Last week we looked at some of the issues behind the slow uptake of solar by property investors and what it would take to reach a tipping point. At the same time, one of Australia largest developers, Stockland recently announced they are adding the equivalent of nine rugby fields of solar panels to their shopping centre roofs.
This latest renewables move equates to a $23.5 million investment in 39,000 photovoltaic solar panels on 10 retail centres that will generate a total of 12.3 megawatts (MW) of electricity capacity. The estimated return over the coming decade for Stockland is expected to average 11.6 per cent annually on capital invested.
Across New South Wales it is estimated there are more than 13,600 businesses that have installed solar energy systems producing around 600 MW of electricity capacity. In particular Sydney’s West is considered a solar hotspot with businesses in Penrith, Blacktown and Canterbury-Blacktown saving an estimated $3570 a year by installing a 10 kW rooftop solar system. Not surprisingly, there was a 68.6 per cent increase in solar capacity in the commercial sector last year, according to Green Energy Markets.
Given Penrith was the hottest place on the planet on January 7, 2018 which saw the New South Wales rooftop solar systems generate an estimated 1000 MW of electricity on that day; the solar market is expecting to see a significant acceleration in commercial solar installations.
Solar makes very good sense for commercial buildings, particularly shopping centres, given that their highest demand for electricity is during daylight hours when the solar panel system is generating the most amount of electricity.
For example, Stockland’s Wetherill Park solar system has already generated 1.379 million kw hours of electricity which is enough to power 223 homes every day. The site is currently supplying about a quarter of the centre’s annual power demand.
It’s easier to see the business case for investing in commercial solar as there is a direct cost saving for the investor as opposed to property investors buying panels for their tenants.
It will be interesting to follow the flow on effects of these larger scale solar projects as they help reduce the peak demand strain across the NSW energy grid. It will also help to reduce the costs of the solar panels, making solar even more affordable for domestic use and installation by property investors. Another game changer for solar in the domestic use market are the latest home battery storage options, which means solar can be generated during the day, stored and then redeployed at night for domestic users when they have their highest demand for electricity. Especially as home solar storage batteries become more affordable.