It promises to be a big week for the solar industry. The NSW government has called a “solar summit” for this Friday to try and map out a sensible pathway for the industry, following the explosion in demand caused by the predictably understandable feed-in tariff, which has created so much demand that the scheme has been suspended five years before originally envisaged. It’s just a pity that the government has chosen to have the summit on the same day as the industry’s annual get together in Melbourne. Industry orgs think it is good idea.  

But what happens next? Hopefully some sensible policy making, which would be a first. As it stands, the major NSW energy companies are offering just 6c/kWh for contributions from newly installed rooftop solar, which is about what they pay for coal, and then sell it back to customers at around 3-4 times the price. It’s a touchy subject, but the solar industry suspects that the retailers are merely fattening their margins. The industry subsidies have been turned on their head, going from the absurd to the ridiculous.

The problem is that, while policies are split between federal and state incentives, the right hand does not know what the left is doing. One suggestion to finesse the current cumbersome methods for feed-in tariffs, and to avoid the boom-bust scenario that characterises the sector, is to introduce a system that gives a prescribed cost and capacity to be introduced over a certain period. If the cost is exceeded, then over the next quarter the  tariff is reduced by that percentage and the capacity increased. In this way, at least, the industry can continue to grow and reap the rewards of cost reductions.

On the federal level, the big question is around the future of the solar credits multiplier, with some suggestion that their winding down may be accelerated for a second time. Warwick Johnston, the vice president of the Solar Energy Industries Assocations, has suggested a redesign of the certificate scheme, that he says could transform the industry. Instead of awarding “deemed” renewable energy certificates (RECs) based on a system’s nameplate capacity, Johnston suggests replacing them with “performance-based photovoltaic RECs, basing their issue on the amound of energy that is actually produced. Johnston says the current scheme makes no distinction between what a PV system claims to do and what it actually achieves. The performance-based RECs could avoid unwanted outcomes, and virtually act as a national feed-in tariff.

Johnston says the current system “encourages PV system obesity” by disproportionately rewarding smaller systems that have inherently lower efficiencies, and provides no incentive for quality, nor reward for superior components or high performance. He says it would be no problem metering the performance targets.

“The prospect of transforming a $6,200 upfront discount based upon deemed production into a performance-based annual incentive with an equivalent value could present significant benefits for the industry,” he wrote in an article in Ecogeneration. “Although upfront costs would increase for the consumer, system financing is already well established in the industry.

“Furthermore, installer’s cash flow constraints wouldn't be determined by clearing house surrender dates, and the electricity price impact of the Small-scale Renewable Energy Scheme (SRES) would not be forward-weighted, as is currently the case. Performance, quality and longevity would be rewarded, and annual REC payment when combined with electricity export and offset consumption would annihilate electricity bills. Thus there are industry, environmental, and political benefits on offer.”

Oils aint' oils

The French oil giant Total may have been the last of the world’s big-three oil groups to boast of its investment in renewables, but it is convinced that it’s commitment is the most meaningful. Total’s interest in alternative energy began in earnest in 2007 with the appointment of Christophe de Margerie as CEO and orders to diversify. As Philippe Boisseau, the head of the gas and power division noted dryly. And at BP’s expense, over the weekend: "We were not beyond petroleum, but on top of petroleum," said Boisseau. "Oil and gas cannot meet the demand alone."

Boisseau was commenting after Total announced a $1.25 billion investment in US solar company SunPower and Total, a move that has set the solar industry abuzz, as this article from Reuters illustrates, as Total brings its enormous balance sheet to bear on SunPower’s expansion strategies, which are now likely to quicken. Total also has investments in solar module company Tenesol, likely to be folded into SunPower, and biofuel and green chemical manufacturer Amyris.

Another interesting point noted by GreentechMedia, is the growing pre-eminence of French industrial groups in the so-called green economy. GreentechMedia, which is congratulating itself for predicting France would be one of the big movers and shakers in the cleantech world in 2011, notes that Total is not alone in making green investments in the past 12 months:  Schneider Electric has bought five companies in recent months to build on its building management and power delivery expertise, Saint-Gobain, has invested $80 million into smart window maker Sage Electrochromics, nuclear giant Areva bought (Australian founded) solar thermal company Ausra, Veolia is investing heavily in water start-ups, and Nissan Renault is regarded as the leading company in electric cars.