RESCo is behind major solar installations for IKEA Canada, Toronto’s Yorkdale Shopping Centre, and the University of British Columbia. (Yorkdale Shopping Centre via Facebook)
Covering warehouses and shopping malls in solar panels could become as common as equipping office spaces with air conditioning, according to a large-scale Canadian installer.
But the realities of commercial real estate may slow the “rapid acceleration” some financial experts are calling for.
“In the last three years, I’ve seen pretty significant percentage jumps in terms of solar going on. We’re seeing it on larger and larger properties,” RESCo Energy president Fidel Reijerse told Yahoo Finance Canada. “[But] I don’t necessarily see good solar being rolled out on every roof in a short period of time.”
Based in Mississauga, Ont., RESCo provides turnkey solar services to commercial and industrial customers across Canada. The company is behind major installations for IKEA Canada, Toronto’s Yorkdale Shopping Centre, and the University of British Columbia. Real estate developers Oxford Properties and Cadillac Fairview are also customers.
In May, Morgan Stanley estimated on-site solar would be “in the money,” or cheaper than buying electricity from the grid, by 2025 for 90 per cent of America’s top 50 real estate investment trusts. In a 72-page report, the Wall Street investment bank says it will take about US$500 million in capital spending by the industry to fill roughly 40 billion square feet of available space from U.S. real estate and commercial trucking properties. The analysts predict a “rapid acceleration in distributed/on-site clean energy generation” will cause “material revenue accretion” as well as environmental, social, and corporate governance (ESG) benefits for the industry.
Important considerations
Canadian real estate development company Dream Unlimited has started small. Lee Hodgkinson, Dream’s head of sustainability and technical services, says solar panels installed on 14 rooftops in Western Canada and the Netherlands have helped the company understand the opportunity.
“It’s profitable, just to be blunt,” Hodgkinson told Yahoo Finance Canada. “We’re seeing attractive un-levered returns of eight per cent across our solar portfolio.”
Dream owns an estimated $24 billion in assets across North America and Europe. Hodgkinson says about 1.3 million square feet of rooftop is currently under consideration for solar deployment.
“That would add another up to 10 megawatts, which would be a 50 per cent increase versus where we currently are,” he said. “We do have 60 million square feet of roof top. So, I do think we’re well-positioned to become one of the largest players in this rooftop solar space.”
How quickly panels are fixed to roofs will depend on factors unique to each building. These include the age of the roof, the electrical capacity of the building, and how long the owner intends to own the property.
“Those are the types of things that impact the ability to move quickly,” Reijerse said. “You can imagine if a building has a 15-year-old roof, it’s a bit of a challenge to put solar on. Halfway through the life of that solar, you’re going to have to take it off, re-roof, and put it back on. There are costs associated with that.”
Managing expectations
Reijerse estimates large real estate investment trusts re-roof just five per cent of buildings in their portfolio each year.
“That’s why you don’t see anybody say, ‘Let’s just roll out [solar on] 100 buildings,” he said.
While Reijerse has dim expectations for a solar boom among today’s commercial buildings, he sees on-site installations becoming as commonplace as air conditioning, as more newly-constructed warehouses, malls, and big-box stores come designed “solar-ready.”
“It’s going in that direction,” he said. “It has become less of a novelty, but it’s not yet at the point where it’s just another building system.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
