UPDATED: Some of Australia’s largest retail shopping centre owners are going solar, with companies such as Mirvac, ISPT, Stockland and now SCA owners are going solar.
ASX-listed property trust SCA Property Group is the latest to commit to a major solar PV roll-out in a deal with ReNu Energy to install $4.33 million of onsite behind-the-meter solar at four of its 74 regional shopping centres. Another seven sites might be added.
The first system will be installed at the Griffin Plaza at Griffith NSW, and scoping is underway for installations on NSW’s Lismore Central and South Australia’s Mount Gambier and Murray Bridge centres, with a total of 2.9 megawatts of capacity.
Under the agreement, ReNu Energy will execute cornerstone electricity supply contracts with centre management in each centre, with power to be sourced from the PV. Any shortfall will be sourced from a retail electricity provider.
Tenants will also have the option to use an electricity supply contract, which could deliver energy savings.
The contract with the energy company is to own and operate the solar and associated embedded network systems for 10 years, with three and five year options for renewal.
The combined projects are forecast to generate about $700,000 before interest, tax, depreciation and amortisation in their first full year of operation.
“We are excited about our ability to provide our customer, SCA Property Group, with a cost competitive renewable energy solution,” ReNu Energy chief executive Chris Murray said.
“The systems will improve the green credentials of the centres, and the behind the meter solar PV will provide a partial hedge against future retail electricity price rises.”
SCA Property general manager – operations Sid Sharma said the projects would enable efficient energy to be deliverd to centres and tenants.
“This supports our ongoing commitment to providing stable and resilient cash flows to our unitholders.”
Shopping centre sustainability takes off
SCA is in good company when it comes to showing leadership in reducing the carbon footprint of retail centre operation.
Mirvac goes massive
In its 2016 sustainability report, Mirvac announced it had created a new entity – Mirvac Energy – to facilitate renewable energy going onto its assets. The new entity pays to install the solar PV on Mirvac’s own assets, then partners with a provider to sell the energy back into the building as an off-grid supplier.
This pays back the cost of the PV and also generates a long-term income stream.
The first project off the starting blocks in February this year was a massive 3200 solar panel installation at Orion Springfield Central in Queensland.
The system is expected to generate more than one megawatt of electricity – enough to power 255 households.
The panels were lifted on by two helicopters, which cut the installation time from days to just a few hours.
“This has been in planning for a long time and is evidence that we are invested in going green and providing sustainable solutions for our tenants and customers,” Orion Springfield Central centre manager Melissa Crittenden said.
The Ponds and beyond
Frasers Property Australia has made a commitment to have solar PV on all new commercial and industrial developments by 2017 and to incorporate renewable energy into all its new developments by 2018.
As part of its sustainability strategy it also committed to developing a new energy positive retail centre design by 2017. This ambition is now being realised, with the Living Building Challenge-registered Brickworks retail centre in Melbourne now in development and leasing applications already being taken.
Solar PV is part of the design.
The first Frasers-developed centre to get solar was The Ponds in Blacktown. Opened in 2015 and now owned by ISPT, it has 400 PV panels that provide enough energy to power most of the car park.
The centre recently won the 2017 Property Council of Australia award for Best Shopping Centre Development.
Car parks becoming power stations
Origin Energy is currently in the process of turning the car park of Westfield Marion in South Australia into a major energy source, by installing a car park canopy solar PV system.
The centre is jointly owned by Scentre Group and Australian Prime Property Fund Retail.
The system comprises 14 separate solar canopies covering approximately 240 car parking spaces. It is designed to generate 647.73 kW and will achieve annual CO2 savings of around 650 tonnes.
“Entering into a long-term solar solution can help property owners and managers like Scentre Group reduce the energy costs of their assets and provides some cost certainty against potential future movements in electricity prices,” Origin general manager solar & emerging businesses Phil Mackey said.
Scentre Group general manager of facilities and sustainability Stuart Elder said solar was a “key pillar” of the group’s sustainability strategy as it “reduces our carbon footprint and reliance on traditional electricity generation, providing a win-win for all stakeholders”.
Solar car parks are also gaining traction elsewhere.
Sydney Markets now boasts a $14 million industrial-scale solar car park that provides shade for 350 cars spaces and increases the market’s total renewable capacity to just under 1MW.
Adelaide Airport installed a solar system over parking, with a 1.17 MW solar array shading its short-term car park.
Family-owned shopping centre The Pines in Elanora on the Gold Coast has also seen the wisdom of turning car space into power-generating space. In late 2015 it installed a 636kW system over a newly-built carpark.
It shades 200 rooftop car spaces and generates over 1000MWh of electricity a year – saving around 71 tonnes of CO2 a month.
Even the small players are doing it
It’s not just the big REITs and major portfolios getting in on the renewable action. In early 2016, the privately owned Broadway Fair centre in Nedlands, Western Australia, commissioned what was at the time the state’s largest rooftop PV system.
The 312kW solar PV system comprises 948 panels and generates over 30 per cent of the centre’s annual electricity demand. It also generates an additional revenue stream for the centre’s owners in the form of electricity sales to tenants.
The system was installed at the same time as major roof repairs had been carried out. Instead of having to increase rents to cover the cost of repairs, the centre managers funded the expense from the electricity bill savings created by the solar.
Leaders and laggards
One of the early adopters of solar for retail centres was GPT, with its installation at Rouse Hill Town centre, completed in 2014.
It subsequently went on to commission in late 2015 what was at the time Australia’s largest rooftop system, the 1250kW system on Casuarina Shopping Centre in Darwin, and also added 50kW to its Homemaker Maribyrnong centre.
Stockland has to date invested $4.8 million in rooftop solar for retail centres. They include Shellharbour, Stockland Green Hills, Nowra, and most recently, early this year, commissioning the 925kW system at Wetherill Park. It comprises 2900 PV panels across 5695 square metres of roof space, and is expected to generate an average of 3620kWh a day – enough to meet 23 per cent of the centre’s annual base building requirements.
“Our investment in sustainability initiatives like solar not only provide a number of environmental benefits but also new jobs and financial savings for our retailers,” Stockland group executive and chief executive commercial property John Schroder said.
“We truly believe in the ability for sustainable practices to change the energy landscape in Australia and this new solar system installation is an important step in that direction within the large scale commercial property arena.”
Vicinity Centres was also an early adopter, with the 2014 installation of a 40kW system on its Warnbro Shopping Centre in Western Australia.
In its latest sustainability report, it said the system had proven the business case for further rollout of solar on other centres it owns.
AMP Capital was at one point considering solar installation as part of its $670 million upgrade of Pacific Fair Shopping Centre on the Gold Coast, but the plans have been placed on hold.
The company’s head of sustainability, property, Chris Nunn said, “Solar was investigated as part of the redevelopment of Pacific Fair, but an installation was deferred until after stabilisation of the asset.
“AMP Capital Real Estate has carried out solar feasibility studies for all properties and is in the process of developing business cases for internal approval of several solar projects. Our first solar installation on a shopping centre was a 100kWp system installed at Northbridge Shopping Centre in 2016.”