A growing number of New Zealand’s small and medium-sized enterprises (SMEs) are turning to solar power and energy efficiency as rising electricity bills and climate expectations are changing business decisions. Many are turning to support from climate-positive electricity provider Ecotricity.
Climate Pressure Drives Financial Reassessment
About 40% of New Zealand’s carbon emissions stem from business operations, and the pressure to act sustainably is intensifying. Solar power is becoming increasingly difficult for businesses to ignore as energy costs climb.
“Now the cost is coming down so much – by 70% in the last few years – there is a business case for solar,” says Josephine Rudkin-Binks, commercial sales manager and sustainability expert at Ecotricity.
“Payback – the return on investment (ROI) for solar – has increased over the last 12 months where businesses are widely seeing 6 to 10% ROI and payback periods down to as low as 5.5 years.”
Banks Offer Affordable Financing Options
While overall uptake of solar by businesses has been relatively slow in recent years, access to finance is helping improve affordability.
“The overall take-up by businesses of solar has been quite slow the last few years but businesses can go to the bank and get a loan of 1% on the mortgage and for farms there are 0% interest loans,” says Rudkin-Binks.
She recommends working with certified providers: “Businesses thinking of exploring the solar option should make sure the company they work with is a member of the Sustainable Energy Association of New Zealand.”
SMEs Turn Surplus Solar Into Revenue
Solar energy is also generating income for some SMEs,
“Ecotricity pays a good price to customers when they are over-generating solar energy,” says Rudkin-Binks. “In some cases this becomes its own separate revenue stream.”
“If they can add a battery as well it’s worthwhile, so when the sun goes down, they can tap into free energy and avoid peak rates.”
Tenant Demand Influences Property Investment
Market demand is also influencing commercial property developers to incorporate solar into new and existing buildings.
“A lot are putting it in for lifts, carparks, cafés to create lower energy costs for the building,” Rudkin-Binks says. “Property companies are definitely now getting pressure from the tenants and the market about moving to renewables – it is becoming quite sought after.”
She points to a recent case involving Deloitte’s Hamilton office. “At Deloitte they had solar nationwide and their Hamilton office was the only one that didn’t. The landlord came to the party initially with renewable energy then has also got plans for solar,” she says.
Operational Changes Help SMEs Cut Costs
Some businesses are identifying savings through operational changes, even without solar installations.
“I was talking to a South Auckland manufacturer recently and they are shifting operating days from Monday to Friday to Tuesday to Saturday.” The shift is forecast to cut electricity expenses by around 30%. “It meant they could do more school runs so they were all for it.”
SMEs Collaborate to Maximise Efficiency
Collaboration between businesses is also being encouraged as a way to improve sustainability and efficiency.
“It works really well when there is more than one business doing this,” says Rudkin-Binks, referencing clusters of cafés sharing compost bins. “With these neighbouring businesses, they should think about what else they could buy together or share.”