Australia’s Clean Energy Finance Corporation (CEFC), threatened with abolition by prime minister Tony Abbott’s government, is to give the country’s residential and commercial solar sectors a A$120 million shot in the arm.
The funding will go to three companies – global PV energy provider SunEdison, local manufacturer Tindo Solar and Kudos Solar – to offer lease and power purchase agreement (PPA) programmes for domestic and commercial solar users.
The CEFC said the initiative was intended to “expand and deepen” the PV market in Australia by opening up financial structures normally used for larger installations to homeowners and businesses.
“By expanding the financing options available and introducing new financing models tailored for different market segments, we can help more individual households and businesses to make better use of our resources and save on their energy costs,” said CEFC chief executive Oliver Yates.
SunEdison will be the biggest beneficiary of the funding, receiving A$70 million in debt finance.
The company, which will mark its debut in the Australian market, will use the money to build and operate rooftop installations, and either lease them to customers or sell the power under a PPA.
Pashupathy Gopalan, president of SunEdison Asia Pacific, Middle East and South Africa, said: “The relatively long payback periods for rooftop solar have meant standard bank loan terms were not financially attractive to customers. With the CEFC’s finance, SunEdison is able to introduce a number of finance models to Australia, using our global experience, that will provide an immediate cost saving to customers and expand the use of solar resources here.”
Local manufacturing firm, Tindo Solar, and Kudos Solar, meanwhile, will receive A$20 million and A$30 million respectively to offer PPA products to commercial and residential customers. Kudos Solar will particularly target installations for multi-unit residential premises.
In separate announcements, the CEFC has also made A$13 million available to fund a 3.1MW expansion of the Uterne solar power station in Alice Springs, in the Northern Territory.
The new funding announcements come as the CEFC and other elements of Australia’s green energy policy framework face mounting pressure from the Abbott government.
Last week the Australian parliament voted to scrap the country’s carbon tax, seen as important mechanism in aiding Australia’s transition away from polluting forms of energy generation.
The CEFC itself is also facing possible abolition, with legislation currently working its way through parliament to scrap the body and the associated Australian Renewable Energy Agency.
Although the legislation faces opposition in the Australian Senate, Australia’s junior industry minister, Bob Baldwin, yesterday reportedly told a clean energy conference in Sydney that the government would press ahead regardless.
Local news outlet, Renew Economy, reported Baldwin as saying that the A$10 billion CEFC distorted the market and could not be afforded in an era of “budget emergency”.
However, the CEFC’s annual report, also published today, reveals that the body is continuing to deliver decent returns and leveraging A$2.20 for every A$1 it invests.
Yates said: “The CEFC invests for a positive return, with its investments presently expected to earn an average yield of approximately 7% which is more than 3.5% above the government’s cost of funds prevailing when the investments were made.
“Through this portfolio of 40 direct investments and a further 25 projects co-financed under aggregation partnerships, the CEFC is delivering abatement estimated at more than 4.2 million tonnes of CO2e p.a., with a benefit to the taxpayer of around A$2.40 per tonne of CO2e abated (net of government cost of borrowing).”