New Energy Expert Insights: Is C&I Solar the next big generator?

Hot off CBRE IM’s investment into Green Peak Energy, in the next instalment of our New Energy Expert Insight series we look to the rooftops, and arguably the most influential segment of electricity generation – rooftop solar.

Supercharged by subsidies, Australia’s thirst for energy independence has resulted in Australia having some of the highest penetration rates of residential solar. However, the commercial and industrial sector has lagged, until now.

Power prices, regulatory change, ESG goals, energy security, equipment and installation costs (including large batteries), all combine to point to one conclusion – the C&I market is primed for exponential growth. With the potential not only to catch-up to residential solar but surpass and not look back, the C&I market has the potential to become the next dominant influence in the National Electricity Market.

So how will the vast untapped opportunity of C&I solar play out?

Matt Baumgurtel – New Energy lead at law firm Hamilton Locke, sat down with CBRE IM, Green Peak Energy and Pottinger to discuss the rapidly expanding and quickly evolving C&I market, and what opportunities lie ahead for C&I developers and investors. We identify the opportunities available, the challenges to be navigated, and the risks to be mitigated.

One thing is clear and is common to all rapidly evolving sectors – the critical importance of partnering with experienced players, and the value of advisors with deep market knowledge and current, directly applicable sector experience.

In this first of a two-part discussion, we explore the macro themes driving the C&I solar market and the current and future opportunities created by the exponential growth of the market. In part 2 we dive deeper into how the sector is evolving (both in Australia and internationally) and how investors and developers can stay ahead of the curve and win the impending C&I battle.

You can access previous New Energy Expert Insights here.

Hamilton Locke is very pleased to have assisted GPE in relation to CBRE IM’s investment.

The players and the deal

Matt was joined by the key individuals who lead the CBRE | Green Peak Energy transaction; CBRE Investment Management (“CBRE”) Managing Director, Direct Private Infrastructure Investments Asif Hussain and Director David Xu, Green Peak Energy (“GPE”) CEO Myles Carrucan and General Counsel Anthony Headlam, and Pottinger CEO John Sheehy and Senior Vice President Rodrigo Arias.

GPE is a leading developer, owner and operator of behind-the-meter and rooftop solar solutions for commercial and industrial customers. Founded in early 2017 by leading players in the Australian renewable energy, infrastructure and capital markets sectors, GPE has capitalised on the growing demand for C&I solar in Australia.

CBRE’s investment into GPE is one of the largest investments in the Australian C&I solar market, highlighting the rapidly progressing nature of the C&I sector both in Australia and internationally.

This investment marks CBRE’s first foray into the Australian rooftop solar market, with Asif Hussain commenting upon the announcement, “The investment in Green Peak Energy provides an attractive opportunity to invest in the burgeoning behind-the-meter solar space for commercial and industrial clients in Australia as well as possible expansion into the broader APAC region,”

Perhaps more interestingly Asif Hussain comments “We see strong tailwinds in this sector with C&I customers increasing their focus on lowering their carbon footprint and adopting behind-the-meter renewable energy solutions.”

The CBRE IM/GPE transaction is arguably a watershed moment for C&I solar, both in Australia and globally.

It is a clear indication that the challenges of the past are quickly being resolved, creating opportunities for C&I solar to bypass some of the issues faced by residential and utility solar.

What is C&I Solar? Why has it lagged behind residential and utility scale solar? How are we closing the gap?

Commercial and industrial scale solar, or C&I solar as it is often called, refers to the installation of solar panels (and increasingly batteries) on the rooftops of commercial and industrial buildings, filling the gap between the well-known residential and utility scale solar industry sectors to create a niche, but high-performing solar market. C&I solar encompasses a wide variety of customer types, solar designs, and project sizes.

Until recently, the C&I solar market in Australia has lagged the residential and utility scale sectors.

Australia is a world leader in residential uptake of solar, with over 20% of free-standing households installed with a PV system generating an aggregate of 13 GW of rooftop solar.

Further, in 2020, Australian utility scale solar had a total capacity of 3.9 GW, producing over 3% of the total electricity Australia generated in 2020.

However, a shifting perception of clean energy, uncertainty in wholesale electricity prices and a lack of resources available to build large PV projects is driving investors (and customers) towards C&I solar.


John Sheehy suggests that the difference in uptake of residential and C&I solar has to do with the customer, “Think about what you’re selling, and who you’re selling to. These customers are corporates for whom their core business and the people in their procurement teams will not necessarily be considering the benefits of utilising solar.”

Whereas the individual customer receives a personal benefit from choosing rooftop solar, for corporate clients it is often primarily an economic decision. Businesses are often slow to adopt complex, innovative solutions to broader company problems, particularly where they relate to both financing and technology; however, substantial increases in retail electricity prices plus reductions in rooftop PV costs have closed the gap, with many commercial customers appreciating the energy independence gained from installing rooftop solar systems. By utilising available real estate, whether it’s rooftops or land, businesses can reduce their dependency on, and concerns with regards to, market and grid specific factors.

Increasing ESG considerations for businesses have also become a persuasive tool in the push for commercial solar facilities.

Many companies have now seen C&I solar deployed successfully overseas, particularly in the US and Europe, and are looking to roll out the same model for their Australian assets. Consequently, many Australian companies with international counterparts are under pressure to adopt a green approach to energy.

Over the last 12 months, a sustainability overlay has been almost as much of a motivating factor as cost savings in terms of catalysing these kinds of transactions, to the point that some customers are willing to jump in purely on a break-even basis.

However, Myles Carrucan proposes that the economic benefits are still the driving factor for most customers.

“We haven’t encountered many customers that are willing to incur additional cost to go green, but a lot of them are really just happy to break even for now”, he says.

Scale and infrastructure

Scale and infrastructure have also impacted the relatively slow development of C&I solar in this market, being a smaller scale and a more fragmented way to get to scale when compared to utility scale solar.

However, John Sheehy believes that this is also an advantage of C&I solar, “There’s a logical adjacency in terms of the property component plus diversification of customer and site which removes some of the ‘boom or bust’ factor that is inherent in utility scale projects. Ultimately, when you see the source of transactions, like the CBRE IM / GPE transaction, this is pure play infrastructure investing and the pursuit of long-term annuity income.”

This shift has become more apparent in recent times, with issues and delays in development and construction in the utility scale segment, primarily due to the strength and capacity of the electricity grid, uncertainty in wholesale electricity prices, and a lack of resources available to build large PV projects.

Investors that have previously expressed an interest in utility scale solar are now turning to the C&I market to fill the gap, driving significant investments in rooftop renewable energy.

“I think the appetite is there,” says John Sheehy, “the attractions of the C&I market are a way of circumventing some of the challenges of utility scale projects that have arisen in the last two years or so.”

Ongoing maintenance of these infrastructure assets has also improved, with developments in remote monitoring reducing the ongoing maintenance costs and improving the operating efficiency and generation levels of commercial systems.

Regulatory changes

Despite the fact that Australia doesn’t currently have in place any persuasive mandates for companies to adopt rooftop solar at a federal level, at an international level there’s a big push for companies to green up their energy use and to promote the security of electricity supply.

Asif Hussain, Managing Director, Direct Private Infrastructure Investments at CBRE Caledon Capital Management, says, “C&I solar is being adopted more frequently in Australia by companies wanting to lower their carbon footprint”.

This shift in customer perceptions is benefited by the possibility of impending regulatory changes across the solar sector, creating the potential for the aggregation of C&I rooftop generation systems. Regulatory changes in the C&I sector will make it viable to build rooftop systems with the ability to generate well above the anticipated demand of the occupier of the building, allowing for part of the generation from the rooftop system to be exported to the grid.

What are the opportunities for investors in the C&I market?


As the Australian C&I market hasn’t advanced at the same rate as utility scale and residential solar, this creates a very attractive prospect from an institutional investor perspective. The market is still young, and it hasn’t been overpriced yet, so investors have the potential to “ride those waves” as the market matures.

This is particularly relevant now, as the market transitions from emerging to mature – it’s still an early mover advantage market, as evidenced by the recent acquisition of Solgen Energy Group and Epho by AGL Energy earlier this year. With CBRE IM’s investment into GPE upping the stakes, this investor interest is only expected to increase over the next few years.

As these market leaders take up an increasingly significant share of the C&I market, at some point smaller market players will look to seek strategic options.

Based on Asif Hussain’s experience, this is a direction that many market players will look to. “Not everyone is going to get funding,” Asif says, “To the extent that they don’t have funding, they’re going to look for an exit which creates an interesting M&A opportunity for larger players or players with greater access to funding”.

John Sheehy agrees, “Whether they have three systems and 500 kilowatts or 20 megawatts, solar developers will eventually bump into that challenge when the big players arrive. That naturally lends itself to a consolidation over the next 18 to 24 months which should be pretty interesting.”


Opportunities also abound internationally. The same macro forces of higher power prices, regulatory change, ESG goals, energy security, equipment and installation costs (including large batteries) will influence markets across North America, through Europe and into Asia. The international C&I market is primed for exponential growth.

Like in Australia, countries and regions that have high solar resources often focus on utility and residential scale solar developments before considering C&I solar. International solar markets such as the US, especially the southern US, some regions in Asia, and Europe will provide C&I opportunities at a scale many multiples the size of the Australian market.

CBRE in particular has a keen interest in the international C&I market, undertaking recent transactions in the United States including their recent partnership with Altus Power to advance clean energy generation across commercial and industrial properties.

Asif Hussain hopes to achieve the same goals through their investment into GPE, “The Green Peak Energy team has built a strong business delivering Power Purchase Agreement solutions to help lower energy costs for their customers. We are excited to partner with Green Peak Energy and believe that this partnership can help accelerate their growth delivering on-site clean energy solutions for businesses and property owners.”

So who wins the C&I battle, and why?

Over the next two years, C&I solar is expected to expand grow exponentially, with enormous opportunities for investors, developers, and customers alike.

With a shifting perspective of green energy and economic gains in the commercial sector, C&I solar has the potential to overtake residential solar as the largest generator in the national electricity market, with significant and wide-ranging impacts for the wholesale market.
Based on their recent market success, and long-term market share of the C&I solar market, GPE are leading the race.

Pottinger has high hopes for the future success of GPE. Rodrigo Arias, Senior Vice President of Pottinger, anticipates that “GPE is well poised to come out on top of the capital shootout that the C&I market is likely to face when all of the “low hanging fruit” in the market is taken up by different players. GPE’s ability to understand credit risk and play along the credit risk curve and price in a more bespoke way will eventually set them apart from other market players”.

Current market investors are also expected to achieve significant wins through their investments into the C&I market, their early entry into the market bypassing some of the issues faced by residential and utility solar investors.

In the coming years, investors such as CBRE IM will be looking to add to their portfolios through the acquisition of smaller market players, committing significant amounts of funding into the advancement of clean energy generation across commercial and industrial properties.

In part 2 of this New Energy Expert Insights, we will lift the lid on the opportunities currently available in the C&I solar market, explore how the sector is evolving (both in Australia and internationally) and discuss how investors and developers can stay ahead of the curve to win the impending C&I battle.

The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.