Australia’s energy future is currently challenged with uncertainties across supply and government policy which is driving energy prices to record levels. With the rise of renewable energy, businesses are now provided with new options for energy supply. With the roll-out rate for solar panels almost doubling over the past year as more commercial property landlords embrace the business case for such installations, it is no surprise that solar is now the preferred choice when implementing renewables into a business’ energy mix.

The recent rapid uptake of solar also reveals a microeconomic reality for many landlords who have been hit hard by bill shock. While the federal government has recently announced its plans for a National Energy Guarantee and the possible phasing out of the current Renewable Energy Target and the renewable energy subsidies that go along with it, businesses are already taking this into consideration and are still seeing the real benefits of implementing renewables.

On one side the cost of technology and installation has fallen significantly making it a real competitor to on-grid electricity retailers. In addition, the cost of electricity has also risen substantially with some businesses reporting their costs have doubled.

As a result, major businesses and property owners are investing heavily in solar arrays, particularly in the retail space. These include companies such as Stockland, which is installing 6.4 hectares of panels across the rooftops of 10 shopping centres as well as Frasers Property Group who have installed solar panels at their facilities such as The Ponds Shopping Centre, their Horsley Drive Business Park and numerous distribution and logistics centres across Australia.

Similarly, the recent announcement to changes to embedded network regulations mean that landlords and tenants in the retail space will now have greater control and protection over where they purchase their electricity. The proposed regulations are likely to highlight value-add opportunities for embedded networks and provide robust options for businesses seeking to control their energy costs well into the future.

To date, coming applications for embedded networks have included shopping centres, large office buildings with multiple tenants, retirement villages and caravan parks where the owner operates the private network and then on-sells to their tenants. In the past, the success of an embedded network arrangement was generally driven through lower-cost delivery to the tenant which was achieved as a result of aggregated volumes allowing greater buying power from energy retailers.

Embedded networks are now expanding their energy mix within the network through integration of renewables and other technologies. Solar technology can now deliver energy at a levelised cost lower than grid electricity and without the network costs, which the Australian Financial Review reported as the biggest factor in prices rises according to the ACCC. This increases the value proposition of an embedded network through offsetting grid energy price rises or lowering the overall cost within the network.

To find out more about embedded networks or incorporating new supply technologies into your business contact one of our energy experts at Solgen Energy Group.

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