The energy market is rapidly evolving with new technologies and new business models emerging all the time. Here we profile 3 dominant forces influencing your investment in renewable energy.

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1) Rooftop Solar vs Solar Farm:

Five years ago, rooftop solar in Australia was barely a thing. Then prices dropped more than 50% in 6 months, and 80% in 2 years. We were working on the zero carbon, Cape Paterson Ecovillage at the time, and were updating our models every month.

All of a sudden, it became clear that rooftop solar was hitting the mass market.

Today, you can get even competitive paybacks on rooftop solar (under 7 years) when you are paying daytime electricity rates under 15c/kWh - a lot of medium-to-large energy users are in that category, which is why solar for the commercial market has been growing rapidly.

For a while there, it looked like rooftop solar would dominate against ground-mounted solar. But in 2017, the tide turned with large scale solar falling in cost dramatically. A range of exciting new small scale solar farms (sub 2MW) popped up, promising  $1/W installation costs. You still have to send electricity from the solar farm to where you need it, paying energy market fees along the way, but at $1/W, that may be worth it as a hedge against future price rises.

This is why we are seeing big projects done in the corporate PPA space, particularly in the US.

If you are a corporate in transition to 100% renewable energy, like Ikea, you need to understand the trade-offs between solar farms, rooftop solar on your buildings, and investing in rooftop solar on third party buildings - the risk and reward tradeoffs will influence your most efficient, effective pathway to reaching 100% renewable energy.

 

2) Social Impact and Social Licence

From Donald Trump being elected, to Brexit, and a swathe of disruptive political change in between, social equality, or perhaps the social inequality created by decades of industrial capitalism, is looming as a defining force of our time.

We have helped companies align business, social and environmental goals, with solar projects at Abbotsford Convent and Footscray Community Arts - one of the largest crowdfunded solar project in Australia, and the first to include battery storage respectively.

Investing for profit is no longer considered enough. Profit is not quite a dirty word, but without a social mission and without clear investment backing that social mission, being for profit leaves your social licence exposed.

We believe that investing in solar can deliver on the much talked about, much maligned and elusive, triple bottom line. Perhaps as importantly, without investing for social impact alongside your environmental goals, you risk leaving a huge portion of the population behind on your mission. 

Purchasing offsets in the global market doesn't cut it anymore.

  • 50% of the population doesn't care about offsets
  • 40% get the feeling it is greenwash (but can't tell for sure)
  • and the committed 10% know it is greenwash.

It is the committed 10% that will work tirelessly to lift the lid on your green credentials, and ultimately decide if you are genuine or not.

We work with companies to understand their brand goals, business goals, and social mission, to ensure their transition to 100% renewable energy supply is the right one.

 

3) The Utility Death Spiral

Should you be worried about the utility death spiral? Or is it not a thing? Perhaps it is too early to say...

But we do know that as innovators like Tesla (or the home grown tractile) plan to make rooftop solar pervasive with solar tiles, and with battery storage costs falling faster than expected, there will be increasingly less reliance on the grid for energy.

The only counter force to rooftop solar and storage, supporting grid supplied energy, is the falling cost of electric cars, and the need to fill those car batteries with electricity.

Will car batteries save the grid? Or will Elon Musk follow through on his promise to take charging stations off the grid entirely?

How this force plays out could seriously affect your investment in renewable energy and solar energy assets. For example the economics of large scale solar farms may be eroded if the price of using the grid, to send that energy to where it is needed, goes up in response to the death spiral.

This is why we have spend over 18 months with the Central Victorian town of Newstead (Renewable Newstead), on its transition to 100% renewable energy, negotiating a network tariff with Powercor, and the Australian ENergy Regulator, to de-risk their investment in solar power. You can read about the Renewable Newstead project in the guardian.

 

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