By business reporter David Chau – ABC NEWS
11th November, 2020
Consumers could potentially see their power bills drop within years if Australia’s latest bet on solar energy pays off.
With Australia-China relations showing no clear signs of improvement, the government-owned Clean Energy Finance Corporation (CEFC) has poured $US7 million ($9.6m) into a Shanghai-based company called “Sunman”.
This means taxpayers, by extension, will own a 14 per cent stake in Sunman, which also has offices in North Sydney and Hong Kong.
The little-known company was founded in 2015 by leading solar scientist, Dr Zhengrong Shi, nicknamed the “Sun King” as he is widely regarded as a pioneer in the industry’s development.
Dr Shi has invented a new breed of solar panel called the “eArc” — which the CEFC’s chief executive, Ian Learmonth, is betting will be “the next big thing” in the industry’s evolution.
Essentially, these are lightweight solar panels that Sunman says are “revolutionary” and can be glued “onto any surface”.
In contrast, traditional solar panels (made of heavy glass) can only be placed on flat rooftops, and often need holes to be drilled into rooftops during installation.
“Already, we’ve got an incredible uptake of solar rooftops — there are 2.4 million roofs in Australia with conventional panels on,” Mr Learmonth told the ABC.
“I see this particular innovation in solar panels playing a huge role … we’re now going to open up a whole new market. It’s very exciting.”
Dr Shi is the majority shareholder of Sunman, while Sydney-based private equity firm Southern Cross Venture Partners also has a significant stake.
What is the eArc?
Sunman says its eArc panels weigh “70 per cent” (or 14-17 kilograms) less than than traditional glass panels — since they are made from a plastic-like “polymer composite”.
This means they can easily be bent, making them easy to install on curved roofs, walls and even the tops of trains and caravans (or RVs).
“Our technology will revolutionise the way Australians approach solar and save them money on energy bills,” Dr Shi said.
He also estimated that 40 per cent of commercial roofs are structurally “slender” and unable to “accommodate the weight or uplift of glass solar modules”.
Unbeknownst to many, these “new age” eArc panels have already been installed at some iconic Australian locations (and some that aren’t well known).
One of the better-known landmarks is the Australian National Maritime Museum.
The Maritime Museum installed solar panels on its rooftop in 2019 to lower its energy bills.(Supplied: Sunman)
The museum had, since 2015, wanted to install conventional solar panels on its Heritage Centre, located in the Sydney tourist hotspot, Darling Harbour.
However, it soon realised the roof was too steep (30-degree pitch), and it was not strong enough to bear the weight of heavy glass panels.
The museum had to put off its plan to reduce its power bills and carbon footprint for several years — until it decided to give the eArc panels a try in 2019.
“We came across a unique glass-free solar panel from Sunman,” the museum’s chief executive Kevin Sumption said in August, last year.
More than 800 of these lightweight panels have been installed on the museum’s roof.
“The 5.5 kg lightweight panels could overcome the building’s structural challenges and also have the same power output as 20kg conventional panels.”
The eArc panels have also been fitted on the exterior walls (as opposed to the rooftop) of a Melbourne apartment building, Docklands’ Harbour One.
They have also been installed on the curved roof of Byron Bay’s newest tourist attraction, which is believed to be the world’s first solar train.
The train is a refurbished 70-year-old “red rattler”, running on a 3-kilometre stretch of disused rail line between Casino and Murwillumbah.
The rise and fall of the Sun King
Dr Shi came from humble beginnings, born in 1963 to a poor farming family — in the aftermath of Mao Zedong’s Great Leap Forward.
He was given up for adoption at a young age, along with his older twin brother.
Sunman’s eArc solar panels are lightweight and bendable as they are not made from glass.(Supplied: Sunman)
The future “Sun King” studied in Shanghai, excelled in his studies, then moved to Sydney as an exchange student in 1988.
Dr Shi was 25 years old at the time, and it was a year before the Tiananmen Square massacre in Beijing.
He soon became an Australian-citizen, and finished his engineering PhD at the University of New South Wales in a record two-and-a-half years.
In 2001, he was lured back by the Chinese Government, which rewarded him with generous subsidies — to form a solar start-up in the eastern city of Wuxi.
The company he founded was called “Suntech Power” — which was the world’s biggest solar panel company, listed on the New York Stock Exchange, until it went bankrupt in 2013.
Back in its “heyday” (in 2011), Suntech also installed 1,900 solar panels on the rooftop of the Sydney Theatre Company.
It was the subject of a high-profile launch by actress Cate Blanchett and her husband Andrew Upton, the theatre’s artistic directors at the time.
Before Suntech’s decline — and Dr Shi being ousted as its chairman and chief executive — he was one of the richest men in China and Australia (where he divides his time).
He was the world’s first “green billionaire”, and his net worth is estimated to have peaked at $4.1 billion ($US3b) in 2008.
Sunman installed its solar panels on the curved roof of Byron Bay’s “first solar train”.
It didn’t help that Suntech had racked up billions of dollars worth of debt as it tried to expand aggressively, and defaulted on a $US512 million bond payment.
Nor did China’s decision to subsidise more than 100 of his competitors, which led to the world being flooded with solar panels, causing prices to plunge.
“As you can imagine, every company has good times and bad times,” Dr Shi told the ABC.
“Back in 2013, after the [global] financial crisis, and also with overcapacity of the industry, anti-dumping [tariffs] from Europe and the United States, the whole industry became very difficult at the time — both financially, and I would say politically.” Despite that, he remains proud of his legacy and is hoping for “better luck in life”.
“I started the solar industry here in China, 20 years ago. Now you see cheaper solar electricity available everywhere in the world.”
Despite the failure of Suntech, the CEFC boss is confident that Dr Shi has what it takes to elevate solar technology to the next level.
“We, of course, had a very thorough look at everything that went on both in China and in Europe,” Mr Learmonth said.
“We don’t feel there was any malfeasance on behalf of Dr Shi.
“Obviously we wouldn’t have thought so, or we wouldn’t be making this investment.
Value for money?
The CEFC boss strongly believes Sunman will be a “winner” with “limitless potential”, even as trade relations hit new lows between Australia and China.
Last week, Chinese state media (in the form of a China Daily editorial) warned that “Canberra only has itself to blame” and “could “suffer further pain”.
CEFC boss Ian Learmonth is backing solar startup Sunman as a “winner”.(ABC News)
The Global Times, another Communist Party tabloid, also confirmed unprecedented suspensions this week on seven Australian export products to China, including wine and coal, in a multi-billion-dollar blow to the local economy.
Despite all that, Mr Learmonth maintained a positive outlook.
“I think in some ways it [the Sunman investment] might go towards improving things,” he said.
“Dr Shi is an Australian Chinese national, [and] we’ve got a business that is a partnership between Australia and China.
“So I’m hoping that we can see the best of both of these markets rather than some of the challenges that we’ve seen recently.”
What will Australian taxpayers get out of the CEFC’s multi-million dollar investment in Sunman?
“The money will be used in Australian to build out [Sunman’s] marketing, distribution and R&D [research and development] … it’s an Australian-centric investment for us”.
But Mr Learmonth confirmed there is no clause in the CEFC-Sunman deal mandating how much the solar company should invest in Australia.
The agreement should not be “overly prescriptive”, he said, given Sunman is undergoing a growth phase.
However, most of Sunman’s staff are employed overseas, its headquarters are located in Shanghai, and it was registered in Hong Kong.
It employs about 20 staff in Sydney, and 80 workers in China — mostly in engineering, R&D and sales.
“We do not do manufacturing ourselves, we subcontract to China and Thailand,” Dr Shi said.
As for how many Australian jobs might be created, he predicts: “We can easily double the number of jobs in the next few years.”