“We are positive about the announcement as the successful installation of the solar PV (photovoltaic) system could reduce electricity usage by about 30%, which lowers input costs and improves margin.”
“Note that the energy cost amounted to 5-6% of the group’s total operating expenditure in FY2022,” said MIDF.
Under the agreement announced yesterday, Gsparx will install and maintain a 77,000 kWp solar PV system at Aeon malls and Aeon BiG outlets nationwide for 25 years.
Aeon will not incur any cost for installing or maintaining these solar panels, which are owned by Gsparx, under the “zero-capex” agreement. The group will only pay the monthly solar energy rate.
The installation of each PV site costs about RM3 million to RM4 million and will be invested by TNB to encourage clients to participate in its renewable energy initiatives and meet the net-zero carbon target by 2050.
The first phase of the solar PV installation will be carried out at 11 AEON malls this year. As of FY2021, Aeon had 28 malls.
The first installation was completed in October 2022 at the Alpha Angle mall in Wangsa Maju, which featured 1,513 kWp of solar PV on the rooftop and the ground-level open-air parking lot.
According to MIDF, the agreement fell under TNB’s self-consumption model (Selco) as an initiative for users to generate electricity from the solar PV system to offset or lower their electricity bills.
Under the Selco model, users will be able to utilise all the electricity produced by solar panels, but any surplus generated cannot enter the utility network.
This is useful for buildings like shopping malls which constantly consume electricity every day.
In a press statement yesterday, Aeon deputy managing director Tsugutoshi Seko stated that the group is committed to accelerate its sustainability initiatives with the installation of PV systems in its malls.
MIDF maintained a “buy” call with a target price of RM1.90 on the counter.
Aeon remains the research house’s top pick in the sector, owing to the company’s expanding in-house brands at competitive prices and increasing cost efficiency.
At 12.23pm, Aeon’s share price was flat at RM1.28, giving it a market capitalisation of RM1.8 billion.