Property giant SM Prime Holdings Inc. has harnessed solar power for its shopping mall in Xiamen, its first and most mature commercial hub in mainland China, pioneering this strategy in the city while stating its commitment to cut greenhouse emissions and optimize energy efficiency.
SM Prime—soon to be Southeast Asia’s biggest property company once its consolidation with affiliate property firms is completed—on Monday announced that it had built a 1.1-megawatt rooftop solar power project at its SM City Xiamen mall in Fujian province, one of its five operating malls in mainland China.
The project involved the installation of 3,740 solar panels on the roof of SM City Xiamen’s Phase 1 and Phase 2 (SM Lifestyle Center), with a total investment of 13.2 million renminbi (RMB) or $2 million.
The total capacity of the SM Xiamen Rooftop Solar Power Project is 1,100 kilowatt peak (KWp). The average generated electricity of the project is estimated at 1.1 million kilowatt hour (kWh) a year. The company estimated that the total generated electricity of the 25-year life cycle will be about 27.5 million kWh.
“SM Prime is constantly in pursuit of the highest level of operational efficiency. We want to significantly reduce greenhouse gas emissions and operating costs by minimizing electricity consumption. In line with this, we place strong emphasis on investing in the latest innovations in sustainable and energy-efficient technology,” SM Prime president Hans Sy said in a disclosure to the Philippine Stock Exchange.
Jeffrey Lim, SM Prime chief finance officer, said in a recent ING-Financial Executive Institute of the Philippines (Finex) forum that the property firm had wanted to launch a similar solar system at its Philippine malls but noted that it was easier to do first in China due to the fiscal incentives offered for the use of renewable energy there.
Asked to elaborate on the fiscal incentives in China, Lim explained in a text message yesterday: “Forty-five percent of the cost of solar panels is given back as incentive, so the net cost to us is 55 percent.”
Asked whether SM Prime would replicate this technology in other malls in China, Lim said: “We will evaluate the installation in Xiamen first.” SM Xiamen, which started operations in December 2001, is the first mall opened by the Sy family in mainland China. Aside from SM City Xiamen, SM Prime has introduced a thermal energy storage plant in SM City Jinjiang. The ice-based cooling system fosters a large reduction in the mall’s utility and energy bills and greatly optimizes energy efficiency.
SM Prime operates 47 malls in the Philippines with a combined gross floor area of 5.9 million square meters.
For the rest of 2013, SM Prime is scheduled to launch SM City BF Parañaque. SM Megamall will be expanded with the opening of Building D. By year’s end, SM Prime expects to have 48 malls in the Philippines and five in China with an estimated combined gross floor area of 6.9 million sqm.
Last week, shareholders of SM Prime approved a P279-billion transaction that will consolidate the company with SM Development Corp., Highlands Prime Inc. and SM Land, thereby creating a company with a market capitalization of more than $13 billion. This will become the biggest property firm in Southeast Asia, edging out Capital Land of Singapore ($11.9 billion) and Ayala Land ($9.5 billion).
In China, SM Prime is constructing two more shopping malls to add to its existing five and is negotiating to build new malls in three or four more locations, top officials announced last week.
China contributes 10 percent of the mall developer’s net income but Lim said that even as the business was growing, the share would go down with the infusion of other businesses into an enlarged SM Prime.