Australia’s only solar panel maker, Tindo Solar in South Australia, has invested millions in a new factory and production line in hopes of producing enough panels to meet the growing demand for panels made in Australia. Twenty years ago Australia had a booming solar power manufacturing industry, but it was short lived. China now accounts for around 70% of global solar panel production, compared to Australia’s sad 0.3% share. However, with the announcement of a tightening of supply in China, could local manufacturing offer a lucrative opportunity and a long-term solution for security of supply?
The solar boom in China, an “Australian initiative”
Every day of the year, Australia installs around 1,000 solar systems on the roofs; representing billions of dollars spent on silicon, glass and some metal. Considering the immense local demand and the availability of raw materials necessary for the production of panels, why is Australia so little player in the solar game?
In the late 1990s, the BP Solar factory in Homebush, Sydney, was in full swing. At the time, it was the largest solar plant in the southern hemisphere, serving the Australian domestic market and exporting to Southeast Asia.
Australia was also at the forefront of solar photovoltaic research, with the University of New South Wales (UNSW) photovoltaic research team breaking solar cell efficiency records.
A few years later, the plant was closed, and UNSW’s brightest minds in solar PV had left the country to set up China’s first solar PV plants.
Where have we lost our way? As with most businesses gone bad, a lot of it comes down to the simple economics.
Shi Zhengrong, a foreign exchange researcher who was part of the UNSW photovoltaic research team, decided to return to China to found a solar energy manufacturing company, Suntech.
At the time, China did not produce any solar panels.
âI’ve been asked many times, why did I start the business in China, not Australia? Dr Shi said.
âWhen I was in Australia, I was just an academic and a student. I didn’t really have the confidence to run a business there. In addition, the cost of labor in Australia is quite high.
The punt paid off. In 2005, Suntech was listed on the New York Stock Exchange and raised $ 420 million, making Dr. Shi a billionaire.
The move had a snowballing effect, with other UNSW graduates following in Dr Shi’s footsteps and moving to China to start their own solar plants at a much cheaper cost than in Australia.
With the American investments that followed soon after, China was quick to grow into the solar superpower that it is today, leaving local manufacturing to virtually wiped out.
Covid-19 Boosts Sales of Locally Made Panels
The global economy has experienced a major upheaval due to Covid-19 and the solar panel industry is no exception. Speaking to The Advertiser, Tindo CEO Shayne Jaenisch said the advent of Covid-19 has catalyzed an increase in consumer demand for products made in Australia, including solar panels.
âWe have had consumers contacting us from all over Australia saying they want to buy Australian made,â he said. âWe had record sales.
Mr Jaenisch sees this as a lucrative opportunity for local manufacturing and hopes to build a network of local suppliers so that every component of the solar panel system is made in Australia.
âCovid has taught us all a valuable lesson, that we are too dependent on imports from overseas, especially from China,â he said.
Looming solar panel supply crisis
Australia is currently facing a shortage of solar panels, with many factors at play. These include shortages of the main raw materials for solar panels (namely polysilicon, steel, aluminum and copper. ), high shipping costs and China’s energy crisis, which is forcing panel makers to shut down production to cut emissions.
This shortage has already pushed up prices significantly in the United States and parts of Asia, and is starting to have the same effect in Australia.
With the growing demand for panels made in Australia and the looming supply crisis in China, we might envision the perfect opportunity for a resurgence in local panel manufacturing.
“We want to bring back more manufacturing, not just solar panels, but upstream manufacturing of everything from our glass to our cells to our frame,” said Jaenisch.
âWe are pushing for upstream manufacturing to come back, so that we can have sovereignty and have the ability to employ more Australians and be less dependent on overseas.
“We have all the raw materials here, we should make whatever goes into a solar panel.”
We are already starting to see some activity in local solar energy manufacturing. As recently as last week, Fortescue Metals, one of Australia’s largest mining companies, announced it was undertaking a feasibility study on building an Australian plant for unique photovoltaic technology.
Beat the panel price hike
With summer approaching and the threat of a general price hike, there is no time like the present to invest in solar energy.
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