Bright Future

Citisolar

Citisolar is an all-Australian company with its head office in Brisbane. There is a purpose built facility here for its distribution business; the company also has branches in Townsville, Sydney, Melbourne and South Australia, a satellite operation in Tasmania, and an office in Perth planned for next January.

According to Managing Director, Mr Greg Catton, business is “very good.” He shares that Citisolar’s current annual turnover for the retail solar side of business is approximately $30 million. ‘Retail’ refers to the supply and installation of solar systems; the distribution and manufacturing business PGK, which is owned by the same three founders of Citisolar, is counted separately. It primarily produces circuit breakers and other similar items for solar systems.

Has the industry, previously dogged by complaints about products and practices that fell short of expectations, now cleaned itself up and become fully respectable? “From our point of view, that is the approach we have always taken,” Mr Catton responds, explaining that in any new industry there will be a correction period during which it has to mature. He believes that this is especially in situations where there is input from government, such as in this case, with federal stimulus packages and assistance to encourage people to embrace and utilise solar.

Citisolar offers only high-performance products which are at the premium end of the market. “We want to be around in 20 years,” explains Mr Catton. “We don’t want any comebacks, so we use the highest quality componentry and install using best practice, with high expectations from the design and performance of the resulting system.”

Mr Catton believes this philosophy is crucial in the company’s growth to “probably number two or three in Australia at the moment.” Citisolar dabbled recently in the nascent market for solar air conditioning, but he does not believe the time is yet right to promote this technology. His colleagues spend a lot of time in China looking for suitable new products or systems to bring to the Australian market, so solar air conditioning is definitely not something they have turned their back on. “But we do not want to simply supply something to make a profit. Our early research indicates that the technology on solar air conditioning products is not up to spec, so for the time being we will remain concentrated on supplying our PV [photovoltaic] systems to residential customers and SMEs, as well as hot water systems.”

Citisolar is just beginning to focus on LED lighting, though, as a complementary energy-saving and cost-effective technology to solar power. Swapping fluorescent or halogen globes for an LED solution makes a lot of economic sense, and after several years of working with its supplier in China, Citisolar now feels confident enough in the product to offer a three-year no questions replacement warranty. Mr Catton estimates that – if it continues along the curve of the initial demand the company is currently experiencing – the LED business could within a year or two account for a quarter of Citisolar’s turnover.

Citisolar offers its residential and business customers free analysis of the client’s entire power usage before putting forward a holistic solution to its requirements, which might include hot water, LEDs, and solar systems. This is the new and more responsible approach of the maturing solar industry – providing a proper solution rather than simply nailing a PV panel or two to the roof to get a subsidy. Mr Catton describes Citisolar’s approach as “very holistic,” and he believes in thinking globally when it comes to energy and power savings.

There needs to be flexibility in the suggested solutions, he says. Because solar energy is only generated during the day (great for business, much less so for residential), now that the tariffs have largely been taken away “you need a secondary solution to back up and substantiate the savings of a solar system so you get more for what you invest.” Citisolar is developing storage systems – hybrid inverter battery systems – that are suitable for a residential application and will provide in the region of 8-10kW of power very night in addition to its daytime output. The secret, and the challenge, is making such a system economically viable, and this point is just being reached.

“Hybrid battery systems are fantastic. Thinking for the future, with solar systems this is exactly where you need to be,” Mr Catton says. He calculates that there is a return on investment which is approximately double that of a solar system on its own. The latter takes about four years to pay back, while at present the hybrid battery system would take around eight – but with advances in technology coming thick and fast, the Citisolar team is confident that this length will soon be reduced substantially, and that the hybrid battery system is a great investment.

Short-term subsidies and tariffs used as inducements for people to install solar systems actually held the industry back and obstructed it from maturing, shares Mr Catton. Now people are buying from requirement or necessity – and because it actually makes sense. In the meantime, the solar units themselves have improved almost beyond recognition in their performance and durability, making the case overwhelming even with reduced support. Also, long-term thinkers such as Citisolar have now sorted out which of the many suppliers of panels and ancillary equipment – most but not all from China – are the ones whose performance can match the expectations; not just output per panel but panel and array durability have come a long way in the last five years or so. “In the last six years we have sourced from only two suppliers and we have experienced a failure rate of less than 0.1 of a percentage point. That is a huge benefit for us and one of the reasons why we win so many times in the marketplace.”

As everyone knows, the sun shines in Queensland nearly 365 days a year, but how strong is the argument in favour of solar in other, less blessed states? Mr Catton points out that one of Citisolar’s strongest markets right now is Tasmania. “The return on investment equation is slightly different, but there is still an amazing benefit to be gained from a solar system down there as well, just as in Northern Territory or Western Australia. The argument is pretty universal.” Residential business is strong, but demand from small to medium business is burgeoning, with fast-rising orders for systems in the 30-100kW range.

The message, Mr Catton says, is quite simple. “With the way the economy is, energy costs have become an important part of business. The non-human resource operating cost of a business is rising every day, and you have to look at those costs and find ways of reducing them.” He and his business partners operate several SMEs, and the cost of electricity for each of them has risen in the region of a thousand dollars per quarter. Is there a way to relieve yourself of some of that pain? The answer, he says, is to let his technicians come and examine your circumstances and check the bill. “If you have roof space, a solar system is a fantastic way to bring the cost down, feeding your own power into your own business.”

Another option is for Citisolar to carry out an energy audit to assess how many LEDs could save how many dollars in addition to the solar installation. Mr Catton is confident that his company can offer just about any company a better deal. “You can put any business in front of me and show me their operating cost. I can show them a way that they will save up to 25 per cent per year compared to what they are spending now. You can’t ignore figures like that.”

For more information about Citisolar, please visit http://www.citisolar.com.au.

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December 16, 2018, 3:55 PM AEDT