Reduction of carbon footprint by the logistics real estate industry has become a priority, as environmental, social and governance (ESG) factors are becoming more critical in how developers, landlords, and tenants make decisions and plan their strategies.
As we try to reach net-zero carbon goals in Asia and the rest of the world, solar energy is becoming more popular as a source of cheap and clean energy for the environment.
Solar energy provides many benefits, but the two most important ones are that it facilitates energy security and reduces dependency on fossil fuels.
This also means that energy costs will be lower and the value of assets will improve. According to the International Renewable Energy Agency (IRENA), by 2025, 23% of the ASEAN region’s primary energy will be renewable, up from 9.4% in 2014.
Developers are increasingly utilising solar photovoltaic (PV) arrays on the rooftops of warehouses to demonstrate their dedication to environmental concerns and compliance with increasingly stringent building requirements.
The optimum tilt of panels to receive maximum solar power differs depending on the location on Earth where the solar panels are to be installed. Generally, it is best facing north or south, and the degree of tilt depends on how far you are from the equator. The ideal orientation in Malaysia is 5~8 degrees facing south.
As noted by The Edge, “With its favourable geographic position and considerable irradiance, Malaysia’s rooftop estate offers over 4GW of solar potential across public, commercial, and industrial rooftops.”
Most industrial warehouse roofs are made with standard standing seam built-up systems that are flat enough to hold large PV arrays that cover most of the roof’s surface. Leading “big box” developers are changing their typical base design criteria to ensure the building structure can hold a 100% PV roof covering.
Rooftop solar is one of the most cost-effective ways for warehouses to cut CO2 emissions, and the capital increase needed to upgrade the frame is small compared to the long-term benefits. Because energy costs are going up, the payback time for the initial capital investment is now as short as four to six years, and operational energy costs are cut by 40 to 80%.
The problem with speculative construction is that it does not consider the future occupants and their energy requirements. Most of the time, the minimum amount of PV needed to meet BREEAM and EPC standards is installed during base construction, with the idea that more can be added after the tenant moves in.
To address the above, a photovoltaic feasibility study is needed to create a custom energy profile based on the specific energy needs of the occupant. For instance, if the occupant has a high energy need during the day (when solar output is high), they can use solar power as their primary energy source and reduce peak demand from an already overburdened national grid. Excess power might theoretically be exported back to the grid, earning cash and offsetting energy costs, if the occupant’s energy consumption extends beyond daylight hours and battery storage is utilised.
There is also an alternative model for solar power systems, whereby investors foot the bill of solar panel installation at the tenant’s premise. The tenants are subsequently charged a discounted rate for the electricity bills, with investors owning whatever excess electricity.
Solar energy is a specialised market, and a highly skilled expert is essential to the success of each project. Hence, collaborating with developers, landlords, and solar power system providers at the appropriate moment is necessary.
We all know about the advantage of solar panels. solar panels can be installed on many places also – residential roofs, commercial building roofs, warehouse roofs or even bare piece of land. Why do we think it’s great to have solar panels on warehouse is because we have the huge roof area to be utilized, without affecting the land footprint.
In light of the energy crisis and the need to improve ESG credentials, putting solar PV on warehouse roofs makes a lot of sense from a financial and environmental point of view. This is a massive opportunity for the logistics industry. The solution is straightforward: invest now and save later.
Ready to go green and ensure that your warehouses comply with ESG standards? Contact us today to receive a complimentary assessment from one of our consultants.