Increasing energy costs driving adoption of solar in retail property

Higher energy prices are driving investment in solar technology, and more energy efficient vehicles, heating, cooling, and lighting, according to the Commonwealth Bank’s Equip 9 report.

The report states that between 2015 and 2017 wholesale electricity prices rose 130 per cent, doubling the price paid for electricity traded on the National Electricity Market (NEM).

As a result, of the 33 per cent of companies currently considering ‘green’ equipment, more than half are primarily doing so based on the potential energy efficiencies the technology could bring – lowering the amount needing to be paid through the NEM.

“Businesses are increasingly factoring in smart purchasing of efficient equipment to achieve operational and cost benefits, but there are still a number of barriers holding back widespread adoption,” CBA general manager of asset finance Sylvia Terry said.

The report found that a third of companies were unaware of the real benefits of investing in energy efficient equipment, while 13 per cent indicated cost was the main barrier to its adoption.

However, organisations that have already invested reported an average savings of 30 per cent on energy costs, which increases to 38 per cent for the largest companies – defined as those with earnings over $500 million.

While the amount of retailers currently using solar technology is relatively small, the technology is taking off in property developments in order to future-proof the centres.

Woolworths made the technology a key part of the redevelopment of its Adelaide regional distribution centre, which is to feature 3,500 solar panels (1.6MVa systems) across the rooftop, and will cost $2.5 million.

The installation will provide around one-fifth of the centre’s energy needs.

Likewise, property firm Vicinity Centres is investing $75 million into a large-scale solar program, which will see 22 of its centres fitted with rooftop solar panels, generating more than 31,000 MWh of clean energy each year – as well as cutting the group’s consumption from the national energy grid by up to 40 per cent.

This project is expected to be completed by late 2019.

“As businesses continue to look to reduce their overhead costs, it’s likely the momentum towards energy-efficient purchases will only increase, as awareness of the available options improves and availability becomes more widespread,” Terry said.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.

You have 7 articles remaining. Unlock 15 free articles a month, it’s free.