An untapped renewable energy opportunity

In partnership with Prological, the University of Wollongong Sustainable Buildings Research Centre’s new research reveals shrinking ROI periods for renewable generation can provide cost savings for businesses in brownfield and greenfield environments.

According to the Department of Industry, Science, Energy and Resources, over the next ten years, solar photovoltaic (PV) – solar energy which directly converts sunlight into electricity – is expected to grow at a rate of 58.7 per cent annually, with small scale rooftop solar to make up 90 per cent of that growth.

The push towards solar energy is happening, and its acceleration is imminent. Peter Jones, Founder and Managing Director at Prological, says that despite the overall trend in favour of sustainability technologies – particularly in residential environments – the industrial market remains the unloved child in this connection.  

Having seen his own son complete a Master of Research with Wollongong University’s Sustainable Building Research Centre (SBRC) – studying sustainability technologies in people’s homes – Peter wanted to further investigate how new energy opportunities might be applied in his world of manufacturing and warehouses. 

“Australia is a global leader in a lot of sustainability parameters, but it isn’t translating to the industrial market,” Peter says. “Through an innovative research approach, we wanted to develop a sustainability tool for clients to add to our design capability.” 

To conduct this research, Peter describes his search for an industrial unicorn: someone with the right background knowledge and expertise – but more importantly, the passion to uncover the cost parameters of the integration of renewable energy and storage technology for the Australian warehousing and industrial manufacturing sector.

Craig Pickup, Research Lead for the project, possesses these attributes, and has used his detailed findings to create real-world applications for businesses around the country. 

“We placed emphasis on economics from capital expenditure, OPEX [operating expenses] costs, replacement costs, determination of levelised cost of electricity (LOCE), simple and discounted payback, net present cost, and the future costs of renewable energy,” Craig says. “These elements combine to form a cost evaluation for a particular business, so they can more precisely determine the right time to make the switch to renewable energy.”

To be finalised in March 2022, the research has lead to the creation of an assessment tool that will allow businesses to evaluate commercial opportunities for improving energy efficiency through the application of various technologies.

“We are analysing the economic side of the installation versus the cost of energy from the grid,” Craig says. “Our expectation is that over time the battery and installation costs associated with solar will decrease, and the cost of energy from the grid will increase. Through our research we will be able to inform a company what will be the optimal year for investment in solar solutions depending on their energy usage – this could be anywhere between 2021 and 2030.” 

The right time for investment depends on the size of the solar system needed and cost of the grid power, as well as available rebates. Craig says a reduction in Solar PV installation costs is driving the uptake of renewable generation, with payback periods (ROI) for systems plummeting from 10-15 years to as little as two years in 2021/22 with typical financial ROI’s of between 2.5 and 4 years on large commercial systems; systems that will perform and deliver for 25 years plus.

The goal of the assessment tool is to allow a business to easily understand the financial costs and opportunities associated with investing in solar. Using national metering data from Australian Energy Regulator Smart meters, an entire year of metering is put into the analysis software. 

“With metering data from the site, billing information and a general understanding of how their energy is used, we can do an analysis on a ‘typical’ day as well as the peaks and troughs throughout an entire year,” Craig notes. “From this data, we can assert what the best and most cost-efficient renewable energy system is. Businesses will not need to go into the technical side of things, this tool will simply communicate whether it’s a better financial decision to invest now, or later.” 

To capture a rounded view of the industry, the research has looked at small to medium sized sites with 40 kilowatt systems, as well as larger 2500 kilowatt operations. Because a warehouse fluctuates in energy usage throughout the 24 hour cycle, Craig says different solar battery combinations can take advantage of excess solar generation for smaller warehouses. Batteries store unused energy from solar panels to use later, which is helpful in some warehouse contexts where operations can often run early in the morning and later in the afternoon, when the energy generation capability is lower than the middle of the day. 

“You want to try and harness these variances through battery technology,” he says. “So, we also do an assessment based on the different battery chemistries as well as the maintenance and installation costs to determine which year would also be a good investment for batteries to go with the solar panels.” 

Craig says the findings uncovered a flaw in government restrictions on the amount of solar energy businesses can export to a grid. The export limits change from state to state, but range from 15 to 30 kilowatts, meaning the solar PV systems can’t export more than that amount back to the electricity grid. In some instances, the facilities in the study’s solar capability had to be less than requirements because of such restraints. 

“Curtailed energy is lost energy which translates to lost profits,” he notes. “Ultimately, you’ve got to design the energy system to your minimum peak of energy consumption, which means you’re pulling power out of the grid for every day of the year a business is over its minimum. People are using sub-optimal systems on their roof or burning coal when there is a more efficient solution.”

Geoscience Australia recently found that Australia has the highest solar radiation per square metre of any continent and consequently some of the best solar energy resources in the world.

After a review of all the renewable energy solutions available, Craig’s research revealed that solar is the most viable option for renewable energy technology for medium-scale industrial and commercial facilities.

“We carried out a mass canvass on all the tech available in the renewable space but many of the solutions are not in the right market location,” he says. “Through our process we narrowed it down to something that is market-ready – and landed on solar.” 

While large-scale commercial and residential properties have started to explore solar power as a sustainable solution, medium-sized sites are yet to tap into these solutions, according to Craig.

“This is an under-researched and under-utilised area in Australia. There is lots of information on the (large) commercial side and the residential side, but for medium-scale facilities – solar is an opportunity,” he adds. “Commercial warehousing and distribution sites offer the perfect opportunity to utilise solar-powered energy, as they feature large flat surface areas on their rooftops and the operating times of these types of businesses are perfect to take advantage of the generation period of solar PV.”

Peter Jones notes that Prological, through this research and the securing of Craig within their team, have some of the most advanced sustainable energy assessment tools available. 

“This combined with 25 years of consulting experience enables Prological to support energy sustainability strategies,” he says. “This is about making a difference while creating advantages for those we work for.” 

For more information on Prological Consulting, click here. 


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