Are you interested in solar PV for your business but not sure where to start? An expert sheds light on some common questions like: who pays for what? Should your property be south facing? And how could your finances and your emissions targets benefit?
With the overwhelming majority of companies in the UK classified as SMEs (99.9 per cent), it will be crucial for them to play their part in meeting the government’s net zero emissions targets by 2050.
Installing solar panels is a route to reducing emissions and even recouping a little extra money through lower energy bills. But for those unfamiliar with the installation options and the steps involved, the prospect can seem daunting.
Simon Nicholls (lead image, top), Managing Director of UK renewable energy developer Olympus Power, sheds some light on common issues that may be holding companies back.
How much does it cost and what are the possible savings on my electricity bill?
The bad news is that the government’s Power Fee (FiT) scheme was closed to new applicants in March 2019. The good news is that the cost of solar panels has dropped so much that the payback is even better than when it was implemented. the scheme. instead, according to Nicholls.
Installing solar panels is a route to reducing emissions and overhead through lower energy bills. Image: Olympus Power
The FiT scheme paid two types of tariffs, one for generation and one for the export of additional renewable energy produced at its facilities. Favorable rates meant it would take five and a half to six years to recoup purchase and installation costs, Nicholls explains.
Now, under the government’s replacement scheme, the Smart Export Guarantee, which began in January 2020, companies can continue to sell renewable energy to the grid, but the ‘generation’ fee is not included. However, since solar panels are so reasonable, this is by the way. “The recovery is now five years. So it’s actually better than on top of feed rates, ”says Nicholls.
However, keep in mind that these estimates generally apply to companies investing in a large solar panel installation. Olympus Power works with many SMEs with medium and large warehouses. In terms of rough figures, a 20,000 square foot warehouse will accommodate approximately 300kWp of panels at a cost of around £ 200,000 and a 50,000 square foot warehouse will allow 1MWp to be installed at a cost of £ 625,000. Facilities of this size or less do not need planning permission to proceed.
Payback is now better than on top of feed rates.
An alternative to purchasing your own panels in advance is to opt for Olympus’ Power Purchase Agreement (PPA) model. In this setup, Olympus pays for and owns everything, including the electricity generated, so to speak. They then sell the energy to the company, for a contract period of 15 to 30 years. According to Nicholls, an SME with about 1 MWp of installed solar power could expect to see between £ 35,000 and £ 60,000 in savings on their electricity bill per year.
These fully funded solar installations are proving to be a popular option. With the financial backing of a renewable energy investment company, Thrive with renewable energy, Olympus has up to £ 75 million to carry out these PPAs, and the company is busier than ever.
For smaller venues, Nicholls says the economics are not the same, as purchase and installation tend to be self-financing rather than through a PPA. But: “Even a few panels in a small unit will make a difference.” And with the panels costing much lower than they used to be, around £ 100, what you could pay for a fancy mirror from a store, he says, the initial outlay should be pretty manageable. However, be aware of installation and maintenance fees.
An alternative to purchasing your own panels in advance is to opt for Olympus’ “power purchase agreement” model. Image: Olympus Power
Should your roof face south?
Not at all, says Nicholls. “If the company has an east-west roof, it’s actually better for them than a south roof in terms of getting sunlight for more hours of the day.” A south-facing roof will get higher energy efficiency, he explains, but an east-west roof will be exposed for longer. “Modern panels are so good that we are now placing them on both the north and south of a roof.” Solar companies will use software to determine the best location and angle for maximum energy efficiency.
And here’s a fun fact. Contrary to popular belief, the UK climate is not that bad for solar power. The reason is that the panels become less efficient if the temperatures reach 30 ° C or more. “They work best at 24 ° C,” says Nicholls. “So while the English climate is not as sunny as some of the hot countries, because it is cooler, you get good efficiency from the panels.”
Are there other benefits?
Companies that have sustainability and emissions targets will look at all areas of the business, from supply chain to logistics and everything in between. “If you use a lot of electricity and have a large roof or a lot of land, then solar is a good place to start addressing those more important goals,” says Nicholls. Especially for the visual signal that it sends to customers and employees. “If you look at it from a recruiting perspective, many millennials ask themselves, ‘What are you doing to save the world?’ Then you can point to this visual message and say that we have done it as part of our overall sustainability program. “
It also points to the increasing scrutiny companies face to meet goals and contribute to a cleaner and greener world. “There are suppliers who claim to be green, when in reality what they are doing is buying something called REGO: certificates of guarantee of origin of renewable energy. “So it’s worth checking the fine print to verify that your electricity supplier is buying directly from wind and solar projects. On the other hand, generating your own electricity on site, he argues, is a clear sign that you are a company that is really taking action.
“It’s a very powerful way to show your green credentials.”
Lead image: Olympus Power