Author: Alicia Webb
Contributor: Shane Melotte
If a solar park seems like the right project for your community, then it's time to begin the pre-feasibility investigations. This is a process of research and investigation into the various aspects of building a solar park. This article describes the types of issues that need consideration.
At the end of this phase, you can write a pre-feasibility report which will eventually form part of the business case for your project as it develops.
Identifying sites
The two most important things to consider at the first stage of pre-feasibility are grid access and land availability. Start with these two criteria to narrow down some sites for consideration.
Grid connection
Start by finding out where the electricity distribution lines run in your area. If you have a large, detailed map, sometimes electrical infrastructure will be shown on it. If not, you might be able to query your local Distribution Network Service Provider (DNSP).
Distribution companies generally control a specific region, and it's worth finding out which company manages distribution in your area.
Community solar parks of between 100 kW and 2 MW will usually connect to 22kV or 33kV lines. The best sites are those closest to the electricity distribution line and not too far from a town, which will use the power generated by the solar park. The closer the power 'load' (the town) is to the generation source, the less power is lost in moving it around.
The voltage of the lines can be confirmed with the DNSP who are responsible for maintaining lines and for approving any changes such as new connections to these lines. Grid connection is a complex business and some locations are better than others due to the configuration of infrastructure like substations. Some DNSPs will actually provide advice on the suitability of connecting a solar park to various locations on the grid. It's worth giving your DNSP a call and having a chat about your idea.
Further down the track you may need to engage an expert consultant to provide cost estimates for grid connection. There is a separate article on Grid connection in the Wind Farm feasibility section.
Land availability
The best sites for community solar parks are sites that can be had cheaply, which means they can be donated or leased for very little. A good place to start is to consider if your area has any:
- large roofspace
- disused industrial/commercial space
- degraded, disused farmland
- council land that the council can donate
Solar parks generally require a large, fairly flat area of land. Solar PV technology requires between 1.5 and 3.5 hectares of flat land per MW installed depending on the technology and configuration of the project. Although the area doesn't have to be completely flat, it is worth considering the direction of any gradient. A north facing hillside, for example, will receive more solar exposure than a south facing hillside.
It is important to consider how any building or vegetation may reduce the ‘solar access’ to the site through shadowing. There are technologies of varying sophistication and cost that can help with this analysis however selecting a site where these impacts are minimal is an excellent start.
At the pre-feasibility stage it is typically good to look for land that has limited environmental, social and economic values. This are covered in more detail in the Non-technical investigations below.
Once you have identified some sites, get in contact with the owners or managers of the sites and begin talking to them about your idea.
Technical investigations
Once you have in mind a site (or sites) with space, a favourable owner, and access to the grid, you need to begin investigating their potential. Below is some information on what to look out for.
Solar Resource
The output of solar panels depends on lots of factors including the number of hours of daylight at your site, the number of hours of cloud cover at your site, and the angle of the sun in the sky. All of these factors are usually simplified into a number called 'insolation' which is a measure of solar radiation energy received on a given surface area in a given time.
A good source for insolation data is the Bureau of Meteorology (BoM). The website contains a specific section about solar exposure which starts with a large general map of Australia, with annual average solar exposure. A daily solar exposure map can also be viewed.
The value mapped is megajoules per square meter, or MJ/m^2^. This value will eventually feed in to your calculations for energy output of your plant. You can even see daily solar exposure.
You can also view solar radiation data near your region by looking at data from one of the Bureau's automatic weather stations. This page has a drop down menu where you can select 'solar radiation', and identify the weather station closest to your town or region.
Technology review
It's important that you have an understanding of the types of solar technologies that could be used as a part of your project. Each type of technology will have different costs and benefits associated with them. Some of the most common solar panel technologies include monocrystalline, polycrystalline, and thin film.
In addition, it is worth considering different mounting configurations. Some solar parks are mounted on fixed panels such that their angle does not change with the season or the time of day. Other solar parks have tracking technology whereby they change position in order to maximise their surface area which points to the sun. Tracking technology varies too, in terms of how many degrees of freedom the panels have and how fast they can track.
Finally there are some technologies that use either mirrors or a lens to increase the concentration or amount of sunlight onto a solar panel or cell.
The best way to investigate the technologies that are available is to speak to companies that have built solar parks before.
Energy predictions
Having investigated the different technologies and the solar exposure or insolation at your site, you can consider the energy output that you can expect from different sized projects.
Non-technical investigations
Development application requirements
Your solar park will require planning approvals, usually from the local government. It's important to investigate planning controls that apply to solar park projects at the local, state and federal level.
This will often include consideration of the environmental, cultural heritage and planning rules. Consideration of these issues by the relevant authorities can sometimes be integrated and sometimes considered separately.
Visual impact
You will need to consider the visibility of the solar park from houses, towns and roads. Most ground-mounted solar parks are lower than the tree line so visual impact is limited compared to other energy generation infrastructure. However, you will still need to investigate how many houses are close to the project that will have views of the project.
Regarding visual impact on roads, the major issue surrounding a solar park will be the reflection of light into the path of traffic.
Traffic
It is good to start thinking about any immediately obvious traffic impacts the project may have during construction or road upgrades that may be required to enable construction to proceed. Talking with you local Council and State road authority will help these issues.
Noise
An operating solar park does not emit significant noise, however the construction phase may be noisy. It is important to investigate local noise-sensitive areas like schools, hospitals and churches.
Ultimately the company responsible for construction of the project will need to confirm the local noise control laws for construction sites with the local Council.
Flora and fauna
For any development, it is important to investigate endangered or protected species in the vicinity of the site. Some internet searching may help you locate areas of significant biodiversity, which may impact your ability to develop a solar park. The Environmental Protection and Biodiversity Conservation (EPBC) website is a good place to do some searches for endangered or protected species in your area.
It's a good idea to call the local council and ask
- if there are any local flora and fauna species treasured by the local community, for example wedge-tailed eagles or brolgas
- if any areas within the site are subject to flooding or waterways
The local Council may refer you to the local branch of the State environment department who will have further information about the local issues and/or advice on what issues may require further investigation.
Cultural heritage
It's important to know about areas of important cultural heritage near your site. Speaking to the local aboriginal community is invaluable. Your state representative body for aboriginal culture will have a register of important sites.
Project economics
Determining the economic viability of your project is quite a complex process. The central issues for consideration will be the capital cost of your plant, the predicted energy output of your plant, and the price you can charge for that output. Because solar technology is more expensive than traditional centralised generation it is likely that you will need to attract a power purchase price that is above the market rate.
Generally, determining project viability involves modelling various project scenarios including different financing structures, future energy prices, and the changing political landscape.
Development cost
Costs associated with designing the plant and undertaking all of the impact assessments related to planning requirements can cost around 5% of your total project budget. Generally they will involve:
- site identification and procurement
- feasibility studies and detailed assessments
- development application costs
- project management
Capital cost
The capital cost of a solar farm fall into two broad categories; the solar panels and the 'balance of system'. Solar panels or modules will typically account for around 60% of the total capital cost, with the balance of system costing the remaining 40% although this is getting closer to 50/50%. Balance of system components are:
- mounting racks and foundations
- electricals and control systems
- inverters
- site preparation
- installation
- grid connection
The best way to go about investigating the capital cost of building a solar park is to speak with those who have done it before, or those who have already put together proposals to undertake a similar project.
You could also enquire with companies that sell rooftop solar systems.
As a very broad rule of thumb, you could assume a cost of $5,000 per kW of installed solar capacity. This means that a 1 MW solar park would cost around $5 million. Residential scale PV installations are currently available in Australia at between approximately $4,500 and $6,500 per kW installed.
Community-owned project establishment costs
These are the costs associated with building the project around the physical generation plant. These will typically include:
- community engagement
- establishment of your community-ownership structure
- creation of a share offer document
- fundraising and administration
Operational costs
The ongoing costs of your project will typically include:
- Cleaning of panels
- Maintenance of electricals
- Replacement of parts
- Staff costs
- Office rent and equipment
Electricity sales revenue
The components which will contribute to the price of electricity will be:
- Market price of power
- Price of Renewable Energy Certificates (RECs)
Market price of power
The market price of power varies according to demand and is also dependent on location. The Australian Electricity Market Operator (AEMO) has a website showing price and demand data here.
RECs
The sale of RECs provides an additional revenue stream for the solar park. One REC is produced for each MWh of electricity produced. RECs are a tradable item with a speculative value. RECs are designed to represent the price difference between 1MWh of renewable electricity and 1 MWh of non-renewable electricity.
If policy such as the carbon tax causes the price of non-renewable electricity to rise, it is expected that the REC price will drop.
Future energy price scenarios
This section involves making predictions about the future cost of electricity. Various government policy and big picture social changes will dictate changes in electricity price. An example is the 2012 introduction of a carbon tax. Most economists agree that society’s move away from carbon-intensive fossil fuel based power generation will result in a rising cost of energy. How much will have a huge effect on the economics of your solar park project.
Grants and other revenue
As solar parks are inevitably more expensive that traditional fossil-fuel based generation technologies, it is normal that a grant will be required to make a project economically viable. Investigate various funding options that fall under local, state and federal government agencies.
It is a good idea to get creative and consider funding options like corporate sponsorship in the form of advertising or naming rights.
Levelised cost of energy
The levelised cost of energy refers to the price per MWh in today’s dollars that your project will need to sell energy for in order to break even. It’s a good idea to run an economic model using several scenarios to work out the different levelised cost of energy for each. Scenarios might include different project capacities, different levels of grants, different PPAs, different rates of return to shareholders, etc.