Calder Stewart to spend $110 million on rooftop solar

Calder Stewart will invest more than $110 million in rooftop solar and battery storage across its industrial property portfolio in New Zealand, a rollout set to make the landlord one of the country's largest distributed power generators.

Over the next decade, it plans to install up to 170,000 solar panels on industrial rooftops in Auckland, Canterbury, Otago and Southland, creating up to 85MW of solar generation capacity. Battery systems will be added to store surplus electricity for use during periods of higher demand.

Calder Stewart has more than 900 hectares of zoned industrial land across those regions, providing a large base for onsite generation. Through Calder Stewart Energy, it has already installed solar systems at 17 industrial sites, covering more than 152,000 square metres of roof space and producing up to 3.6MW at peak output.

Those systems are expected to generate about 4.2 GWh of electricity per year, equivalent to the annual power use of more than 500 homes. The broader programme will make solar a standard feature of new industrial developments, while many existing buildings are expected to be retrofitted within the next year.

Cost pressures

The investment comes as large electricity users face rising energy and network costs. Calder Stewart said generating power at the point of use can reduce some of those charges for manufacturers, logistics firms and other industrial tenants.

Sam Stewart, Director at Calder Stewart, set out the economics in simple terms. "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 said network losses typically add about 5% to 10% to electricity bills, leaving businesses paying for more electricity than they consume onsite. Broader use of rooftop solar across industrial property could also reduce the need for new grid investment and avoid millions of dollars in transmission and distribution costs, he said.

Stewart linked the move to pressure on industrial margins. "Every percentage point matters when businesses are operating in competitive markets. 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."

Tenant model

Tenants will not need to buy or fund the rooftop systems themselves. Instead, occupiers will continue buying electricity through their existing retailer, with part of their supply coming from the solar installation at a lower cost.

Ben Krieble, Energy Manager at Calder Stewart Energy, explained how the arrangement works. "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."

According to Krieble, some tenants are being offered power price arrangements of up to 12 years. That could give industrial businesses more certainty as electricity prices and line charges rise, he said.

"It is like fixing a mortgage for a longer term. Against a backdrop of rising electricity prices and lines charges, fixing that operational cost line gives businesses more certainty as they plan ahead," Krieble said.

Battery role

The planned battery rollout is intended to increase the share of solar electricity used onsite and reduce demand from the grid during peak periods. In summer, some buildings may generate more electricity than occupiers need during the day, allowing excess power to be exported. In winter, solar would still meet part of the daytime demand.

Stewart said batteries could also ease strain on local and national networks when demand spikes. "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. That has benefits beyond the individual occupier. It helps reduce stress on the national grid and local networks."

Krieble said a larger network of rooftop panels and batteries across multiple industrial sites could effectively act as a 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."

Design shift

Both executives said the strategy reflects a broader shift in industrial property as businesses electrify transport fleets, heating systems, and production processes. New buildings are being designed from the outset to support solar installations, which Krieble said avoids the extra cost of later structural upgrades.

Stewart said industrial roofs had long been overlooked as an energy asset despite their size and proximity to major 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."