Feb. 28 (Bloomberg) -- Pacific Hydro Pty, a partner in a venture planning a 150-megawatt solar farm in Australia, is seeking less government funding than it originally wanted after prices of panels that convert sunlight into electricity fell.
“It’s a significant part of the cost, which means we’ve been able to offer a significant reduction to the government,” Lane Crockett, Pacific Hydro Australia’s general manager, said by telephone from Melbourne today. He declined to give the revised cost of the project, estimated at A$923 million ($995 million) when it was awarded government funds in June.
The cost of solar panels fell 47 percent last year after the 10 largest makers of traditional silicon devices, including China’s Suntech Power Holdings Co., doubled production capacity in 2010, Bloomberg New Energy Finance data show.
After winning A$306.5 million in federal funds last year, Pacific Hydro and its partners in the proposed Moree solar plant failed to sign a supply accord with a retailer in time to reach a financing deadline. That prompted the government to reopen the competition to other bidders.
AGL Energy Ltd., Suntech and TRUenergy Holdings Pty Ltd., unsuccessful in the first round of the government’s grant program, were invited to reapply for Australian funds. Pacific Hydro said its group submitted a revised application on Feb. 24.
Pacific Hydro, a unit of Industry Funds Management Pty, is starting its own retail energy arm, enabling the company to purchase the power from the solar farm, Crockett said. Madrid-based Acciona SA will provide engineering and construction services, Pacific Hydro said Feb. 26.
BP Plc, a partner in the project, withdrew from the venture in New South Wales state after deciding last year to exit the solar business globally. Pacific Hydro and Fotowatio Renewable Ventures will take up the ownership stake previously held by BP.
“We had a number of roadblocks in front of us,” Crockett said today. “We’ve now got around those.”
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