Solar Power: The business case

Installing solar panels on schools and businesses is a good example of making hay while the sun shines.

The mathematics of installing solar power makes good sense for businesses and institutions.

Apart from tax and depreciation benefits, their peak power use is largely during sunlight hours rather than in the dim of the evening. It's an equation that several Auckland businesses are now testing. Dilworth School has just installed a 24kW system on its main campus by Te Kopuke-Mt St John and 9kW on nearby teacher accommodation.

Asset manager Christopher Plimmer says if they deliver the promised 20 per cent saving in power costs over the next year, the other campuses will also go solar.

"One of our trustees, Hugh Fletcher, who is also on the board of Vector, suggested we take a look, so we did the numbers," He says making no allowance for selling power back to the grid, which the school won't need because it is using the power as it is produced, Dilworth expects the return to beat its 8.5 per cent target for commercial property yields, and for the systems to pay for themselves within eight years. After comparing the main suppliers in the market, it went for the panels and inverters offered by Solar King.

"Being a long term trust, it is effective for us to invest in these types of technology because of the payback period. Compared with a home owner, we are always going to be here, we are not going to sell it, so we get the maximum payback.

"It's a pretty simple system, you've got the cabling, the inverter and the panels. There is not a lot to go wrong and it's a tested technology now. These panels come with a 10-year physical warranty and are guaranteed to still be producing at 85 per cent after 25 years."

Plimmer says Dilworth's power bill over its four campuses is more than $300,000 a year. Over the past six years the compound annual growth rate has been four per cent - double the rate of inflation. Cheesecake shop owner John Bennett looked at cashflow when he decided solar was the way to go. He's watching every cent while waiting for the lease to expire on a struggling secondary business, so borrowing to put solar panels on his home and Mt Wellington bakery made sense, with the amount saved in power use more than covering the loan repayments.

At the same time he bought an electric Nissan Leaf. "Basically I am looking to save a good portion of my electricity bill and my petrol bill," Bennett says. He has put a 23kW system on the bakery. "The walk-in freezer, walk-in chiller and a two big ovens means it chews through a bit of power," he says.

He is looking for an eight-year payback. If it all turns to custard before then he can lease the panels out, so he can continue to pay them off and maybe get some pocket money.
While his decision to buy the car was purely financial, "after driving an electric car, I wouldn't go back to driving a petrol one. It's so smooth and quiet. It's a bit like when everyone switched from manual to automatic cars - why could you go back, unless you are a petrol head."

Just Workouts Gym owner John Webster says his neighbours at Solar King talked him into putting a solar system on his Takapuna gym. It was rationalised as giving a better return than money in the bank but "I like the idea it is a little big green."

He hopes his members will also like the idea the sun is supplying some of the power to run their treadmills. "We use a lot of power. Machines stay turned on even when they are dormant, and the lights need to be on all day."

He expects the system should supply about half his power. The installation is a test case. If the numbers make sense, he will approach the landlords on his other gyms about going solar.

"The figures are the figures. I am interested in the net result, but even if it breaks even, it is a feel-good exercise," he says. If viewers on the Sky Tower look southwest to the corner of Cook and Nelson St they will spot the distinctive glimmer of solar panels on the roof of the 16-storey Aura apartment block. Mark Fogarin from Active Building Management says the 13kW array will shave almost 10 per cent off the $40,000 a year power bill for keeping the lights on in the lobbies and public areas and making sure the lifts are running.

The 220 apartment owners agreed to pay for the system out of the $80,000 they save annually by installing flow restricters in each apartment to make the hot water system more energy efficient.

"The body corporate committee is forward thinking when it comes to things like renewable energy. This is chipping away at the cost of running the building, and it makes it more sustainable," Forgarin says.

"Most of these buildings have massive roof space, and most of them don't put it to good use. When you have a multi-tenanted building like this, it is often not practical to open it up to the residents because of safety concerns."

Forgarin says Active Building Management manages about 60 buildings around the country, so it is using Aura as a case study. "We know the technology works. It is just about getting approval from owners and securing funding," he says.

This editorial series is made possible with funding from Solar King. To find out more about about Solar King's products visit solarking.co.nz

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