Rooftop solar panels spanning the equivalent of seven football fields are set to be installed this fall in phase one of a 3.3-million-square-foot industrial park in Milton, Ont.
The $825-million James Snow Business Park, developed and designed by Oxford Properties, puts sustainability at its core, including LED high bay lighting fixtures, electric-vehicle charging stalls, and parks and connections to local walking trails. The solar installation is Oxford’s largest yet.
The development highlights growing interest by property owners in solar power as a financially feasible option to address rising electricity costs, help reduce the carbon footprint of buildings – a major contributor to greenhouse gas emissions – and attract preferred tenants.
At the James Snow project, the rooftop solar panels will generate power for tenants at a predictable price without them necessarily relying on the provincial grid.
“[Solar] is increasingly important as [tenants] look to reach and meet their own ESG [environmental, social and governance] goals for their companies,” says Jeff Miller, Oxford’s head of industrial. “We see this as a differentiator. There is not a lot of solar on buildings in the Toronto market.”
What accounts for solar’s raised profile?
Plenty, says John Staneko, president and chief executive officer of Green Integrations Inc., Toronto-based provider of turnkey renewable energy and cleantech projects.
He cites technical improvements and declining costs of solar equipment, rising electricity prices and the federal government carbon tax. Meanwhile, a new federal clean technology investment tax credit equal to 30 per cent of eligible equipment, including renewable energy and storage, combined with other rebates, could cut the payback period on solar panels to between five and seven years, he estimates.
One of the biggest opportunities to increase return on investment in commercial real estate will arise with the decentralization of the electricity grid, says Mr. Staneko.
”Commercial and industrial buildings are ideally located in high-electricity demand areas that require on-site generation and storage of electricity,” he explains, “and they have the physical footprint to house these systems.”
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A rendering of the James Snow Business Park in Milton, Ont.. The rooftop solar panels will generate power for tenants without them relying on the provincial grid all the time.Oxford Properties (Supplied)
Still, barriers remain.
“The lack of affordable and efficient storage technology – that is a big headwind,” says Tonya Lagrasta, head of ESG for Colliers Real Estate Management Services in Canada. “Existing electricity grids might not be able to handle the input of solar energy, which could create some technical challenges.”
Meanwhile, companies are still trying to respond to federal greenhouse gas emission targets for 2030 and 2050. “How are we going to get there is the multibillion-dollar existential challenge that people are faced with now,” she says. “So, on-site solar is one of the options.”
Another barrier is lack of knowledge, says Curtis Craig, president of Inferno Solar, an Edmonton-based turnkey provider of solar installations. Solar panels generally have a life expectancy of up to 25 years, but clients know little about their durability.
”We see this as a differentiator. There is not a lot of solar on buildings in the Toronto market.”
— Jeff Miller, head of industrial at Oxford Properties
With rising electricity rates in Alberta, he says, businesses now see solar power as a cheaper alternative to the supply from the provincial grid.
“The pitch to tenants is that their electricity costs will either stay the same or go down,” Mr. Craig says.
As developers incorporate solar in projects, understanding tenant energy needs is crucial.
Dream Industrial REIT, which set a company-wide target of net-zero Scope 1 and 2 emissions by 2035, has so far put rooftop solar on 16 buildings in Canada, with seven installed in 2022-2023 at a cost of $4.5-million.
Rooftop solar power helps landlords supply electricity to tenants at a lower, more dependable price than the provincial grid, says Bonnie Crews, director of sustainability and portfolio management at Dream. “It makes economic sense, it enables us to build stronger relations with tenants and gives us a competitive edge,” she says.
The company has about 1.3 million square feet in the pipeline in Canada and Europe “where we are exploring future solar opportunities,” she says. “We are committed to continuing the pace going forward.”
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Rabba Fine Foods is currently installing solar panels on the the roofs of two of the company’s distribution warehouses.John Bregar Photography
In Calgary, Hopewell Development first included solar in its commercial building designs in 2021, vice-president of construction Derek Fox says, with five solar-included projects currently under construction. For tenants, he says, “providing them something that will offset their ongoing expenses is going to be beneficial in the long run and allows them to tie that to their own ESG metrics.”
As companies set carbon reduction targets, some are rethinking how to get there.
For example, Vicwest Building Products, headquartered in Burlington, Ont., previously relied on carbon offsets to reach its targets.
But since 2020, the company has looked in-house to achieve its carbon-cutting goals, with solar one part of the solution.
“Rather than investing in carbon offsets, we put the money into an opportunity that will solve the problem, not just mask it,” says Bernard Lewis, Vicwest’s vice-president of operations. By 2030, the company aims to have 60 per cent of its energy requirements powered by direct renewable energy, generated from rooftop solar and Hydro-Quebec’s hydroelectric grid.
This year, at its Stratford, Ont., facility, Vicwest installed 1,206 rooftop solar panels expected to produce 86 per cent of its power. By 2030, the company expects to install solar panels in all its wholly owned facilities.
“Solar is our number one opportunity for reducing carbon emissions across the country,” Mr. Lewis says.
A new rooftop installation at Rabba Fine Foods in Mississauga illustrates the evolution in thinking about solar.
Several years ago, the family-owned company hired Mr. Staneko’s firm, Green Integrations, to install LED lighting. After several years of discussions with Mr. Staneko, Rabba executives concluded they could save on energy costs with solar.
With solar panels currently being installed on the roofs of two Rabba distribution warehouses, company president Rick Rabba says, “we are generating enough solar-backed electricity without importing it from the grid,” save for some exceptions in winter.
He views his company’s $2-million solar project as “future-proofing against risks such as electricity rate hikes.” For companies expecting to stay in their buildings for decades, he adds, solar is “a no-brainer.”