New Zealand’s largest industrial landowner is set to invest over $110 million in a rooftop solar and battery storage rollout it says will lower production costs for local and export firms while reducing pressure on the national electricity grid at peak times.
Over the next decade, the initiative will see up to 170,000 solar panels installed across the group’s industrial rooftops, creating up to 85MW of rooftop solar capacity, along with battery storage systems to store surplus generation.
Calder Stewart has more than 900 hectares of zoned industrial land across Auckland, Canterbury, Otago and Southland, giving it one of the country’s largest platforms for distributed energy generation.
Its energy arm, Calder Stewart Energy, has already installed solar systems across 17 industrial sites, covering over 152,000m2 of roof space and capable of generating up to 3.6MW at peak output.
The systems are expected to generate about 4.2GWh of electricity a year, equivalent to the annual power use of more than 500 homes.
Sam Stewart, Calder Stewart director, says sector-wide adoption of rooftop solar across the country’s industrial sites could save millions of dollars in avoided transmission and distribution-related costs, while reducing the need for additional grid investment.
He says network losses typically add around 5% to 10% to the amount of electricity users pay for, meaning industrial businesses are effectively paying for more power than they consume onsite.
“If your meter says you have used 100 kilowatt hours, you may actually pay for 105 because of the losses across the network.
“By generating power above where it is used, we can take pressure off the lines network and reduce the cost of moving electricity across the system,” he says.
Stewart says solar will now be integrated as standard into the company’s new industrial developments, while the bulk of existing buildings are expected to be retrofitted within the next 12 months.
He says reducing the delivered cost of power could help lower the cost of producing goods for local and export markets, particularly for manufacturers, logistics firms and other energy-intensive occupiers.
“Every percentage point matters when businesses are operating in competitive markets,” Stewart says.
“If we can help reduce one of the core operating costs for industrial occupiers, that ultimately supports lower-cost production, stronger margins and a more competitive export sector.”
Stewart says the company’s move into rooftop solar reflects a shift in the way industrial buildings are expected to operate as New Zealand businesses electrify transport, heating and production systems.
He says industrial roofs have historically been an underused asset, despite their scale and proximity to large power users.
“We build these buildings and the roof is sitting there unused. The opportunity is to turn that into a productive asset that supports the tenant, supports the grid and creates a long-term return,” he says.
“Our model also avoids some of the land-use tensions associated with large-scale ground-mounted solar by using industrial roof space that would otherwise sit idle.”
Ben Krieble, Calder Stewart Energy manager, says the company’s model allows tenants to access cheaper solar power without needing to fund or own the solar infrastructure themselves.
He says tenants continue to buy power from their normal supplier, but receive a portion of their electricity from the rooftop solar system at a lower cost.
“Because the generation is on the roof, there are no lines charges, no network transmission losses and no levies attached to that portion of the electricity.
“That allows us to undercut the normal retail power cost because we are generating the power where it is being used.”
Krieble says the company can offer longer-term power price certainty, helping industrial businesses manage costs as electricity and lines charges rise.
He says some tenants are being offered power price arrangements of up to 12 years, creating greater certainty for businesses planning around energy-intensive operations.
“It is like fixing a mortgage for a longer term. On the backdrop of rising electricity prices and lines charges, fixing that operational cost line gives businesses more certainty as they plan ahead.”
Krieble says rooftop solar is particularly well suited to industrial property because many tenants operate during daylight hours when solar generation is strongest.
In summer, some sites can generate more electricity than the occupier needs during the day, allowing excess power to be exported to the grid. In winter, solar still contributes to daytime demand, with the tenant drawing the balance from the grid.
Krieble says the economics vary by site, depending on the size of the building, the solar system and the tenant’s energy use.
He says battery storage is the next step in improving the economics of rooftop solar, allowing more of the power generated during the day to be stored and used when demand is higher.
The planned battery rollout would allow more solar power to be used onsite and help reduce demand from the grid during morning and evening peaks.
Stewart says batteries could also play a wider resilience role by reducing pressure on local lines networks during periods of high demand.
“The two peak periods in New Zealand are first thing in the morning and around six o’clock at night. If power has been stored onsite, or batteries have been topped up overnight when electricity is cheaper, that power can be used instead of drawing from the grid at peak times,” he says.
“That has benefits beyond the individual occupier. It helps reduce stress on the national grid and local networks.”
Krieble says once battery storage is added at scale, the company’s rooftop solar network could become a form of virtual power plant.
“When you have distributed generation and batteries across a portfolio, it is not just a generation asset. It can provide services to the network, reduce demand when the grid is under pressure and keep buildings operating from stored power,” he says.
The company’s solar strategy is being integrated into its property development model, with new buildings designed from the outset to support energy generation.
Krieble says this avoids the need for expensive structural upgrades later and makes solar a standard part of the design process.
“The design philosophy is to include the ability to install solar from the beginning. If you have to go back and retrofit structural upgrades, that can become expensive. By designing for solar at the start, it becomes part of the building,” he says.
The rooftop solar programme forms part of a broader energy strategy for the company, which is also exploring standalone utility-scale wind generation across parts of its wider land development platform.
Stewart says more New Zealand commercial and industrial property owners need to start considering onsite generation as part of their long-term strategy.
“Property as an industry has spent decades assuming it can just connect to the grid and get the power it needs,” he says.
“That may still be possible, but businesses should not assume they will be paying the same price forever.”