New Zealand Green Investment Finance (NZGIF) is investing $10m in Solagri Energy to help rollout solar energy to New Zealand farms in a deal announced today.
Based in Canterbury, Solagri provides an innovative ‘solar as a service’ offering tailored specifically for dairy farms in New Zealand. Solagri arrays are normally ground mounted on a quarter hectare close to the dairy shed and provide the farm with low-cost electricity and long term energy price security.
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.
NZGIF Chief Investment Officer Jason Patrick says the investment is an exciting step towards decarbonising New Zealand’s agricultural sector.
"Dairy farms require large amounts of energy to operate pumps, store and cool milk, and clean equipment, so energy costs make up a significant part of their overall budget. Solagri has a great solution to that challenge, offering farmers affordable renewable energy - capital free.
"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.
"Given the importance of the rural sector to the nation’s economy, it makes sound commercial sense to invest in their energy needs. The more we can do to assist them to make the shift to affordable renewable energy, the better it will be for our nation as a whole."
Solagri CEO Peter Saunders says the investment will accelerate the rollout of solar arrays across the country and help Solagri develop its offering in the future.
"As input costs rise across the board and pressure comes on the finances, farmers are looking at different ways to manage their balance sheets. 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.
"We currently have eight systems at differing stages of consenting and construction and a lot of new work coming down the pipeline. We’re looking forward to expanding that rapidly in the next few years thanks to this facility from NZGIF.
"Solar energy makes a lot of sense for farmers but there hasn’t been a realistic renewable energy option for them until now. Our PPA-driven model allows farmers to have their cake and eat it too. With no upfront capital cost and reduced energy costs over time, in addition to helping with their annual Sustainability Audit, they can afford to invest in other projects, like new herd management monitoring and automation system. It’s a bit of a no brainer.
"Not only is solar good for the environment, harnessing the power of the sun to power the dairy shed, it makes financial sense too, with our growing customer base enabling us to access many of the benefits of aggregation and pass those on to the farmers through our pricing.
"We’re excited about working with NZGIF and what this investment will allow us to do for New Zealand’s farming community. Every new solar array we build frees up existing hydro-generation to be used in other parts of the economy.
"I’d encourage any farmer who’s looking around for energy options to get in touch. Now’s a great time to make the switch."
Solagri offers solar as a service to New Zealand farms. It brands itself as New Zealand’s most innovative rural energy business. Solagri’s solar as a service offers direct and indirect benefits:
- Solar installation for no upfront cost
- Farmers can make cost savings
- Reduces the cost of investment required to go electric
- Solagri’s sector experts find solutions for farms
- Supports sustainable agri-business in Aotearoa New Zealand by enabling farms to generate their own renewable electricity from sunlight
For more, see www.solagri.energy
About New Zealand Green Investment Finance (NZGIF)
NZGIF is a green investment bank which was established in 2019 to facilitate and accelerate investment that can help to reduce greenhouse gas emissions in New Zealand. We are a long-term, mission-driven investor, providing innovative, flexible and tailored capital solutions to support decarbonisation initiatives across a broad range of sectors. As a limited liability company independent of government, we make independent investment decisions. Our Board and management team have broad expertise including financial markets, investment banking, sustainability, technology and infrastructure. NZGIF invests on a commercial basis; we do not offer concessionary finance. We invest in scalable companies, technologies and products that are commercial-ready and offer low carbon benefits for New Zealand.
NZGIF is not a registered bank. For more, see www.nzgif.co.nz