NZGIF has provided a $10 million debt finance facility for Solagri Energy to help reduce on-farm energy emissions.
Farming can be energy intensive, increasing on-farm costs and energy- associated emissions.
By the nature of their open spaces, many farms are very well suited to on-farm renewable energy generation solutions, particularly via solar energy.
In December 2022, NZGIF provided a $10 million debt finance facility for Solagri Energy – a Canterbury-based ‘solar as a service’ provider for dairy farms. Typically, Solagri provide a quarter hectare of solar panels to a dairy farm close to the milking shed, providing the farm with clean, low-cost electricity, long-term price security and increased energy resilience. The solar panels are owned throughout their lifetime by Solagri and provided as a service to the farmers. This way the farmer avoids upfront capital cost and associated debt and effectively leases the solar panels on an opex basis, with Solagri generating secure, long-term revenue streams.
The NZGIF investment will support the installation of solar panel arrays on 120 dairy farms over the next three years. The investment is an example of the increasingly commercial value of reducing emissions: in this case farm emissions are reduced, costs are reduced, and energy security is increased.
Benefits
Reduced on-farm energy emissions |
The $10m debt finance facility provided by NZGIF is expected to finance around 120 solar arrays over the next three years, and these arrays are expected to help avoid 36,100 tonnes of CO 2-e emissions over the life of the assets. |
Removal of significant cost barrier to solar uptake for farmers |
One of the exciting things about Solagri’s product is they install, own and maintain the solar arrays including insurance, cleaning and monitoring of the equipment, so there’s no upfront costs to the farmer. This removes a significant cost barrier to transitioning to solar energy and allows for more predictable energy budgeting since farmers are insulated from energy market fluctuations. |
PPA-driven model offers price stability |
Solagri’s Power Purchase Agreement (PPA) offering gives farmers the price stability and other advantages that come with solar, without increasing their debt burden, and enables them to continue focusing on their investment in core business. |