Amid Coronavirus Crisis, gov’t has Good News for Solar Industry

As coronavirus grips the planet, Australia and batters the economy, governments the world over are scrambling to respond. Among Australia’s federal responses is a $17.6 billion stimulus package which it has called ‘Economic Response to the Coronavirus’. And there’s some very good news in there for the solar industry and businesses looking to buy in.

The Treasury says it wants to protect our economy by “maintaining confidence, supporting investment and keeping people in jobs” amid the global pandemic. This is mainly in the form of support for household income and – significantly – for businesses.

What’s in it for solar power?

Before COVID-19 took hold, the uptake of solar photovoltaic (PV) technology – which turns free sunlight into useable energy – was clearly on the rise and in lock-step with our cultural shift. But with businesses and consumers now laser-focused on jobs, investments, profits, business survival and of course health, demand was sure to be hit hard.

Making it even worse is that the solar industry is particularly exposed to the impact of the coronavirus, as China – having completely shut down amid the epidemic’s peak in the country – produces most of Australia’s solar panels.

The Australian government is therefore moving to minimise the subsequent economic downturn with its stimulus package – and a big boost for solar PV technology is in the form of very attractive tax deduction incentives.

“The package is front-loaded in order to instil confidence in businesses and households and help firms keep people employed,” the government’s summary of the package states. “This will ensure that the economy is in the best possible position to recover as the shock subsides.”

One measure, in the package to support “business investment”, will boost the instant asset-write off threshold from $30,000 to a cool $150,000. And not just that, businesses with turnover of up to $500 million a year will even be eligible – up from just $50 million prior to the virus outbreak.

The measure will run until the end of July.

For many businesses looking to slash their long-term energy bills, the temptation to time their switch to solar with the period of the incentives will be strong. In practice, it means any solar system of up to $150,000 can be instantly written off. Prime Minister Scott Morrison confirmed: “They will be able to write it off completely. One hundred percent.”

And the good solar news doesn’t end there. Another new government incentive, entitled Backing Business Investment, will accelerate depreciation deductions on eligible assets that are installed by the end of the financial year.

“Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost,” said the PM. This measure is expected to especially incentivise solar farms.

The global situation may currently appear bleak, but the latest news from China is that solar PV production is now beginning to resume as the country gets its coronavirus crisis under control and eases the lockdown. Even in tough times for the world, solar energy will survive and thrive.

Australia’s Attitude to Coal Power Stations ‘an Anomaly’

The coal power station business had a very bad year in 2019 – but not so much in Australia.

Carbon Brief, a website monitoring how climate and energy policies interact, said the 3 percent global drop in electricity generation by coal was the biggest on record. To put that in perspective, that’s the annual energy output from coal in Germany, Spain and the UK combined – adding up to a hefty 300 terawatt hours.

And the Global Coal Plant Tracker, which is basically a big online map detailing where coal is burned all over the world, said plenty of developed countries are giving up on the black stuff altogether. Places like Canada, Italy, France, New Zealand and many others have no current plans to build any more coal-fired units. The United States, meanwhile, not only has no plans in the works, there are none currently in construction either.

Australia, though, is an outlier. The tracker claims that although 11 coal projects were shelved in our country in the last decade, there are currently plans to build three new coal power stations.

To some, those plans are not controversial. Writing in The Australian, Matt Canavan claims that “Without new coal-fired power stations, thousands of manufacturing jobs across Australia will be lost”. Crucially, Prime Minister Scott Morrison agrees with that, saying it would be “reckless” to endanger the jobs of the more than 50,000 people employed by the coal industry.

Germany, though, which closed its last black coal mine two years ago and wants to close all brown coal mines and coal power plants altogether by 2038, is apparently doing so without shedding a single job.

“(The government) asked us how much time you need to do that without any problems, not to bring the people off the working market,” Christophe Beike, spokesman for the German coal giant RAG, told Foreign Correspondent.

The coal industry is also on the slide in other developed countries, like South Korea and those in the European Union. Even in India, a place not normally associated with kicking the coal habit, is set to record a reduced coal output for the first time in 30 years, and coal power generation in China is flattening out.

“We are something of an anomaly in the developed world,” Simon Nicholas, an analyst at the Institute for Energy Economics and Financial Analysis, told SBS News. “Among developed nations, Australia is almost on its own in terms of wanting to build new coal-fired power stations,” he added.

Nicholas says the main problem in Australia is politics, as our coal industry – one of the biggest net exporters in the world – has a lot of influence on “both major sides of politics”.

“Overseas, in places like the US and UK, there’s less pressure on governments to keep the industry alive,” he explained.

Of course, Australia is not the world’s worst offender in terms of pushing ahead with plans for more coal power stations. India is planning 27 new projects, Indonesia 52 (with 24 others in construction), Turkey 28, and China a whopping 206 either in pre-construction or construction.

But Australia is among only four other fully developed economies still pushing ahead with coal power projects, like the one the Australian government is spending $4 million on for a feasibility study in Collinsville, north Queensland. Japan, Poland, South Korea and Germany are the other offending developed countries still considering new coal power.

Business Looking Good for Chinese Solar Companies

In some circles, especially those who love goldfish, the Chinese company Tongwei Group is best known for being the world’s biggest producer of fish food. In other circles, Tongwei Solar – a subsidiary of the same company, is a very different company indeed. Altogether, it’s a powerful conglomerate that does its talking in the form of billions of Yuan and dollars.

Amid the worsening outbreak of coronavirus, Tongwei has just donated a laudable 10 million Yuan (just over AUD $2 million) towards the fight against the epidemic. Elsewhere, it’s business as usual for the company whose profile in the world of ‘new energy’ product development is on the rise.

As stated above, Tongwei doesn’t just make a lot of fish food – it’s also now the world’s biggest producer of solar cells. To put that into context, the company’s production capacity is currently a hefty 13 gigawatts – which adds up to more solar cells sold in 2019 than have ever been sold in Australia. In total, there are 207 patents in Tongwei’s name, resulting in over 200 awards and honours in China.

But until very recently, you couldn’t really buy a Tongwei solar panel here in Australia. What would happen is that they would buy silicon ingots from elsewhere, turn them into solar cells, and sell them on to the solar panel makers.

Things, though, are changing. Tongwei is a true believer in the growth of the solar power market, having invested a hefty 12 billion Yuan ($2.5 billion) in the effort to ramp up production to an eye-watering 30 gigawatts of cell production within the next three to five years. That would be more than 10% of the world’s entire demand, boosting global production of solar panels from about 100 to 270 gigawatts.

“As we all strive jointly for sustainable development, we see the change of the world and hear the call of humankind,” Tongwei said in a promotional video. “We look forward to a wonderful life in the future.”

2020 has started busily for Tongwei, a company that was created in 2009 amid China’s rapid industrialisation. In late January, it was announced that a three-year, US $1.88 billion (AUD $2.8 billion) contract was signed with LONGi Green Energy, one of the biggest Chinese manufacturers of photovoltaics and the world’s biggest maker of monocrystalline silicon wafers.

LONGi’s wafer supply deal is with all four of Tongwei’s solar cell subsidiaries, adding up to 480 billion ‘wafer units’ of 180um thickness (wafer units are the thin semiconductor slices that are used to manufacturer solar cells). Tongwei already supplies not only high-purity polysilicon for LONGi’s P-type mono wafers, but complete solar cells to the subsidiary LONGi Solar.

Business is similarly good for LONGi, having signed another three-year wafer supply deal with Jiangsu Runyang Yueda Photovoltaic Technology worth about US $1.5 billion.

As Renewable Energy Goes Up, Prices Come Down

It is often said that while the switch to renewable energy is laudable, necessary and even inevitable, it is nonetheless expensive. But not according to the Australian Energy Market Operator (AEMO), which is the country’s independent body for ensuring we all have access to reliable, safe, sustainable and affordable energy.

Published just this week, the AEMO’s latest Quarterly Energy Dynamics report for the final quarter of 2019 explained not only that growth in renewable energy in Australia is expanding at record rates. According to the report, total renewable output – comprised mainly of solar and wind – has “risen steadily across the years”, and now accounts for 11% of the energy mix.

Renewable energy records broken in 2019:

* Highest share of energy market demand
* Highest renewable output – 6,396 MW on 12 November 2019
* Highest solar output – 2,421 MW on 4 December.

“Record (renewable) generation growth in 2019 is expected to continue into 2020, as the large amount of new capacity currently being accredited is likely to reach full generation by mid-2020,” the AEMO report stated.

The same report also revealed that, at the same time, wholesale electricity prices are falling “sharply”.

That is despite the fact that it was a particularly challenging year for the energy sector, due mainly to extreme heat, outages and the changing supply mix. 2019 was the hottest and driest on record in Australia, which had a major impact on hydro generation output, and the country is still reeling from the tragic nation-wide bushfires. In the final days of December, prices hit a high of $6,443/megawatt hours in Victoria, and there was particular volatility in South Australia as well.

But overall, prices were actually much better than usual. Over the entire Q4 quarter, wholesale spot electricity prices averaged just $72/MWh – an almost 20 percent reduction compared to a year ago and the lowest quarterly average since 2016. According to the AEMO, the downward pressure on prices was because energy supply from wind farms, solar farms and gas-powered generation was higher. Taken alone, wind and solar output was 39% higher than one year ago.

The increased solar output contributed to a decrease in black coal-fired generation – it was down some 1,061 MW compared to the Q4 report in 2018, which is lower than it has been since 2016. The AEMO also said coal-fired generation took a hit due to supply issues at the Mr Piper power station in NSW, and that wholesale gas prices continued to fall.

City of Adelaide Going 100% Renewable in 2020

Which city council is going 100 percent renewable? The City of Adelaide, that’s who. A milestone for locals but also the planet, it will be the first time any council in South Australia powers all of its operations with wind and solar energy.

“The City of Adelaide is taking climate change seriously and this partnership demonstrates that we are taking real and meaningful action,” said Adelaide’s Lord Mayor, Sandy Verschoor. “It will not only save our rate payers money, it helps cement Adelaide’s international clean and green reputation.”

The long-term ‘partnership’ she refers to is a landmark power purchase agreement (PPA) with electricity retailer Flow Power, which takes effect from 1 July. It’s just a part of the City of Adelaide’s stated ambition of rapidly reducing carbon emissions in order to become one of the world’s first cities to be completely carbon neutral.

As a first step, from 1 July any and all City of Adelaide operations – like community buildings, street and traffic lights and council event infrastructure – will be powered only by a local wind and solar power mix purchased from Flow Power.

Lord Mayor Verschoor said the agreement with Flow Power, a major and innovative Australian energy market player, will cut the council’s emissions in half, and slash electricity costs “in the order of 20 percent”. The deal involves enough renewable energy to power almost 4000 homes, and is also the equivalent of almost the same number of cars being taken off the road.

The wind and solar power will come from the Clements Gap wind farm in the mid-north and new solar farm projects in Streaky Bay and Coonalpyn. Flow Energy bought the solar projects from Tetris Energy, who have developed a dozen renewable energy plants around the state and the country.

“From 1 July 2020, if it’s run by the City of Adelaide, it’s being powered by renewable electricity,” the Lord Mayor said, referring to other council operations like corporate buildings, electric vehicle chargers, barbecues in the parklands and water pumps. “Everything that council operates will be powered by renewable electricity,” Lord Mayor Verschoor added.

The knock-on effect for the new solar farms in Streaky Bay, which is situated on the Western Eyre Peninsula, and Coonalpyn, which is 140 kilometres south-east of the state capital, will be local employment opportunities – both in the construction phase and long-term operations.

“This deal will provide crucial support to new solar projects in the state, creating jobs and helping to bring more renewables into the system,” said David Evans, Flow Power’s co-founder and director of engineering and projects.

Already in 2019, Adelaide’s total solar power capacity was boosted to 1.1 megawatts thanks to new solar panels in four new locations. As the Flow Power deal was announced, the Adelaide Town Hall, works depots, car parks, Adelaide Central Market and Adelaide Aquatic Centre were already powered by on-site solar power.

Longi and Tongwei Agreement Means Great things for Solar Energy Australia

It’s undeniable that solar panels are the way of the future, especially in our hot Australian climate and energy prices only getting more expensive each year. They’re becoming increasingly popular due to their ability to ‘sun-bake’ and absorb natural energy from the sun, rather than using traditional fossil fuels that harm the environment and your wallet.

Green energy is becoming the new normal worldwide, and with one of our best-selling brands Longi making new, long-term deals with PV cell manufacturers and polysilicon producers TongWei Solar, it’s easy to see why some of the best solar panels in Australia are more affordable than ever.

As two Chinese companies including Tongwei Solar Group (a PV cell maker and polysilicon producer) and Longi Green Energy Technology are acquiring 30% shares of each other’s respective wafer and silicon businesses. By investing in each other’s companies they will be agreeing to a long term relationship and due to this cooperative agreement we are confident that TongWei Solar panels are a sound financial and long term investment.

Agreeing to equal stakes will strategically support each other’s supply chains. Longi’s 15GW monocrystalline wafer factory in northwestern China’s Ningxia region is handed to Tongwei. In turn, Tongwei Solar will be giving up an equal stake in its own crystalline silicon factory in Inner Mongolia, according to the group’s chairman Liu Hanyuan.

By doing so, each company will plan to purchase at least 75% of each other’s future outputs as part of the complex agreement which has been announced ahead of the SNEC PV Power Expo 2019. As Tongwei Solar produces around 50,000 tonnes of high-purity crystalline silicon, both companies purchasing the 75% of each other’s outputs means a great deal for them to expand and stabilise their respective supply chains – which will lead to a better price for Longi Solar Panels and TongWei Solar Panels in the future!

The agreement with TongWei Solar is a well calculated and strategic move for Longi Solar as they are the largest mono player in the global solar market; their monocrystalline wafer capacity reached 28 GW at the end of 2018, while they aim to hit 36 GW by the end of 2019. The efforts made by these two leaders in Solar Energy means their already commanding force in the industry will be even stronger thanks to their tie-up arrangement.

A huge step forward for green energy and solar panels Australia, Tongwei is also committed to developing bifacial and passive emitter rear contact technology and continues to focus on a range of energy efficient alternatives. By expanding these markets as well as their cell and module production capacity by 2020, Tongwei and Longi’s new deal will make solar panels in Adelaide and Australia wide the best on the market.