It’s not easy being green but free solar panels may help

Published 18-SEP-2018 16:36 P.M.

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4 minute read

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First, the bad news: in the last three decades, close to half of the Arctic ice cap has melted away, the world’s oceans have acidified, much of the West of the United States has burned. Global temperatures have risen; and Australia has seen more intense rainstorms (and higher instances of extreme flooding). Over the past 50 years, figures show that the amount of water falling in thunderstorms has increased at a rate 2-3 times higher than anticipated by previous climate change predictions.

Now, the good news...

In July, the total renewable share of all electricity supplied to Australians in August rose to 25.6% (according to The Australia Institute). This is thanks to windy weather and a variety of new solar and wind projects reaching completion.

In response to July’s record-breaking stats, August went all ‘Hold my beer’, producing a month of records including 25.6% of electricity supplied to the market via hydro and solar services (a market which serves approximately four out of five Australians). In addition, average daily output from wind and grid scale solar generators were also at record levels.

If you have been following this column, you would have read that state governments in Queensland, Victoria and the ACT are prepared to go it alone and pursue their respective ambitious renewable energy targets in the wake of Turnbull’s failed NEG.

Below is a look at one of Victoria’s recently announced initiatives. ­

Vic government solar initiative

Last Friday, the Andrews government in Victoria kicked its ‘energy revolution’ plans up a gear.

The state will help foot the bill for the installation of rooftop solar panels for 650,000 homes in the next 10 years. The scheme means any household on an annual income of less than $180,000, with a home valued at less than $3 million, can apply to Solar Victoria for a rebate of up to $2225 on the installation of solar panels.

The pledge will cost the state government $1.24 billion, but is apparently just one of a host of renewables initiatives set to come. Bonus: those who already have solar panels can apply for a very handy 50% rebate on the installation of a solar battery (up to $4838).

Players in the private sector are also working hard to implement green energy initiatives, one of which is GPT Group.

GPT Group targets 0 emissions for $7.8B fund

Last week, the GPT Group decided it would angle for its own low-carbon spotlight through the announcement of an ambitious ‘net zero carbon emissions’ target for its GPT Wholesale Office Fund (GWOF). If it sticks to its target, GWOF’s portfolio of 18 buildings in Sydney, Melbourne and Brisbane will all be carbon neutral by 2020.

The GPT Wholesale Office Fund portfolio comprises $7.5 billion in office assets located in the Sydney, Melbourne and Brisbane CBD markets.

The plan is to meet this through reducing energy consumption (particularly via the rollout of low-energy LED lighting), investing in on-site renewable energy generation (likely photovoltaic solar cells), and purchasing renewable energy. The Group predicts that just the first cab off the rank – LED lights – could reduce carbon emissions by 3,000 tonnes a year.

This week’s Green Spotlight: SECOS Group (ASX:SES)

Maybe Kermit (the frog) was right when he sang, ‘it’s not easy being green’. Or perhaps he should’ve sang, it’s not easy going green.

Yet, here we are, with the green change well and truly happening — albeit at a pace some believe to be deleteriously slow while others see it as too fast.

Just ask SECOS Group (ASX:SES).

SES is discovering that the first few years ‘being green’ can be a bit on the bumpy side. The $17.4 million capped company is a leader in sustainable packaging formed through the merger of Cardia Bioplastics and Stellar Films Group in 2015. It develops, manufactures and markets its ‘cast films’ and patented renewable resource-based materials and products.

The company holds an extensive patent portfolio, with its current and future growth tied largely to the global trend towards sustainable packaging — fuelled by a growing awareness of the need to move away from traditional plastics, and the broad scale environmental degradation wrought by them.

Its share price has been underwhelming, however, and is down 9.64% over the last year. That said, SES recently reported growth in sales, improved gross margin and reduced fixed costs for FY 2017-18. In the last three years, the company’s gross margin has improved from 6.7% in FY16 to 11.2% in FY17 and 12.9% in FY18.

Most of that growth came from its bioplastics, which grew by $1.3 million compared to the previous year — an increase of 30%.

Meanwhile, its sales in traditional plastic stayed about the same. Investors can only hope that’s a bit of an indicator of where its future blue sky potential might lie; its forward-looking, environmentally responsible, patented bioplastics. Time will tell.

This article is General Information and contains only some information about some elements of one or more financial products. It may contain; (1) broker projections and price targets that are only estimates and may not be met, (2) historical data in terms of earnings performance and/or share trading patterns that should not be used as the basis for an investment as they may or may not be replicated. Those considering engaging with any financial product mentioned in this article should always seek independent financial advice from a licensed financial advisor before making any financial decisions.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

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