pv magazine: Senec was acquired by EnBW, one of Germany’s larger utilities, in March. What vision does EnBW have for Senec and how have things changed for its approach to expanding into Australia?
We’ve coined the phrase, that Senec will become the ‘modular tool box’ of EnBW across all sorts of residential and PV offerings. In the past, EnBW had the solar+ offering in Germany, that was marketing directly to consumers. That [solar+] is now operating through the Senec retail chain and we are making a lot of effort to be able to have the different processes in place to support different brands and different kinds of offerings, but through our value chain.
Why did EnBW discontinue the solar+ scheme as it was?
One of Senec’s key USPs and one of our most important assets in the German market is our retailers and our retail network in the German market, which is able to fulfil and install anywhere in the country. Selling and customizing through them scales better than a standardized product.
The solar+ brand still exists, but now it is being managed through our resellers.
How do things differ in the Australian market?
It looks like Australia is where Germany was five or six years ago, in terms of the maturity of the market. We are seeing significant activity in the market. Also, if you look at how PV has been sold in the past, the price points that people are looking at, the payback periods, the [Australian] market is different. And right now, we are looking at our strategy for internationalisation, and how we can best serve the needs of the Australian customers.
What is definitely clear is that we are taking the same approach to the retail network. We are going to be the partners of the retailers, to protect them, give them a very good margin and make sure we’ve got a strong network there.
On the other side and where it differs, is that in Germany with EnBW we are already part of an ecosystem. For example, we can offer our ‘Cloud’ service and our ‘Cloud To Go’ – where you can charge [your EV] based on your electricity product where you are. But in Australia, we are not yet there with those offerings. We will probably look into that, but for now it is really about providing the right battery storage solution and selling it into the residential market and moving that through our retail network.
How big of a challenge is price in the Australian market? I suppose, that’s a delicate was of saying that often in the Australian market, the consumer is used to getting pretty cheap solar. How difficult is that to tackle, in particular bringing a European assembled product?
I wouldn’t say that it is difficult. There is certainly a group of people in Australia who admire German branded companies – like Bosch, Siemens, Miele are well known brands. The same goes for cars, where people are wiling to pay for German quality. I think the problem is more the PV price point of the past, and then the household consumption, the PV installations are basically significantly undersized. So, there isn’t the capacity on the roof needed for the [household electricity] consumption.
Then looking at the price point of that capacity, if you add a battery that doubles to triples the price of the [solar+storage] array. That dynamic is changing as people get more experience, but with the battery subsidy schemes, all of a sudden it makes sense to retrofit a battery and also to install a battery with the initial solar install.
Talking of subsidies, my impression is that this is what solar was 10 years ago in Australia, where there were huge state-based FITs. If feels to me that the state governments are now looking at storage as an opportunity to introduce new subsidies as batteries are at an early stage of deployment.
I expect more such subsidies to come. And it is very clear that the grid situation is very different to that in Germany – and that will drive some of this change.
You mention grid, how much is backup power a driver in Australia?
We are not a supplier of offgrid systems, but we do offer backup power. We clearly see that it seems to be an important sales argument than in Germany – where there simply are no outages.
Cloud To Go does sound interesting. How else are you engaging with the e-mobility space?
Firstly, Australia is not just one market, it is many different markets. Simply the fact that households can have one, two or three-phase, we are one of the only suppliers that can offer all three. As I understand it, we are one of the only suppliers that can supply all three. So, it is basically a case of getting that known in the market and by communicating it more clearly.
What we see in Germany is that as people start to think about EVs, they are not jumping onto EVs straight away. And they are thinking about PV and storage at that point in time when they consider this [purchasing an EV]. Often PV and storage comes first, and then EV comes later. This takes the experience of Germany, where we are partnering with EnBW and their full offering. I am quite certain that we will bring some of those offerings to Australia, but it is a case of one step at a time, focusing on getting the installations up in Australia.
Some of the electricity retailers like AGL are very involved in solar. Are you looking at some utilities – given you have the backing of a utility player yourself, in the form EnBW?
It really does look like we are. We know that we have the right skills and backup in our company. We are not in startup mode. We have very professional backing and we’re changing some of the structure within the company. As we move into Australia, we will look at utility tenders and things like that. And we really have the skills to back things like this up, because of the EnBW backing and structure – we’re not just winging it.
Since EnBW took over, what has been happening for Senec in Germany these last months?
The first phase was getting the next generation, the Senec 2.1 out into the German market – changing the product and expanding the warranty. This has put us back into a position where we are gaining market share. Now we are basically in-sourcing all of the digital competency. We are looking for 20 additional software engineers and increasing our capacity there. We feel that in the long run, digital services on top of the intelligent energy management system is really what is going to drive this market – not the individual system sale.
In Germany, we are also changing a lot of our processes, changing some internal processes to support this. And then with that backup we can move more aggressively into Australia, into Italy and into other markets.