NZGIF will provide financing of up to $40 million for commercial-scale solar installations, in partnership with solar energy services provider solarZero.
Building on an earlier $10 million facility for financing residential solar, NZGIF will now also provide a senior debt facility to solarZero to finance Power Purchase Agreements (PPAs) for solar installations on commercial buildings. The investment includes a $10 million facility to finance solar installations and up to $30 million in additional funds held in reserve to scale up the facility, enabling the deployment of up to 40MW of solar generation over time.
The facility will directly support the growth of distributed solar power generation, reducing New Zealand’s overall reliance on thermal generation, generating more than 50 GWh of electricity per annum and creating as many as 175 new clean technology jobs.
Commercial solar is a market that is predicted to grow significantly as New Zealand continues to replace thermal with renewable generation. Analysis undertaken by Transpower forecasts a 700% increase in distributed solar generation between 2020 and 2030. Distributed solar will play a key role in achieving New Zealand’s emissions reduction targets. It is a flexible energy solution that can be deployed relatively quickly.
NZGIF CEO Craig Weise says this is an exciting next step as NZGIF works to drive growth in the distributed energy sector.
“Our long-term horizon and flexible mandate allow us to undertake this type of innovative investment. This facility is capable of scaling to finance large commercial solar projects to meet growing demand. We are pleased to be able to make this offer to multiple corporate clients seeking to finance commercial solar projects under a PPA structure,” he said.
Mr Weise said NZGIF is also pleased to continue to support the expansion of solarZero with this facility, marking a significant step-change in the commercial solar market, enabling large corporate clients to deliver on their own commitments to decarbonisation.
“This facility with solarZero, and future investments, will make it easier and quicker for commercial enterprises to adopt solar and will show them that acting sustainably and reducing emissions can deliver both economic and environmental benefits – every client that signs up for solar is not only saving on energy costs but also doing their part to shift the dial on climate change,” he said.
solarZero CEO and founder Andrew Booth is excited to be able to unlock the advantages of cheaper renewable energy both for companies and for communities across New Zealand. “Commercial and community solar are two of the most powerful tools we have to provide affordable renewable energy both to businesses and communities. For many Kiwis who do not own their own home or have a roof suitable for solar panels, this new financing tool will enable companies to help them save money on electricity costs,” said Andrew Booth, CEO of solarZero. “This investment by NZGIF and our shareholders will lead to meaningful energy cost savings, create jobs in our communities, and make our clean energy transition more equitable.”
Booth said solarZero has been working closely with a series of major New Zealand corporations and hopes to be able to announce their first customer early in the new year.
For more information, contact:
Jenny Lackey | Communications | New Zealand Green Investment Finance
Mobile: 021 340 847
Email: [email protected]
Angela Hayes | Senior Communications Specialist | solarZero
Mobile: 021 575 631
Email: [email protected]
More about NZGIF
New Zealand Green Investment Finance (NZGIF) is New Zealand’s green investment bank established to accelerate investment that reduces greenhouse gas emissions. Based on the globally recognised green bank model, NZGIF is an independent limited liability company. Find out more at www.nzgif.co.nz. NZGIF is not a registered bank.
Earlier this year, NZGIF announced a $10 million investment in solarZero to support the growth of the company and boost its residential smart solar-as-a-service programme. NZGIF’s investment complemented an existing facility from Westpac NZ.
More about solarZero
With its origins in solar water heating innovation in the 1970s, solarZero has installed more solar systems on Kiwi homes and businesses than any other company. It was the first solar company in the world to achieve Toitū carbonzero certification and has held this green credential for 11 years running.
solarZero is one of the fastest growing green companies in New Zealand. solarZero’s investors include Sir Stephen Tindall’s K1W1 investment fund and Pencarrow. An award-winning financing mechanism developed by solarZero and Westpac NZ, now bolstered with New Zealand Green Investment Finance’s mezzanine finance, locks in a fixed, low cost, inflation-free price for solar energy over a 20 year term, which removes any and all technology risk for households. Find out more at www.solarZero.co.nz.
What is a PPA?
A PPA (Power Purchase Agreement) is set up between solarZero and a business to formalise the purchase of power generated by the solar panels. PPAs have driven the deployment of renewable generation in many overseas electricity systems.
How does it work?
The PPA is similar in nature to solarZero’s existing residential customer arrangements, in that the solarZero provides solar-as-a-service. There is no upfront installation cost to the end customer, and solarZero retains ownership of the solar assets, with revenue generated from the sale of electricity to the customer.
Who is the commercial client/target base?
solarZero is focused on corporate entities with large roofs and entities with significant roof area across New Zealand.
Where are the solar installations going to be located?
solarZero has been working closely with a series of major New Zealand corporations and hopes to be able to announce their first customer early in the new year. The customer’s roofspace will need to be scoped for the installation, so locations will be announced after the first customer signs on to a PPA arrangement.