Residential solar has always been the backbone of the PV solar industry but in recent times soaring electricity costs has seen the bigger end of town turning towards on-site solar generation and energy efficiency upgrades.
In a recent deal, Australia’s largest diversified property group Stockland announced plans to team up with energy services company Verdia to develop and deliver Australia’s largest property solar program over the next 12 months across three states, which is expected to cut annual onsite energy costs by up to 25%.
Verdia chief executive officer Paul Peters suggests large energy users like Stockland were particularly vulnerable to high energy costs, creating a growing market for on-site solar generation and energy efficiency upgrades.
“The incentives particularly the feed in tariff which turbo charged residential was never available to C&I. But with equipment and projects costs coming down and the run up in the wholesale electricity market in the last 12-18 months, there has been significant increases in costs for larger companies which has driven them into the market in a significant way,” said Peters.
“Stockland has always had sustainability and renewables at the core of its business strategy, and have won awards globally on that strategy. They have a number of key installations – some smaller projects or single sites – so for them it was about the project economics becoming compelling enough for the rollout of a national program.”
The deal between Verdia and Stockland will see the installation of 30,000 solar panels which will generate enough electricity across nine shopping centre sites to power the equivalent of 2,485 homes.
“We started with Stockland about 12-15 months ago and looked at how we would do this across 10 sites along the east coast. Seven of the projects are between 1MW and 2MW – a program of this size is something that hasn’t been done by a major corporation in Australia before,” said Peters.
“Verdia has been working with Stockland on detailed site assessments, business case development, engineering, technical designs and network engagement. Verdia has now completed a rigorous process to subcontract equipment and installation services for these sites.”
Peters suggests there are three or four key challenges when thinking about designing, developing and delivering a major project.
“The first challenge is accelerating the project and benefits realisation. In Stockland’s case the program will be completed within 12 months rather than over a number of years. The second challenge is clients typically don’t have the internal teams and resources to rollout multi-site, multi-state projects at the same time. Getting the design right is the third challenge, to ensure the project is sized appropriately, commercially viable and technically feasible. The fourth challenge is choosing equipment and contractors from a fragmented market to ensure quality, appropriate experience and capability, safety and performance.
Those four challenges are the model we bring. We are taking projects that used to take two to three years and delivering them in just nine to 12 months.”
“We bring the capacity of skilled people covering all states and major regions, a robust methodology to address barriers and risks, and a platform of 150 pre-vetted contractors and equipment providers.”
Verdia manages Westpac’s Energy Efficient Financing Program which is supported by the Clean Energy Finance Corporation for asset finance.
Peters says the bank wanted to be able to offer finance for the tens of thousands of projects in the market over the next 10-12 years, but also ensure they understood the project risk.
“Westpac was looking to finance projects with good contractors, good equipment and good clients. They know good clients and Verdia does the work to assess which ones are good projects. Independent validation of projects meant they were able to change the way they thought about risk and the way they thought about terms and conditions,” said Peters.
“Westpac has made finance for projects that reduce energy costs more attractive. Capital is accessible to people who would otherwise find it difficult to get funding from a major bank and Westpac fast tracks approvals to help clients start saving sooner. We can help people arrange finance with Westpac whether they are a customer of Westpac or not.”
“We are focused on achieving customer’s goals and the greatest value we bring to this agreement with Stockland is the ability to deliver energy reductions across nine sites in just 12 months, significantly accelerating Stockland’s solar roll-out.”