Sustainable Energy Innovation A New Era in Solar

Sustainable Energy Innovation A New Era in Solar Dominic Drenen – Manager Solar Energy Systems

Renewable Energy • As an organisation Origin Energy has a strong commitment to ‘Clean Energy Solutions’ • We operate businesses providing/supplying the following: – Environmental Refrigerants – Cogeneration – Wind power – Natural Gas for Vehicles – Geoexchange – Energy efficiency consulting 2

‘Sustainable Energy Innovation’ Proudly sponsored by Origin Energy 3

Origin Energy and Solar • From a distributed power perspective, solar is the leading option. • Research and Development – ANU – solar module development with objectives of increased efficiency and reduced cost. Total investment in approx. $4 million to date, pilot plant early 2003. – AES – grid connect inverter objective of reduced cost. Total investment approx. $2. 5 million, prototypes being developed bench testing/field testing 3 rd quarter 2002. • In advance of having access to our own technology we have entered the retail market as a provider of grid connected solar systems. 4

Consumer preference is clearly biased towards clean and green Support Strongly Support % Hydro Oppose Landfill Gas Forest Waste Coal Geo Therm Natural Gas Solar Wind Nuclear Source: SMUD – Sacramento Municipal Utility District, March 1997 5

Origin Energy’s Solar Offer • Offer a comprehensive range of sizes (450 watt plus). • Facilitate the completion of all documentation for the customer. • Competitive buy back rate for electricity exported back to the grid (28 c/k. Wh). • Free consultation and energy advice. • Competitive pricing through Origin Energy's buying power. • Access to approved Australian Greenhouse Office installers. • Extended warranty (panels have a 20 year warranty and an expected useful life of 30 years+). • More than 140 years of experience in the energy business. 6

What are the costs? • Installed prices for solar systems in Australia are currently running at ~$16/watt. • The AGO PVRP provides a rebate of $5/watt, giving the customer an effective price of ~$11/watt. Return on investment for a 1500 watt system: Capital cost: $14, 000 Return: 2, 200 k. Wh * 14 c/k. Wh = $308 ROI: $308/$14, 000 = 2% (tax free!) 7

Solar Installation 8

The price of silicon has only slightly decreased in the last decade This is expected because PV uses waste from semiconductor production (PV uses ~10% of total) and therefore cumulative volume much larger and annual cost reduction smaller All prices in US$2002 Source: Silicon study by Walarian Kipiniak 9

Approved Applications by State Up to Jan 2000 Oct 2001 10

Current Market size • Up to January 2002 the total number of installed grid connected solar units across Australia was 900. • The average installation size is 1 k. W and therefore the annual national grid connect solar contribution is estimated at 1. 5 GWh. 11

Market Segments • Two distinct market segments: – Retrofit (installing a solar energy system on an existing house), customers reached through: – Yellow Pages, mail outs, advertorials, web page, trade shows, bill inserts, Origin Energy shops. – Range of businesses servicing this market – including Origin Energy. – New Homes, (installing a specific solar package incorporated into the house design), customers reached trough: – Major developers, architects, eco developers, councils. – No supplier servicing this market. 12

Developer Package • Origin Energy has developed a 450 watt grid connect solar system specifically for new home builders. • After rebate installed price of just over $3, 000 or ~$6. 70/watt. • Can get to this price through a combination of: – Scale – multiple sales to one customer. – System installation during construction. – Significantly easier approval process reduces cost. 13

Developer Package • The following developers are now beginning to offer an Origin Energy solar system option to their customers: – Australand Homes – Henley Homes – Metricon Homes • Origin Energy is confident that the uptake by developers of this streamlined solar energy package will result in a quantum increase in solar installations, heralding a new era in Solar. 14