Børsen: Solar cell systems are now so cheap that both tenants and landlords get financial gain.

There are both environmental and financial gains when NREP during the course of 2020 receives 7 MW roofing systems at 5 locations in Denmark. It’s not just about a green image. It is also quite a good business financially to establish photovoltaic systems on commercial rental properties.

Article from Børsen is reproduced by agreement with Dagbladet Børsen A / S

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The real estate company NREP is currently installing a large photovoltaic system on a logistics property in Greve. The property is leased to Bring, which thus becomes a buyer of electricity produced on the property’s roof. This installation has the potential of bringing a large financial gain.

“We see local renewable energy production as an obvious way to reduce the CO2 footprint of our properties. We see great potential in roof-based photovoltaic systems and geothermal heat production in our commercial properties,” says Johan Hallgren Madsen, Sustainability Manager at NREP.

The buildings have large flat roof areas that enable large and cost-effective facilities. Our properties typically have roof areas of 15-60,000 sqm. Furthermore, there are typically no problems with restrictive local plan requirements due to the properties’ location outside densely populated areas.”

For NREP, the specific project is an element in the implementation of a plan to ensure that all NREP’s properties are CO2-neutral in the long run.

According to Johan Hallgren Madsen, there is a huge potential for solar cell power on logistics properties, both financially and logistically, for example. NREP manages the logistics properties through the company Logicenters. Logicenters is a developer and owner of modern logistics facilities throughout the Nordic region and has over DKK 1.3 million. sqm. logistics space. It includes properties that are leased to companies that give high priority to the green transition: It is e.g. Postnord, Bring, Speed Group, and DHL.

Large roofing systems have the largest financial gain

Johan Hallgren Madsen highlights the logistics properties as particularly suitable for photovoltaic systems:

“The buildings have large flat roof areas which enable large and cost-effective facilities. Our properties typically have roof areas of 15-60,000 sqm. Furthermore, there are typically no problems with restrictive local plan requirements. This is due to the properties’ location outside densely populated areas.”

Sales Director Jesper Sidenius from Solar Nordic is the supplier of the photovoltaic systems. He also highlights facilities on flat roofs as the solution that most easily provides financial gain.
“The systems can be installed separately with ballast, and this means that you do not make any breakthrough of the roofing,” says Jesper Sidenius.

Thus, the cost of establishing this type of system is much less than similar systems on properties. In situations where the roof has a slope and where a direct installation with fittings is necessary.

A Financial gain for both parties

According to Johan Hallgren Madsen, the method used in accordance with the agreement when NREP establishes facilities for business tenants is that it is NREP that invests itself. It is also them who are responsible for operation and maintenance.

The tenant then receives the electricity produced. However, NREP – and other landlords – are legally prohibited from selling the electricity. This means that you have to ensure the same result differently.

“We make the facility available to the tenant, who in turn pays a higher rent. The tenant gets access to all the electricity produced and uses as much as possible and sells the surplus electricity to the grid. The tenant’s savings on the electricity bill, exceeds the rent payment due to this the tenant achieves a net saving from day one,” says Johan Hallgren Madsen.

For NREP, the result is still a satisfactory financial gain, which, however, is typically below their general required rate of return. According to Johan Hallgren Madsen, this model can be financially connected. Even if the tenant’s alternative electricity price is as low as 60 øre per. kWh. This can be the situation when it comes to pure process flow, where the tax is refunded in full.

NREP and their tenants are looking forward to both environmental and financial gain when, during 2020, they receive 7 MW roofing systems at 5 locations in Denmark.