Property owners with enough roof space can make their own electricity and sell it to their tenants at a price no grid-based power company can match.
The big opportunity with renewable energy is not just about saving money. It’s about making money.
Landlords on-selling power to tenants is nothing new but it’s now possible for landlords to make their own electricity, and sell it to their tenants for far less than the large incumbent power companies can.
This is particularly true for landlords with lots of rooftop space. They can even generate more than the site needs and feed excess into the grid to boost income.
Two things have recently evolved to make this possible:
In fact we’re seeing evidence that renewables are the cheapest form of power, even without government incentives.
Jim Robo is the CEO of NextEra Energy, a US company with a market cap around A$170 billion. Earlier this month, RenewEconomy report that he said this: “We see renewables plus battery storage without incentives being cheaper than natural gas, and cheaper than existing coal and existing nuclear.*”
There's no reason this should not be true in Australia if it is in America.
Commercial viability of this model is not dependant on the price of batteries coming down. By staying connected to the grid as a backup, it’s possible to overcome the intermittency of solar, while avoiding the cost of grid power by using it as little as possible.
It also minimises exposure to price increases by power companies - a regular occurrence.
It’s unlikely to be long before a connection to the grid will be optional. We’re now seeing solutions in the market combining solar and storage, which beat grid prices by 5-10%.
The point here is not just that it’s cheaper to produce electricity this way, it’s that the cost of getting the electricity through the grid to your building is removed altogether. A glance at any traditional power bill shows these costs - network charges - are 40% to 50% of the total cost. With rooftop solar, these are largely removed.
All traditional electricity suppliers are reliant on these ‘transport costs’, so it’s very likely landlords using this model will be able to offer their tenants the lowest prices - bar none.
So it’s not hard to envision property owners adding a new revenue stream within 5 years, while attracting and retaining tenants with lower priced electricity.
Let’s not forget the real value of renewables. Sustainability credentials are great for PR and brand positioning, but we also know that doing something about climate change is going to be appreciated by tenants, employees, industry, and perhaps most importantly, our families and friends.
To learn more, please get in touch, or for a free quote, send us a recent power bill in the form below.