Published on September 5th, 2013 | by Giles Parkinson0
Soleir Plans First Australian Utility-scale Farm Funded By Small Investors
An Australian solar farm developer is poised to begin construction of a 2.5MW solar PV project that it says will be financed through an innovative unit-based investment structure, and will be the first utility-scale solar farm funded by small investors.
Soleir this week opened the first two 5kW solar installations at the site in the western NSW city of Dubbo that it says will be used to validate the design and construction of the Solar One project, and be used as a marketing tool for investors.
Managing director Rohan Gillespie wants to sell 5kW modules (with inverters) in the project to investors, at a price of around $6,500 per unit, so that the project can be entirely financed through equity.
He says this will lower the cost of capital, and mean that the project will be profitable simply by selling its output into the wholesale market.
Soleir will own the balance of plant, foundations and transformers and will contribute around 40 per cent of the cost of the $5 million project. It will use a 12kV transmission line and has approval from Essential Energy. It has a 30-year lease on the land from the Dubbo City Council.
“We won’t need a long-term power purchase agreement, and we won’t need bank debt,” Gillespie told RenewEconomy. “Whatever price wind energy needs, we can match it.” And the output will be more valuable because it will be more aligned with the afternoon peaks.
If it works, Gillespie says the Dubbo project could be expanded to 12.5MW, and he sees opportunities for “dozens” more similar projects around regional areas of NSW.
“Once the investment product is established, we think there will be quite a demand for it. We are taking a unique approach,” he said.
Soleir, which is a subsidiary of the listed Red Sky Energy, a gas field developer that is now turning its interest to solar, has received an Australian Financial Services licence to roll out its unitised structure.
He says Soleir’s costs per watt are smaller than bigger projects such as AGL Energy’s Nyngan and Broken Hill projects. “Those flagship projects are largely driven by power suppliers. They have big financing, big contractors, and margins upon margins upon margins. They need $200-$250/MWh. to make money. We need much less than that.”
He didn’t reveal what return would be offered to investors – apart from a “steady cash flow” over 28 years – although this would be included in an offer document. Gillespie says Soleir hopes to begin construction in a few months and complete the project next year.
He said the company would need to import panels and inverters, but would use local businesses for steel fabrications and concreting, and for the planning, transport and drilling of the holes in the ground.
“By providing local jobs, investment opportunities and feeding the renewable energy produced back into the local grid, we believe that the Dubbo Solar One project will demonstrate how regional centres such as Dubbo can be world– leaders in the production, supply and use of solar energy,” he said.
Dubbo is emerging as a centre for renewables in the state. It already is the No1 postcode for rooftop solar in NSW, and some suggest it could also become the electric vehicle capital of the state as well.
Indeed, Dubbo mayor Mathew Dickerson last week took delivery of the council’s first EV, a Holden Volt, that will reduce fuel costs from the Holden Statesman previously used from around $26 a day to around $1.50 a day.
In a blog on the council’s website, Dickerson said he believed Dubbo was the first council in Australia to choose an electric option for the primary Mayoral vehicle.
This is both practical and a leadership step,” he wrote. “This electric car in particular is the first of the three current EV cars in Australia to solve range anxiety problems. In addition to the normal electric motor and a large battery (with an 87km range), it has a small petrol motor that acts as a generator if the battery goes flat.
“The 40 litre tank extends the range by another 500km. For the Mayoral role, which involves short trips within Dubbo 95 per cent of the time, it is the perfect vehicle.”