Australia Solar Industry Trails U.S. by Four Years

First Solar Inc., the biggest maker of thin-film panels, said Australia is four years behind the U.S. in building large solar farms and expects its project with General Electric Co. to help spur the industry’s expansion.

First Solar is supplying panels to the 10-megawatt Greenough River project in Western Australia, the nation’s first large-scale solar plant. The GE- and Verve Energy-owned solar project, which started this month, may increase capacity to as much as 40 megawatts, the companies said Oct. 10.

“This is less about the size and more about the fact that we now have a utility-scale solar project in Australia,” Jack Curtis, First Solar’s Sydney-based vice president of business development, said in a phone interview. “The local industry can now look to this project and see they can be developed, that they can be executed. It will provide local operational data that can be used to bring the rest of the industry along.”

The Tempe, Arizona-based company estimates as much as 3,000 megawatts to 5,000 megawatts of solar photovoltaic plants may be built in Australia from 2015 to 2020 as the country moves toward a target of getting 20 percent of its power from renewables by the end of the decade, Curtis said yesterday.

Australia currently has 1,936 megawatts of solar projects using photovoltaic panels to convert sunlight into electricity, including just 19 megawatts at large-scale plants, according to Bloomberg New Energy Finance. A large-scale solar project is defined by BNEF as having capacity of more than 1 megawatt.

Missed Deadlines

The Australian government in July started charging polluters for the carbon they emit to reduce the nation’s reliance on fossil fuels and encourage wind and solar power. The country also plans to invest A$10 billion ($10.3 billion) in Clean Energy Finance Corp. to help the industry.

“First Solar has labeled Australia as one of the more prospective markets globally, and we would agree with that,” said Tim Buckley, managing director at Sydney-based Arkx Investment Management, which owns shares in the U.S. panel manufacturer. “But progress to date has been limited,” partly because of uncertainty about government energy policy.

While Australia has the highest average solar radiation per square meter of any continent, according to the government, some projects picked to receive solar grants, including a venture led by Areva SA in the state of Queensland, have failed to meet financing deadlines and sign power-supply agreements.

“If you can’t create a sustainable solar market in Australia, it’s difficult to see how you can create one in other markets without strong government intervention,” Curtis said.

Landmark Project

First Solar completed its first 10-megawatt, utility-scale solar project in the U.S. in December 2008. More than 5,000 megawatts of First Solar modules have now been installed worldwide, according to the company’s website.

“It’s only by building a 10-megawatt facility can we then learn what the obstacles are to building a 20-megawatt facility and a 40- or 50-megawatt project,” Arkx’s Buckley said by phone. “The First Solar project is a critical landmark.”

First Solar and Sydney-based AGL Energy Ltd. in June won A$129.7 million in government funds to build a 159-megawatt solar project across two sites in New South Wales. AGL expects construction to start in mid-2014, with the plants operating by December 2015, it said in August. The AGL plant will cost A$450 million, Energy Minister Martin Ferguson said in June.

Another First Solar proposal with TRUenergy Holdings Pty, which lost to the AGL venture in the government’s initial funding round, is now a candidate for funding from the Australian Renewable Energy Agency, according to Curtis. The Australian agency has about A$1.7 billion in renewable energy funding that hasn’t been awarded, its website shows.

Copyright 2012 Bloomberg

Lead image: Track via Shutterstock

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