Author: Sarah Morton
Two organisations teamed up to establish a bulk-buy for solar panels, and enable both communities to benefit from Federal Government rebate schemes.
Project overview
The Strathfieldsaye and Districts Community Enterprise (SDCE)’s Sustainable Strathfiedsaye sub-committee started a solar photovoltaic (PV) bulk-buy in partnership with the Bendigo Sustainability Group (BSG) during 2008 and 2009. The Sustainable Strathfieldsaye sub-committee was set up in 2007. The BSG has also been going since around 2007 and is made up of residents local to Bendigo in central Victoria.
One of the initial goals of the SDCE sub-committee was to establish a bulk-buy program of solar panels for the Strathfieldsaye community, to help the local community benefit from the Federal Government rebate. When the BSG formed, the SDCE subcommittee approached them with an offer to partner in the program and roll it out across all of Bendigo. The partnership increased the bulk-buying potential of the groups at a time when the rebate eligibility had just been restricted, thereby reducing the potential market for uptake in the program.
Appointing the suppliers
The SDCE sub-committee wrote a specification document, calling for Expressions of Interest (EOIs). The sub-committee invited submissions from a range of suppliers of solar PV systems and went through a detailed assessment process. They asked them to respond to a series of questions on features such as cost, warranties, workforce, location and equipment. Approximately half of the suppliers they contacted provided a quote.
The group had set criteria to help them evaluate the various submissions, the key ones being:
- the cost of a 1 kW system
- the capacity of the contractor to undertake the work of a bulk installation
- whether the company was local
- the reliability of the system
- the surrender of Renewable Energy Certificates (RECs) to the organising group.
The group chose Energy Matters based upon their capacity to take on a bulk-buy roll out, the quality of the system, the price for that quality, and their willingness to collect REC payments on behalf of the SDCE and BSG. Other companies had come in with cheaper costs, but the group felt the panels were not such high quality and that those programs did not benefit the organising groups.
The bulk-buy product
Two solar power products were offered under the bulk-buy program: a Suntech one kilowatt (kW) system and a Sharp 1.26 kW system. The prices for each system varied slightly during the program. The standard prices quoted were based on a ‘standard rooftop’ – a tin roof with pitch between 15 and 35 degrees and generally north-facing. Each installation was subject to a detailed site analysis to assess any variations from the standard. Variations were then negotiated prior to a formal agreement between Energy Matters and the landowner. Each landowner needed to pay a $1,000 deposit to secure their installation.
While there was a general expectation of an approximate number of installations, the system prices quoted by the supplier did not depend on a certain number.
The role of the community groups
The community groups:
- sought out and chose an offer
- marketed the offer
- provided information on the offer and the technology.
All other roles such as financing, rebate administration, sourcing products and installations were the responsibility of the supplier, Energy Matters.
Recruiting participants
The groups exchanged information in a number of ways:
- information nights
- websites
- group networks
- community information stalls at festivals.
A website was set up where people could register their interest. This received around 350 EOIs from people wanting more information about the program. These contact details were passed to Energy Matters, whose role it was to follow them up. Of these, over a third proceeded to installation.
Managing risk
The community groups chose a fairly ‘hands-off’ approach in order to minimise their risk. They also lacked the necessary resources to take on additional responsibility. They understood that in taking this decision, they were unlikely to achieve the highest possible discount. Risk was also managed by:
- ensuring the groups had appropriate insurance
- being careful about the verbal advice they gave
- ensuring the supplier workforce was appropriately accredited.
Financing and RECs
The supplier, Energy Matters, carried the cost of the rebate as a ‘point-of-sale’ discount, so participants only needed to pay the balance once their system was installed.
A criterion for being involved in the program was that participants surrendered their entitlement to the Renewable Energy Certificates (RECs) to the supplier. The supplier donated the value of the RECs to the SDCE, to invest back into other local community projects. Alternatively, participants could donate 50% of the value to the BSG or Bendigo and Northern Districts Community Enterprise Ltd.
Outcomes
In total, 125 houses received a solar power system at a discounted rate.
Lessons from this bulk-buy
This project taught the group several important lessons, which are relevant to other bulk-buy projects:
- Think about future system maintenance and service, when you choose a supplier.
- Promoting, marketing and providing information can be very time consuming.
- When making verbal agreements and agreeing contracts, be very clear about how the supplier will manage price fluctuations (in products and RECs). For example, are the prices quoted locked in or subject to variation?
- Total recruitment numbers depend on marketing efforts.
- Consider charging a small fixed commission, which allows you to do more marketing and take on more roles within the project.
- There is merit to fixed project lengths. Further projects can follow on if demand is not fully met.
Further projects
BSG has undertaken a solar water heater bulk-buy and another solar power bulk-buy.
Related articles
Establishing a bulk-buy program