Renewable energy can be quite a complicated area, so in this article, I’m going to share with you the key things you need to know about solar energy for business in the UK.
To quickly get an estimate of the costs, savings, and return on investment of commercial solar PV for your business, use our calculator.
What are the benefits for business?
So why go solar for your business?
Sustainability has become very important as a whole, and solar has become a reliable, well understood technology to help achieve sustainability.
The costs of solar have fallen by 80% over the last decade, making it much more accessible.
It has clear long term cost savings.
It gives you long term control and budget predictability over energy spend.
Plus, it shows your organisations long term commitment to sustainability, which is becoming more and more important for investors, and for customers.
Along with that comes a benefit to your staffing and recruitment. People, particularly millenials want to work for companies that are greener, so going solar often means happier employees who stay on for longer, and it can make it easier to recruit new talent.
As a bonus, until 2023, the government is offering a 130% super tax deduction when you buy solar panels as a business.
What type of business is solar a good fit for?
A whole range of UK businesses have taken up solar in the last few years, from Amazon installing over a Megawatt worth of panels on one of their large distribution centres, right down to small business owners looking to save a few thousand pounds on their energy bills.
Any business that has physical premises (either owned or leased) with accessible roof or outdoor space can be a good fit for solar.
Almost every business uses electricity in some way, but those with larger energy use often see a higher return on investment for solar. That can be things like powering servers, refrigeration, manufacturing processes, event spaces, or simply running air conditioning for large areas.
Another use case is where the business decides to install electric car chargers as a benefit for staff and customers.
Often businesses are unable to install as many EV chargers as they would like due to local electric grid operator restrictions, especially if nearby organisations already have them installed. Solar removes this limitation and can also give a marketing boost to the EV charging installation too.
Because battery storage technology has improved at a rapid rate thanks to the demand for phones, laptops, and electric cars, it’s no longer too difficult to keep solar powering your business 24/7.
How much you can expect to save?
Now let’s take a look at the return on investment you can get with solar.
This does vary quite a bit depending on your specific business’s current situation, so I’m going to provide a guide here. Using our commercial solar PV calculator will give you a better picture.
If you get a proposal from a commercial solar installer, then they are typically able to use modeling software to give you much more accurate figures. They’ll look at your electircty bills to determine your usage patterns, where you’re based in the country, and design an appropriate system using aerial images of your roof. That way you can see the equivalent interest rate, and time for the panels to pay for themselves.
It also depends on how much electricity prices go up. In 2021 energy prices are set to rise more than average due to factors such as lower than expected supply of natural gas. The government has also agreed that we will help pay for a new nuclear power plant through our bills, and recently it was announced that this new power plant is going to cost us an extra £500m over budget.
Some businesses may be able to save up to 75% on their electric costs right away, whilst others will need to make other sustainability improvements in order to make the system work efficiently as a whole.
That can be things like better insulation, energy storage, more efficient lighting, automated building management systems, and a whole host of other improvements that can work together to save money and make for an overal ‘greener’ way to run your business.
Currently, there is also a 130% super tax deduction available for investments in your business including solar panels. Obviously I can’t give tax advice here, but suffice to say, your CFO and finance team will most likely be in favour of solar, in terms of tax efficiency but also having more control over energy costs, and being able to make better projections.
The tax deduction is available until the 1st of March 2023, so you will need to act relatively quickly to take advantage of this.
As I mentioned, these are all general figures, so if you want to get a detailed report, then use our commercial solar PV calculator.
Designing Your UK Commercial Solar PV System
What is Sizing in Solar?
“Sizing” your commercial solar PV system refers to the total kWp (peak energy output of your solar panels meausured in killowatts) of your installed system. It’s important to have the correct energy output to meet your energy needs within your business.
Sizing your solar system can be as simple as looking at your total annual energy usage over a year, and then calculating the size of solar system that you’ll need to fully “offset” your usage.
This means that over a year, your solar panels produce the same amount of energy that is used within your business, and you can reasonably assert that you are carbon neutral in energy use.
However, you may want to increase the size of your solar system to enable you to be fully running on solar energy every month, during the daytime. Simplisticly this typically means increasing the size of your solar system by 2-3x because of how the amount of sun varies seasonally in the UK.
If you want to be able to run fully from solar at night too, then you may need to increase the size of your solar install further, in order to charge a battery system during the daytime, whilst also using some of the incoming solar energy to run your business at the same time.
How many solar panels do I need for 1000 kWh per month UK?
Let’s take this as an example. If your business uses 1,000 kWh per month mostly duing the daytime, and is based in the South of England, let’s take a look at the size of solar system you’ll need using a commercial solar PV calculator:
If your goal is to be carbon neutral, then about 11kWp of installed solar panels would on average generate just over 1,000kWh per month.
If your goal is always be using solar energy, then you’ll need a bigger system which would generate at least 1,000kWh every month, even in winter. To still be producing at least 1,000kWh in December and January, your solar PV system would need to be 28kWp. In the summer months it would then over produce, but this can often be sold back to the grid.
For most businesses where cost savings and carbon offsetting are the goal, then it makes sense to have a smaller system that on average offsets your usage, but still relies on the grid during winter.
How much power can a 100kW system produce?
A 100kWp commercial solar PV system can produce over 113MWh (Megawatt Hours), or 113,000kWh per year in the South of England. That’s an average of just under 9,500kWh per month. It’s output would range from around 3,900kW in Janurary to over 14,500kWh in August.
If the same 100kWp PV system was installed in Edinburgh, it would produce 23% less electricity at 87.7MWh per year.
How many solar panels do I need calculator
To calculate how many solar panels you need to offset your energy usage, you need to know your energy usage over a year. Then we can work out, based on your location what the total kWp of solar panels needed is.
Because solar panels typically range from 300-500Wp of output (0.3-0.5kWp), then you’ll need around 2-4 solar panels per kWp of output required. To follow on from the previous example where the business needed 1,000kWh of energy per month on average, and we calculated they need 11kWp worth of solar panels, then they would need around 22 solar panels if they were able to buy the most efficient ones.
How much sunlight do you recieve?
The amount of sunlight you receive varies depending on a few factors:
- Where in the UK your commercial solar install is going to be based (see the map below)
- The direction your roof faces – south is best, although if you have a flat roof this doesn’t matter so much as the panels can be orientated in any direction
- Shading – are there taller buildings which cast a shadow at certain times of the day
- The weather changes from day to day, although it does tend to average out
What to look for in a installer
What should you be looking for in an installer?
Well, firstly, going solar is a fairly decent sized investment, so before you buy, you want to have the chance to have a in depth consultation with the installation company.
They should be knowledgable and able to answer your questions, help you build the business case, and also not just be trying to sell you a system as quickly as possible.
Also, you should look for an installer that is MCS accredited, and has good roofing experience, rather than just an electrician. Your roof is an important asset, so you need your installers to understand that.