Solar powered industry—necessary, but is it viable yet?

Solar powered industry—necessary, but is it viable yet?

  • Industry Type: Industrial Manufacturing, Warehousing, Offices, Refurbishment, Food Processing, Distribution
  • Author: Steve Christie
  • Service Area: Advice
  • Date: 26 Jul 2011

It is no secret that electricity costs will continue to rise due to necessary infrastructure investment and carbon taxes.  As this continues, manufacturers look at ways to save energy and less costly alternatives to electricity from the supply grid. 

The question is sometimes asked at the time of designing a new factory whether solar electricity can be considered.  For many years solar has been an unrealistic alternative for industrial applications due to its high capital cost and limitations of day time and sunny days.

There have been some public announcements recently with Schweppes installing solar panels on their Sydney factory to produce 100kW being fed back to the grid.  Adelaide showgrounds has just completed a 1MW solar project. 

To put these facts into perspective, 100kW may run your office air conditioning, and unless you are a large manufacturer with high heating and cooling requirements, 1MW is probably more energy than you would need.

It is important to understand that these types of solar installations are not occurring for financial reasons.  The Adelaide showgrounds solar project involves 9,239m2 of solar panels at a cost of $8,000,000. 

The system is estimated to produce 1,400MWh per annum which gives a saving of around $126,000pa.  A further $46,000 will be gained through Renewable Energy Credits (REC). 

The payback period is expected to be less than 20 years, depending on how quickly electricity costs rise.  Compare this with food manufacturers typically looking for a payback in less than 2 or 3 years.  This demonstrates the fact that the reason is not for financial payback. 

The technology may not be viable at present unless there are special circumstances.  Solar would be a great asset for an eco-resort in a remote location and a lower cost for power than a diesel generator.  The financial viability for larger installations is changing quickly as the technology reduces in cost and electricity rises in cost. 


Solar thermal
Solar energy can be split into two technologies, solar thermal and photovoltaic.  Solar thermal is where the heat from the sun is used as an energy source for making hot water or steam.  This heat can be used directly in your manufacturing process or converted to electricity using conventional steam turbines.

It usually requires a large collection system such as a dish or a mirror array shining back to a heat collection system. The heat requirements for food and beverage facilities are often very large and continuous and this is not well suited to solar. 

A backup source of heat for night time and cloudy days would be required.  Although there are energy storage systems such as molten salt available, they are more suited to centralised large scale installations. 

It is difficult for solar thermal to compete with lower cost alternatives such as coal ($3/GJ) and gas ($9/GJ).  The ETS (Emission Trading Scheme) may change the cost structure and increase the cost of carbon based energy, however at present solar is more capital intensive.

Solar thermal is suited to facilities with smaller energy requirements, particularly hot water where it is easy to store enough to last a few days.  Electricity on the other hand is not cheap ($27/GJ, $0.10/kWh) and is becoming more expensive. 

There are a number of technologies for converting sunlight directly into electricity.  The most common is the photovoltaic cell. These are extremely reliable, have a 25 year guaranteed life and require minimal maintenance.

The main issue with this technology has been the cost.  The cost is still prohibitive on a purely financial basis when a good grid supply is available. 

This is changing quickly and various government programs are making it more attractive.  Due to a combination of the GFC and global capacity, the cost of silicon (the main component in photovoltaic solar cells) has dropped 40% in the last year.

The following graphs show the relative costs for electricity now and the projected costs in 2025.  In this time frame, photovoltaic power moves strongly into a viable cost range. 

Australia is at the forefront of solar development.  One Australian company, Dyesol, is taking on the world with a very low cost solar cell that can be bonded to steel (like Colorbond) or glass and will be incorporated into the fabric of buildings.  The first commercial quantities are only 2 to 5 years away.

Australia has world class research teams and has trained key executives in the largest Chinese solar panel manufacturers.  Unfortunately we haven’t been able to turn this world beating technology into substantial profits.

The world photovoltaic solar panel industry is growing at 5,300MW per year with Australia accounting for only 60-70MW per year.  Germany is the stand out success with 2000MW installed each year.  Many countries, including Australia, have Government programs to encourage solar uptake with REC for sale and special purchase tariffs for the power.

There is mounting pressure to encourage the application of solar power.  Australia is ideally situated to benefit from this fast growing industry with innovative minds, substantial sunlight and vast tracts of unproductive land.

There is a developing market for photovoltaic solar power in industries that are not power hungry and are able to capitalise on their green credentials.  Unfortunately for many food and beverage manufacturers their processes are power hungry, particularly where processes include cooking and cooling and though—cooking can be achieved with gas, cooling requires electricity. 

More installations are being completed where companies want to clearly demonstrate their environmental policy and be seen to be doing the right thing.  As the cost per watt drops more applications will become viable. Solar is already a good solution for replacement of diesel generation in remote areas and it is fast approaching the point where it can be considered as an alternative to costly grid upgrades.

Solar photovoltaic power is currently big business at a residential level and with the expected cell price reductions it will soon make the move into the industrial area.
About the author
Steve Christie is the Director of Process Engineering at Wiley and can be contacted on 1300 385 988 or email

Further Information
Wiki page on solar cell technology

This article was published in Food & Drink Business Magazine.

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