Are NZ companies thinking of investing in solar energy?

A recent study shed light on the fact that the increasing cost of wholesale power is forcing several businesses to consider investments in solar energy in New Zealand. Being able to meet the electricity requirements is becoming increasingly difficult for Companies that are largely dependent on it for their crucial production processes. This is why a shift is happening towards the use of solar energy on an extensive basis.

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Why are the prices soaring ?

Reasons such as unfavourable weather conditions and shortage of natural gas besides low levels in the hydro lake is causing the prices to go up. Enztec a manufacturing organization from Christchurch is usually dependent on fixed power contracts directed by its suppliers, to avoid having to face price fluctuations in the spot market.

 However, now the company is struggling to get a  renewed deal as several huge  electricity providers say they have nothing to spare. This has made Enztec resort to playing by the spot prices, which means that they are paying double of what they usually did per month.

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The CE of the Company, Iain McMillan was of the view that because the company has been unable to pass on this ripple of increased prices to its customers, it shall have to cut costs on research and development. He was further of the view that the company shall now invest heavily in solar energy to be able to meet its electricity requirements. Even though it is a great way to manoeuvre the business into sustainable growth, this isn’t the time for the Company to spend its limited capital on areas other than recovery from COVID related damages.

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Reliability of solar energy?

Another concern that the company has in the matter is how reliable solar energy really is. It fears that being a consumer of a lot of energy, solar energy, only subjective to how sunny it is or is not could be a weak link.

There wouldn’t’ be a point of making al the investment and setting up solar panels if weather conditions won’t be favourable and the company would still have to rely on alternative options for their electricity needs.

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Foodstuffs, the supermarket operator company is going to have to face a 70% in their new contract. It said that while there is work being done to reduce the power consumption to minimum currently, there is also the construction of one of the largest solar panels on a Foodstuffs distribution centre.