Australian aged care sector turns to solar for lower energy bills

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Alongside the retail property, manufacturing, agribusiness and education sectors, the Australian aged care industry is emerging as one of the major players in the commercial and industrial solar arena. C&I PV and energy efficiency specialist Verdia reports that the sector is undergoing a major energy transformation with an eye on better residential amenity, environmental and operational improvements and reduced energy and maintenance costs.

Presently, Verdia is managing the energy efficiency projects for six aged care providers, helping to reduce energy use by up to 40%. It is installing more than 36,000 energy efficient LED lights and over 14,000 solar panels at 91 aged care homes across the country. At this stage, the program is about 80% complete.

The installer reports that the sector’s interest in energy makeovers shows no signs of subsiding, with a further 100 aged care homes currently in the assessment process to join Verdia’s program.

The key driver behind the strong demand for energy improvements across the sector are rising energy bills. Analysis from Verdia shows that the annual cost of energy per bed across the aged care sector has increased over the past couple of years by around 35%, from around $700 to $950.

“Those increases are just not sustainable for many providers,” says Verdia CEO Paul Peters. “At the same time the cost of solar PV has decreased by about 30% and LED lighting technology has vastly improved. So there is a very compelling case for aged care providers to look at ways to reduce costs and improve amenity”.

Peters goes on to explain that higher wholesale electricity costs mean that energy produced on site from solar panels is now significantly cheaper than electricity supplied from the grid. “Organisations that invest in solar are seeing average returns of between 18 and 25%, and it’s helping to take the risk out of their energy supply contracts,” he says.

The most ambitious among Verdia’s clients, Opal Aged Care, is rolling out 10,600 solar panels with the accumulated capacity of 3.5 MW and more than 28,000 LED lights across 54 of its properties. The energy efficiency program will see Opal cut onsite grid electricity use by about 42% and reduce greenhouse gas emissions by 30%.

Energy makeover is also popular among smaller aged care providers. For instance, Verdia has recently delivered 612 solar panels 962 LED lights for the Forest Centre, a small not-for-profit organisation, which owns two mid-sized aged care facilities in Wagga Wagga. This program is expected to deliver a 32% reduction in energy costs, meaning that combined the two facilities are expected to save around $90,000 in year one and almost $2 million over the asset lifetime. The 220 kW solar PV array will have an average payback of 5-6 years, then provide low-cost electricity for a further 20 years.

The transformation of energy use in the aged care sector is part of an estimated 68 MW of behind the-meter solar PV being developed and installed by Verdia across Australia. It is also part of a broader sustainability push in the commercial and industrial sector accompanied by a jump in medium scale solar PV installations.

According to the Clean Energy Council (CEC), there was a 45% increase in commercial solar installations in 2018, with Victoria, Queensland and NSW leading the way. In its annual report, the CEC states that medium scale solar PV installations between 100 kilowatts and 5 MW grew by 80% last year, as cumulative installed capacity of solar in this category went from approximately 128 MW in 2017 to 230 MW in 2018.