Energy Matters Forums

[heliox]

Hi there

I am actualy evaluating the solarmarket in Australia from a producers
perspective and I would like to get some input from any party interested
in the subject of photovoltaic solar power. BP closed their productionsite some
years ago - so why is there no production in a country with such a high
potential?

Rgds

[Tracker]

One Word .. .. .. .. CHINA

[DoctorI]

another word ...... Politics

[EnergyMatters]

Hi Heliox,

Aside from the issue of China, it has a lot to do with government support of the industry coupled with our reasonably small local market compared to countries such as the USA, Japan, China etc.

The Ernst and Young renewable energy "attractiveness" index can provide a little more insight:

http://www.ey.com/GL/en/Industries/Oil- ... ss-Indices

[zzsstt]

Australia is a relatively small market - we like to think we're big and important, but the entire country has about the same population as New York, or about 1.5 times that of London.

Australia (even if you stay on the edge of it) is so far away from anywhere that shipping costs become very high. When we are talking about importing the things we need, that is not important financially because we have no choice. For exports, however, it is an added cost that a manufacturer local to the market does not face.

Australia has very high labour costs compared to many of the so called developing countries. Add to that (let's be honest) a mass of employment regulations and a declining work ethic, and you have a massively higher cost of labour than in... CHINA!

It seems to be the belief in Australia that it is clever to make a quick buck by selling the raw materials to another country where cheap labour can be used to turn them in to products which Australia will then import. It is, however, unfortunately true that were those raw materials made into the final product in Australia, the various high labour costs and red-tape would likely mean they ended up costing three times as much....... also note that if for any reason this "rule" is not applied, the government seems to have no qualms about simply allowing a foreign company/government to buy the company producing those raw materials, hence further reducing local prosperity.

[470rigby]

Just ask BP SOLAR why they took all that Australian developed PV technology offshore to CHINA!

[heliox]

Australia is a relatively small market - we like to think we're big and important, but the entire country has about the same population as New York, or about 1.5 times that of London.

Australia (even if you stay on the edge of it) is so far away from anywhere that shipping costs become very high. When we are talking about importing the things we need, that is not important financially because we have no choice. For exports, however, it is an added cost that a manufacturer local to the market does not face.

Australia has very high labour costs compared to many of the so called developing countries. Add to that (let's be honest) a mass of employment regulations and a declining work ethic, and you have a massively higher cost of labour than in... CHINA!

It seems to be the belief in Australia that it is clever to make a quick buck by selling the raw materials to another country where cheap labour can be used to turn them in to products which Australia will then import. It is, however, unfortunately true that were those raw materials made into the final product in Australia, the various high labour costs and red-tape would likely mean they ended up costing three times as much....... also note that if for any reason this "rule" is not applied, the government seems to have no qualms about simply allowing a foreign company/government to buy the company producing those raw materials, hence further reducing local prosperity.

Thanks for your inputs - but the size of Australia cannot be an issue. I am coming from Switzerland (2.5 times smaller than Australia and 1/2 the average sunshine) and we have dozens of companies there producing either solar cells, panels or equipment related to solar power with big success. Switzerland has no raw material at all (I think snow does not count as such...) and the labor costs are about 1.3 times higher as in Australia. As the know how and a certain commitment are there (see Australien Solar Institute) I still see no point why there is not one single company investing in "proudly australian made" solar cells. There is a certain interest from european producers to transfer know how for a production in Australia - so I will continue to collect all aspects - thanks again!

[zzsstt]

Thanks for your inputs - but the size of Australia cannot be an issue. I am coming from Switzerland (2.5 times smaller than Australia and 1/2 the average sunshine) and we have dozens of companies there producing either solar cells, panels or equipment related to solar power with big success.

Are the solar panels that are produced in Switzerland sold there, or exported? If they are sold there, how are they priced compared to imported modules? I have not studied Switzerland in any detail (though I used to work in Basel from time to time), so I have no idea about your import duties etc., but that would be a good place to start checking. For example, a quick search shows a Sunpower 225W panel in Australia retails for about 1750CHF (AU$1850), where that panel in Switzerland (from "go Solar") is listed at 2250CHF. That's a 28% price increase over the Australian price. Some of that could be transport costs, but where does the rest come from?

The basic issue is that a panel made in Australia would be very expensive if exported to another country, and whether sold locally or exported it would have to compete with Asian panels made with far lower labour costs. Australia has very little price protection for it's own producers, unlike the USA and Europe, and there are few import restrictions or subsidies to local industry. This makes it hard for local producers to compete with imports.

[herorod]

heliox
Ihave been looking at manufacturing solar panels in australia too i would be very interested in shareing information with you or anyone else with some knowledge or experience in this matter
my email is herorod@hotmail.com
thanx for any help

[heliox]

Thanks for your inputs - but the size of Australia cannot be an issue. I am coming from Switzerland (2.5 times smaller than Australia and 1/2 the average sunshine) and we have dozens of companies there producing either solar cells, panels or equipment related to solar power with big success.

Are the solar panels that are produced in Switzerland sold there, or exported? If they are sold there, how are they priced compared to imported modules? I have not studied Switzerland in any detail (though I used to work in Basel from time to time), so I have no idea about your import duties etc., but that would be a good place to start checking. For example, a quick search shows a Sunpower 225W panel in Australia retails for about 1750CHF (AU$1850), where that panel in Switzerland (from "go Solar") is listed at 2250CHF. That's a 28% price increase over the Australian price. Some of that could be transport costs, but where does the rest come from?

The basic issue is that a panel made in Australia would be very expensive if exported to another country, and whether sold locally or exported it would have to compete with Asian panels made with far lower labour costs. Australia has very little price protection for it's own producers, unlike the USA and Europe, and there are few import restrictions or subsidies to local industry. This makes it hard for local producers to compete with imports.

The prices quoted depend on the rate of exchange, duties, the transportcosts and the rebates you can negotiate. Sunpower are the most expensive of the silikon mono panels you can purchase (due to high efficient back contact cells).Transportcosts (Switzerland has not sea port) and duty (Sunpower is produced on the Pilipines) as well as higher margins by the traders make the prices for these panels high. The panels & equipment produced in Switzerland (Flexcell, Oerlikon etc.) and Germany (where the costs are almost similar) are sold on the local marked as well as exported. Concerning Switzerland 80% of all solar equipment produced is exported mainly to the european market. As production in all thoses sectors is higly automatised anyway, labor costs cannot be the main issue - sometimes its just the easy way to make good money without taking financial or operational risks. As transportation costs as well as energy costs will dramaticaly increase in the future it just is not a future orientated strategy to export all production. I am still looking for the real valid arguments for not producing in Australia. As long as New Zealand can export butter to Europe and Australia imports f.e. lemons from the US I am still not convinced by all the mentioned arguments. For a highly automatised assemling line of conventional silicon solar panels we are talking about a reasonable small amount to be invested for a marked (Australia, New Zealand & some smaller countries in the area) which is not that small an will increase due to massive rise of energy prices.