Millions of Australians are using solar radiation to power their homes. But what about businesses? Commercial property owners in Australia are starting to looking to the sun for a way to make tenants stickier.
While businesses are hard at work from nine to five, the sun is too. This makes commercial solar power systems a bright idea for the commercial real estate investors.
By operating sustainably, businesses are able to garner respect in the public eye, reduce electrical bill burdens, and collect government support in the process. It shows a workplace is committed to the environment. And this can even resonate with modern-minded customers.
Come rain, hail, or shine (only at a reduced output on overcast days) the sun can work for businesses. We show why going solar is a bright idea for your workplace or tenant.
The Power of Commercial Solar
In addition to the many environmental positives that come with using solar power, there are commercial benefits for every panel installed by a commercial landlord. Here are just a few.
Sustainability is synonymous with community admiration. Businesses and commercial property owners can leverage their ability to demonstrate sustainable features of their operations or premises. They call this license to gloat green credentials.
Being rewarded for having superior environmental principles is now measurable across Australia thanks to the NABERS (National Australian Built Environment Rating System). The system gives commercial properties a rating between 1 and 6 stars on their environmental efficiency and is now Australia’s industry standard. It is definitely something landlords and business owners should be aware of.
Yes, a solid NABERS rating shows a cost-effective premise. And as a result it will likely attract a higher property valuation. Savvy investors are buying with green credentials and the future in mind. That’s where commercial solar systems come in.
Reducing Energy Bills
How much do commercial solar power installations cost? It depends. A shopping centre might pay between $300,000 and $1 million on commercial solar. An office building may spend between $10,000 and $100,000. Sure, it’s not cheap. But the best part? These costs are quickly recouped.
The Broadway Fair Shopping Centre has reached their third year under almost 1,000 commercial solar panels. An enormous $240,000 is scraped from their electricity bill each year, meaning their $600,000 investment is practically paid off in two and a half years.
SME businesses in Australia may typically use around 40,000 kWh per year (Broadway Fair uses 540,000 kWh). So, even if a small business had a tenth of this installation… that’s a brilliant saving to be had with just a short time under the sun.
Solar is a durable investment
Want a long-term investment strategy?
The life expectancy of a solar panel is 25-30 years. This will resonate with those taking a ‘set and forget’ approach to their property or share portfolio.
Government solar rebates
The Australian Clean Energy Council (CEC) says there is enough roof space area across the nation to power the entire continent through solar power.
So, why wouldn’t parliament nudge home and business owners to adopt sustainable techniques?
Small businesses embracing solar power can cash in on the Small-scale Renewable Energy Scheme. This scheme aims to assist Australia’s Clean Energy Regulator achieving their target of 33,000 gigawatt hours of extra renewable electricity by 2020 (this is the equivalent of approx. 151.8 billion solar panels).
Businesses can lodge a small-scale technology certificate for each megawatt hour (MWh) of electricity generated by solar power. It is worth about $630 per kW installed. So, if an eligible business fits the maximum small-scale amount of 100 kW, they could put their hand up for $63,000 in rebates. That may shock cost-focused businesses.
Businesses can enjoy a healthier, cost-saving and more reputable operation. Landlords can enjoy a better investment:
- Tenants will endure lower occupancy costs and outgoings;
- As a result, tenants will become stickier and potentially much less likely to move to another premises;
- Commercial property owners can boast a brighter set of green credentials with a more sustainable building to show the public and potential occupants.
Value-add opportunities are an important part of good investing. And with Australia enjoying more solar radiation than most countries, why not harness that energy and garner a better investment.
Make hay while the sun shines.
Properties & Pathways offers exclusive unlisted direct property investment in high quality commercial assets. And the best part is we invest with our investors in every investment. This bolsters our commitment to each investor, as we’re in it with them, bumps and all.
For more information on how to invest with us, either subscribe for updates or get in touch today.