity to the grid than they consume can zero out their power bill or even earn cash from their utility.

But the government of Prime Minister Kevin Rudd has shown the same propensity to alter the rules of the game mid-stream as its predecessor, which wreaked havoc on the wind industry several years ago when it abruptly curtailed a renewable energy target. The Rudd government already has changed course on a national solar subsidy – which provides rebates up to $A8,000 for photovoltaic systems – to make it available only to households earning less than $A100,000 – which qualifies as middle middle-class in Australia’s big cities. Some of the states in turn have limited their subsidies. Victoria – Australia’s second-most populous state – will pay premium solar rates to only 100,000 households.

Given that solar is a game that moves as you play and the relatively small size of the Australian market (population: 20 million) Kennedy for one is cautious about doing business in his homeland.

“I think that it’s potentially a good market in the future,” says Kennedy, a former longtime Greenpeace activist who’s close to Australia’s environment minister and other government officials. “But it’s not living up to its potential because there’s a set of mixed signals from the federal and state governments and no certainty from one year to the next.”

Just how quickly the market can change has been illustrated by Spain, a solar hotspot that has attracted SunPower and other solar power plant builders as well as financiers like GE Energy Financial Services (GE)  with its lucrative premium rates for green electricity. But now the Spanish government is considering cutting its feed-in-tariff and limiting it to an annual 300 megawatts of installed solar, 100 megawatts of which must be rooftop photovoltaic systems. By contrast, some 1,100 megawatts of solar were expected to be installed this year. That would dramatically change the economics for solar energy companies that have moved into the Spanish market.

“This is something we’ve been preparing for,” says Aschenbrenner of SunPower, which has focused on building photovoltaic power plants in Spain. “With our global footprint, we are well placed to move allocation around as these markets wax and wane. In Spain, we’ve been working on building a dealer network to focus on the residential and small commercial markets.”

In Australia, SunPower will need to ramp up its new acquisition since Solar Sales operates on the country’s isolated West Coast while most of the country’s population is concentrated on the eastern seaboard. About half of Solar Sales business has been building off-the-grid power systems for Outback communities that rely on diesel generators for power. Aschenbrenner says he expects that business to continue but the focus will switch to residential solar.

photos: Todd Woody

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