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Wide Range Of Returns From Business Investment In Solar – New EECA Analysis
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 site | Auckland |
| Amount of generated solar that would be used | 100% |
| Internal Rate of Return on Investment | 7.2% |
| Wholesale food market | Christchurch |
| Amount of generated solar that would be used | 96% |
| Internal Rate of Return on Investment | 6.8% |
| Corporate office | Auckland |
| Amount of generated solar that would be used | 99% |
| Internal Rate of Return on Investment | 7.6% |
Note to Editors
EECA is the government agency that works to improve the energy efficiency of New Zealand's homes and businesses and encourages the uptake of renewable energy.
Our purpose is to mobilise New Zealanders to be world leaders in clean and clever energy use.
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