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Business investment in solar - new EECA analysis

Contributor:
Fuseworks Media
Fuseworks Media

A new report commissioned by EECA (Energy Efficiency and Conservation Authority) shows a wide range of rates of return for large businesses considering investing in commercial-scale solar. EECA says 11 different types of businesses in eight regions throughout the country were analysed using a model to predict solar generation and financial performance.

Strategy and Insights Manager Dr Marcos Pelenur says businesses included food and beverage production, manufacturing, education, waste-water treatment and supply, a dairy farm, three types of retail outlets, a greenhouse, a cool store, a corporate office, and two types of warehousing.

"The analysis shows a wide range of potential internal rates of return, ranging from 0.4% to 8.6%.

On the basis of these findings there can be good investment benefits, but they are clearly variable so EECA recommends businesses carry out an in-depth analysis before investing in commercial-scale solar, to determine the potential financial performance for their company."

Dr Pelenur says businesses can use the framework used in the analysis, which includes: whether the business has a very large, unshaded roof space

how much electricity the business uses and when it is used

how much the business pays for electricity

lines company charges - these vary across the country

how much will the system cost to install and maintain.

EECA commissioned the analysis because there has been limited publicly available information on the cost-effectiveness of commercial-scale solar for businesses.

The analysis is available free of charge on the EECA website www.eeca.govt.nz/insights/eeca-insights/commercial-scale-solar-in-new-zealand

Example business

Food and beverage production siteAuckland

Amount of generated solar that would be used100%

Internal Rate of Return on Investment7.2%

Wholesale food marketChristchurch

Amount of generated solar that would be used96%

Internal Rate of Return on Investment6.8%

Corporate officeAuckland

Amount of generated solar that would be used99%

Internal Rate of Return on Investment7.6%

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