STRATA IS ELECTRIFYING
from, a guest writer's strata musings ...
A Quick Take
In today’s guest-writer article by Brent Clark, he discusses the transition by Australian strata apartment buildings into a sustainable energy future and where to next. It’s a very well reasoned, technically supported explanation about energy issues and opportunities for strata buildings. Plus, it’s a fascinating story of how one person’s interest found a home in our sector to develop these initiatives.
[a 10:00 minute read, with 1991 words]
INTRODUCTION
From time to time, I publish articles from guest writers who have different perspectives and ideas on strata issues to expand and challenge our knowledge and thinking.
Today our guest covers a journey towards high density energy efficiency.
I hope you enjoy the article.
February 27, 2024
Francesco ...
The Full Article
ELECTRIFY STRATA: RESETTING PROPERTY VALUATIONS FOR ENERGY SUSTAINABLE APARTMENT BUILDINGS
by Brent Clark
My journey and an introduction to sustainable strata energy
I’ve spent a decade assisting strata apartment buildings with their transition to sustainable energy.
My strata energy journey started with managing a number of projects in my own apartment building including reducing energy use and improving the sustainability of that energy. That led to a realisation that other strata buildings wanted to do the same and I founded Wattblock in 2014.
Since then, Wattblock has assisted over 1,000 strata buildings do the same thing. Plus, I’ve also been to Shenzhen in China, Washington D.C. and most states in Australia allowing me to learn more about how we can retrofit existing apartment buildings for a new energy future.
Today, the models for strata building electrification and sustainable energy strategies have become both simpler and more sophisticated and I believe we’ve reached an inflection point.
Strata building electrification in Australia
The term electrification was brought into the lexicon by Saul Griffith, author of ‘The Big Switch: Australia’s Electric future’ which sets out an inspiring, practical plan to transform Australia's energy system and supercharge our response to the climate crisis.
So, we should electrify everything in Australia.
We should upgrade the 101 million machines which currently use fossil fuels such as cars, gas hot water boilers, gas cooktops, etc to their electric equivalent. Then we should power these machines with solar energy. In the future, we should power them with solar energy stored in batteries. And, we should sustainably electrify all strata buildings.
Why? There’s a few very simple reasons.
First, Australia is a leader in sustainable electrification and we have two energy ‘godfathers’.
There’s Professor Martin Green who invented the PERC cell at UNSW which is a technology embedded in over 75% of solar panels manufactured globally.
And, there’s tech billionaire, Mike Cannon-Brookes. His side projects include influencing Elon Musk to install a big battery in South Australia, influencing AGL to shut down coal fire power plants faster, an audacious plan called Suncable to build the world’s largest solar farm in the Northern Territory and export electricity to South East Asia and investments in climate tech companies such as Brighte, through Grok Ventures.
Second, Australian solar energy is the cheapest form of energy humankind has ever created. Australia has an installed cost per watt of $1 for solar, far below what people pay for solar to be installed in the Netherlands, Japan, Czech Republic, the USA or any other country making strides to lower energy costs.
Third, we have a natural competitive advantage because of our sunny climate. We can thank our latitude and high levels of sunshine for this. The flipside is that we have the highest skin cancer rates in the world.
Fourth, Australian standalone houses have taken to solar electricity with alacrity. 3.5 million rooftops in Australia have solar systems today which accounts for approximately 37% of all standalone houses. Few people know how far Australia is ahead compared to USA [and other countries] where just over 4% of standalone houses have solar.
Rooftop Solar Installed by Country
Fifth, there’s an increasing demand for and opportunity to accelerate sustainable electricity in medium and high density buildings in Australia.
That’s because Australia is less urbanised than the USA as only about 15% of our population lives in apartment buildings [compared to 35% living in multi-unit dwellings in the USA]. However, with a cost of living crisis and higher levels of immigration, Australian strata buildings will become a larger part of the housing mix. As we move from a population of 26M to 30M, 40M and 50M, the majority of the extra people will live mostly in apartments. So, it is natural to expect that these new residences will utilise solar energy. In some parts of Sydney, a third of new apartment buildings have solar installed from day one.
Plus, greater metropolitan Sydney currently has about 50,000 strata buildings. Of these, only 1,000 currently have solar panels installed. At 3.0% of penetration, this is far behind the penetration of solar in standalone houses in Australia. However, there are individual areas of Sydney such as “The Shire”, home to the sun worshippers on Cronulla beach, where over 6% of multi-tenant dwelling have solar installed and apartment buildings in some parts of Australia have higher solar penetration than standalone houses in the USA.
Sixth, there are many new and homegrown energy innovations such as Allume Energy, which allow a single solar system to be shared by up to 15 apartments, and are starting to be installed at scale that makes it even easier to electrify them. That’s as well other new energy businesses like Wattwatchers which install electricity monitoring systems and Jetcharge which install EV charging backbones into strata buildings.
Seventh, there’s evidence that property values of properties with energy efficiency features have higher values. Domain is one of the major online real estate listing sites in Australia. Their 2022 study showed that on average, Australian apartments with energy efficiency features mentioned in their real estate listings and advertisements were worth $72,750 [or 12.7%] more than apartments without energy features.
Domain 2022 Survey of Energy Efficient Properties
About Electrify Strata
The Electrify Strata project by Wattblock recognises these opportunities [particularly the impacts on strata apartment property values] and aims to make these benefits tangible via data and technology.
So, we’ve mapped all strata apartment buildings in Sydney for energy features.
We’ve identified 49,000 Sydney strata buildings across 29 local government areas and mapped which have installed solar, batteries, EV charging, heat pumps for domestic hot water, electricity monitoring devices, embedded networks or have completed a NABERS or NatHERS energy rating.
There’s a separate google map for each local government area.
Electrify Strata has a drop-pin on a google map for every identified strata apartment building. Click on the drop-pin and you can see what is installed into that apartment building.
In the future we will also map strata apartment buildings which have a dedicated Electric Vehicle for carshare (not shared with anyone outside the building) and that have E-mobility stations for safely charging E-bikes, scooters and other vehicles and devices.
An example of the Electrify Strata map for the City of Sydney local government area is below.
Electrify Strata - City of Sydney
This map for the City of Sydney local government area can be directly accessed online here.
Electrify Strata is intended to kickstart a reset of Sydney apartment property values based upon their energy features. If it demonstrates that more energy efficiency features are correlated with increased property values in Sydney, we (and/or others) can do the same in other Australian capital cities.
Why [and how] Electrify Strata will work
At Wattblock, we know there is demand for energy sustainable apartments and many benefits that can be achieved via Electrify Strata. Some examples include the following.
We have been approached by buyers agents asking where their clients can buy in an eco apartment block and we’ve made lists of the top 40 most sustainable apartments blocks to fulfil this demand. These lists have also been picked up and used by Urbanlist.com.au, Domain and Realestate.com.au.
Government can provide free energy audits, and subsidies for installing solar, EV charging or heat pumps into residential apartment buildings. And, these are great ways to stimulate the early adopter apartment buildings … but it will not be enough to complete energy transition across all apartment buildings.
In the same way that in a triathlon it is critical to minimise the time spent in transition between the swim leg and the run leg or the run leg and the bike leg, we need additional forces to push us through the current energy transition challenges with our apartment buildings.
I believe, that by making it clearly visible which strata buildings have these energy features in a particular street, or a suburb or a local government area, we can bring a ‘keeping up with the joneses’ effect into residential strata apartment building electrification.
Eventually, apartment buildings that have completed the sustainable energy transitions will provide an example for and create peer pressure on other strata apartment buildings and communities to start and finish their own energy transitions.
Meanwhile, owner investors in apartment buildings which have features such as EV charging infrastructure, will see that they can achieve higher and premium rents, compared with those in the same locality without those facilities. Solar powered EV charging might also command a premium over other EV charging methods.
Lower apartment building operational expenses that result from solar energy will assist building cashflows, help grow capital works fund reserves and/or lower strata levies.
Finally, what do Australians really have a preoccupation with? It’s property prices and values. So, it is inevitable that operational efficiency in residential apartment buildings achieved through renewable energy will lower operational costs, improve rental yields and increase property values at the individual apartment level.
Conclusions and an example
After spending a decade with strata committees focussed on fine-tuning expectations and savings over the payback periods of various energy efficiency upgrades, the conversation is changing and is moving to more sophisticated financial models, more detailed and transparent data, and property value impacts.
The sustainable electrification of apartment buildings is becoming a multi dimensional economic matter, and just really good capitalism.
We need to continue to educate stakeholders and, in particular, improve the financial literacy of strata owners, strata committees and strata managers, so that they understand the opportunities and don’t miss the boat.
As an example of the that economic sense, a strata building of 24 apartments in Glebe analysed it this way: by spending $130,000 collectively on a solar photovoltaic system and a common area heat pump they could create strata apartment property value increases of $1.6M. So, doing so was a no-brainer for them and we didn’t even have to consider contentious issues such as carbon emissions or net zero which can often confuse and derail many strata buildings from making decisions.
Plus, Wattblock has shown that when you convert a solar system’s energy savings into an interest rate; it delivers a return of up to 14% PA, which far outpaces the return on the capital works fund invested in a major financial institution.
So, it’s 2024, it’s time to Electrify Strata, and for strata apartment buildings and owners to save and make money.
Some further resources
The Electrify Strata homepage is here.
A short video on "What is Electrify Strata" can be found here.
Join the Electrify Strata community on Whatsapp here.
Brent Clark,
Wattblock
ABOUT BRENT
Brent has been a strata committee member for 20 years and as Chairperson in a block of 40 in Chatswood managed a 76% reduction in common area bills over a 3 year period. His building was also one of the first 10 apartment buildings to get a NABERS for Apartment Buildings rating, scoring 5 stars for energy. He is CEO and founder of Wattblock, which he started in 2014 to accelerate the transition of strata buildings to sustainable energy. In the last decade Wattblock has assisted strata buildings housing over 85,000 residents with the transition to solar, batteries, EV charging, heat pumps and energy efficiency. During this time, he has worked with a dozen local councils and two state governments, as well as six universities. He hold degrees in science, law, applied finance and an MBA and is an accredited NABERS for Apartment Buildings assessor.
Get in touch with Brent at Wattblock - https://www.wattblock.com/