South Australia based solar manufacturer Tindo Solar looks to be the first big winner from South Australia’s newly announced virtual power plant.
The Labor state government says half of the 250MW of rooftop solar to be installed under the scheme must be sourced from Australia, and because Tindo is, at least for now, the only Australian-based solar module manufacturer, it looks best placed to bag half the mandate.
Glenn Morelli, the head of Tindo Solar (his Cool and Cosy company bought it last year), says the decision could enable Tindo to double output at its Adelaide-based manufacturing plant to near its capacity of 60MW a year.
Morelli told RenewEconomy that he had sought assurances from the government that the VPP plan would not cause a hiatus in the overall solar installer market as consumers waited for their “free solar”.
He said he had been assured that the first 25,000 installations would go to social housing, which would not otherwise be in the solar market, and the next would focus on private low-income housing and the private rental market.
“We will be expanding. It’s just a matter of employing and trading more operators, and increasing our logistics. We will be going to close to full capacity.
“Yes, there is an election, but you have got to admire forward thinking of the government for taking on these sorts of projects, and genuinely assist those battling with high electricity prices.
“For our business, it gives us a great deal of confidence that we can produce more panels, and that we can make plans to move forward at a bigger scale.
“It will also give us more exposure – to make South Australians aware that we do make world class solar panels right in their backyard.” (Check out his interview last year in RenewEconomy’s Solar Insiders podcast here).
Morelli is not the only one pleased. Smaller retailers are not looking at the South Australia market, which they previously saw as too difficult because of the lack of competition, and the difficulty in managing risk.
“I think it is a very good thing,” said Ed McManus, the CEO of Powershop, owned by New Zealand’s Meridian Energy in this week’s Energy Insiders podcast. “It will lead to more retail competition in south Australia.
McManus said Powershop will certainly look at the opportunity, and the government’s tender for a “new” retailer to manage the rollout of 5kW rooftop solar systems and a 13.5kWh Tesla Powerwall 2 battery storage system to 50,000 homes over four years.
“One of the issues (with South Australia) has been its lack of capacity, and the lack of generation that allows retailer sto manage risk when prices get high,” McManus said.
“It’s not a liquid market for capacity in South Australia at the moment, it is risky for independent retailers to go there.
“This VPP has the potential to provide some of that capacity, and allow some other retailers into the market and bring prices down. We will certainly be having a look.
As will, one presumes, other smaller retailers like Alinta and Momentum. The market is dominated by AGL, but even it was sending its congratulations, despite the Tesla VPP being 50 times bigger than its own project.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.