Fletcher Building's purpose-designed, offsite home manufacturing facility. Supplied
Fletcher Building's purpose-designed, offsite home manufacturing facility. Supplied
Fletcher Building is turning to solar power for around a third of the electricity it needs to run its Laminex plant in Hamilton in a deal that will see the factory building's owners install a 524 kilowatt solar array on its roof.
The 2,224 square-metre solar energy system will beinstalled by Auckland network company Vector's Powersmart subsidiary and is remarkable for being one of the larger commercial property solar installations and among only a few supplying an industrial process rather than a shopping centre or horticultural activity, where such installations are becoming more common.
Commercial confidentiality means the parties will not discuss the price at which Laminex will buy electricity from Udy Group, which was an early adopter of photovoltaic solar arrays when it installed one on its Tarewa shopping mall in Whangarei in 2014.
Since then, a prolonged period of low, stable wholesale electricity prices had made it hard to justify further installations, group director Dan Udy said, but the recent sustained period of higher and more volatile wholesale prices had changed the equation.
"We are able to supply Laminex with renewable energy at a rate that is consistent with the wholesale rate is as much as I can say," he said.
Greg Visser is chief executive at Infratec, which also offers commercial solar installations. He said it was possible to deliver electricity at between 9 cents and 15 cents per kilowatt-hour from solar, compared with around 10 to 11 cents for industrial users on time-of-use bulk contracts and closer to 20 cents per kWh for smaller scale commercial electricity consumers.
However, firms were often investing not only for the current solar price but for the certainty of a locked-in tariff that could run for between 10 and 30 years, and for other corporate goals, such as carbon emissions reductions.
Fletcher Building is targeting 30 per cent emission reductions by 2030
"We've managed to structure a power purchase agreement in which we pay per kWh, essentially recovering fixed costs invested by the landlord for a period," said a Fletcher spokeswoman. "But this wasn't a decision based only on costs – it's part of our drive to reduce carbon emissions across the Fletcher Building group."
Fletcher Building is targeting 30 per cent emission reductions by 2030.
Powersmart's chief operating officer Colin Daly said it was time for commercial property owners to consider whether "large, unobstructed roof space" would make sense for solar investment.
Other industry experts warned that numerous factors needed to be considered in whether or not solar was a good option, including where ownership of the solar equipment sat, the roof angle and exposure to extended sunlight hours, and the ability of an existing roof to take the weight of a solar array without costly strengthening.
