Interview with Paul O’Reilly of the Rainbow Power Company

Rainbow Power Company – one of Australia’s oldest solar companies

In this, the first in what we hope will be a number of interviews with solar opinion leaders, business people and experts in the solar industry we chat with Paul O’Reilly, director of the Nimbin-based Rainbow Power Company. Sit back and enjoy as Paul talks feed-in tariffs, the almost constant boom and bust cycles in the Australian solar industry and his optimism for the future.

The solar industry must have changed a lot since Rainbow Power Company first set up? Do you think this has been for better or worse?

RPC has seen a lot in its time, it’s a shame that the roller coaster seems to be one of the constants of the industry. However it’s great that solar has moved from being an alternative industry to being part of the mainstream. The competition in the industry is driving it to new levels; I just hope this produces power for the people rather than power for large business monopolies.

For those considering setting up their own solar panels, can you advise why 1.5kW solar systems can range in price from $999 to over $5000?

As with many products today we see a wide range in quality of equipment. The “Bunnings” model of selling cheap, en masse, systems appeals to many consumers in Australia. Government rebate programs increased this trend by paying for the majority of the system costs. In effect solar customers are going shopping with fixed amount of government money and are there to buy the cheapest system possible, reducing their own financial risk. This was illustrated when solar systems were being installed for $0, who would say no? It’s been a race to the bottom in regard to quality in the Australian solar industry due to this upfront rebate structure.

RPC is currently getting lots of calls to repair systems that were installed by shonky installers. Customers bought these systems based on price but when something goes wrong and they call their installer, the companies have already gone out of business. Buyers need to be aware that often you get what you pay for.

Making solar panels uses a number of chemicals and a great deal of energy. Are they really a green choice?

Ethics in manufacturing are an important consideration. Generally current crystalline panels have an embodied energy payback of approximately 1 year. Thin film panels promise to reduce these costs even further. But beware of some thin film panels which use dangerous chemicals like cadmium. The panel manufacturer’s quality assurances are all you can go on. Once again you need to question whether the cheapest panels are always the best choice when it comes to choosing your products.

How do you rate the debate over solar in the last 12 months in this country?

Appalling, I feel that the solar industry was caught totally off guard for what occurred. Twelve months ago both state and federal governments were falling over each other to green wash their campaigns. The policies and programs they announced put solar on steroids, producing an uncontrolled boom in the industry. The debate rapidly moved to the ballooning cost of these unchecked solar subsidies and instead of winding them back progressively they dropped us like a drug cheat at the Tour de France.

In NSW it was pure political opportunism. The cost blowout of the NSW solar bonus scheme was used to beat the [previous] Labor government around the head . The solar industry was just collateral damage along the way. There has been little coverage of the successes of the program in developing a new industry in NSW and the benefits solar can bring the wider community.

How much of a psychological impact on solar consumers (and those looking for alternatives) is the fact that using a domestic solar system is now cheaper that accessing electricity from the grid?

Retail parity is a major milestone for the solar industry and its sustained growth. For the first time it is cheaper to buy power from solar than from the grid without government assistance. Here’s the catch though, you  have to use the solar electricity as soon it is produced.

For consumers this means they have to understand their consumption behaviour to assess the benefits solar can bring. This process can be complex and is part of a new era of energy literacy that will be required in this coming century. Even if you don’t have solar, the planned electricity price increases mean you are going to pay a lot more attention of your energy bill in the next decade than you did in the past.

As for domestic PV the problem is that most people are not at home during the day to use their solar. This means that without government support through a FIT and without battery storage the domestic PV market will remain small. Grid parity will there for have a greater impact on commercial rather than domestic energy use in Australia.

Is there any Australian state or territory which has got support for solar right? Would the Australian solar industry be better off if we adopted government support closer to the German model? In your opinion, are feed-in tariffs a good way to support fledgling solar industries? If so, how can governments better manage these schemes?

State government support has been very lumpy to date in Australia and has lacked the ability to react quickly enough to a rapidly developing industry. FIT were a great improvement from upfront rebates as they placed the reward on the energy produced not on the installation of solar. This means that customers are more likely to choose their equipment carefully.

Australian FIT policy lacked any sophistication though. The German FIT model has progressive reductions in subsidy built into its design. The Australian models of fixed FIT will always produce an inevitable boom and bust cycle, as solar costs are decreasing rapidly. It seems to me that reducing FIT according to the installation targets would be the best way to control costs of the program.

Interestingly, there is research coming out that 44 cent NET FIT are effectively cost neutral to the community. This is due to the Merit order effect whereby solar and wind reduce the wholesale electricity price during peak periods. This indicates that Queensland has been right in sustaining its FIT.

ACT’s new reverse action model looks very promising for producing great value for money. Essentially they will be deploying solar at the least possible cost to ACT electricity consumers. It is also imperative that at some point a FIT is no longer a subsidy but reflects the base value of the electricity being produced by the solar customers. The current debate in NSW is about setting the floor price for electricity exported from solar systems to the grid. Small solar customers need to be protected in what is a highly regulated and noncompetitive marketplace.

Whenever I speak with people in the German solar industry they cannot understand the Australian fixation with controlling the size of solar systems. I sense this is because the motivation surrounding Australia Solar Policy is about winning votes and photo opportunities rather than developing a truly sustainable solar industry.

Although these FIT programs have been less than perfect, we need to remember that its a brave new world. The status quo has a terminal illness and developing the systems that will sustain us into the future will have teething problems. Let’s learn our lessons, make improvements and move on.

What improvements in solar technology are we likely to see in the next few years?

It’s an exciting industry to be part of. Every day I see new and innovative ideas.

I think we will see thin film technologies progressively overtake current crystalline panels. Whenever I look at a set of solar panels on a roof I can’t help but reflect how clunky they look and how much space is wasted. We talk a lot about cell efficiency in the industry but the real game is total  installed system efficiency and $ per watt. This is where thin film technologies can make such a difference. Think of  cheap solar paint coated onto corrugated iron, no glass, no aluminium frame, no wasted space. Who cares its only 10 percent efficient?

I think solar will become embedded in our lives as the cheapest source of energy. A suit of complementary technologies will be needed to help us use it effectively. Devices in our home will be able to respond to when solar is available or energy is cheap. Rapid developments in lithium batteries will allow us to store energy for later use.

One of the greatest challenges remains in our ability to store energy. We are on the cusp of seeing commercial technologies that store heat and cold for later use. We will see Concentrated Solar thermal plants with thermal storage emerge in the next few years. The ability of these plants to generate electricity during peak periods after sunset make them a highly attractive technology.

The same can occur for storage of cold thermal energy. Air conditioners that cool a thermal mass for use at a later time could provide similar advantage. The ability of these technologies to match production  to consumption  suits the variable nature of renewable energy.

Are you optimistic that Australia can be a world leader in both domestic and large-scale solar technology?

Even after watching government’s booms and busts regarding the development of renewable technologies in Australia, I can’t help but be optimistic about the future of this industry. In the end these technologies are a good idea and very shortly we will see them being the cheapest form of energy. Once this occurs there will be no holding back.