Is solar right for you?

AS LITTLE as 5% of Britain’s warehouses currently feature solar panels on their roofs, despite collectively offering the capacity for more than 15GW of distributed generation. While projections vary, the average warehouse can expect to save more than 50% on its energy bills by switching from mains supply to onsite solar. 

Why are warehouses treading gingerly around the decision to invest in renewables? Well, analysis suggests that the high perceived cost of onsite renewables remains a major barrier to many – especially given the countless financial pressures experienced over the past few years. For some, keeping the lights on is pressure enough, with investment in decarbonisation having to take a temporary backseat.

It’s also important to consider the complex ownership model of most UK warehouses. With most sites either fully leased or leasehold, investing already limited flexible capital in fixed assets is arguably a difficult sell.

But does onsite renewable generation really have to cost the earth? What’s more, is it only suitable for freehold sites, or can suppliers work around the complexities of the sector?

Power Purchase Agreements (PPAs) is a model that sees the provider take on the initial investment cost, with resulting energy generated by the asset sold to the customer at a cost-effective fixed price, there are no upfront costs or ongoing maintenance charges to pay, making the adoption of renewable energy technologies both affordable and accessible.

Our PPAs cover the installation of battery storage solutions, enabling warehouses to over-specify the size of their solar array against typical energy demand, with the surplus power stored for use overnight. By doing so, it’s possible to tackle inconsistent generation.

Ownership

With warehouses rarely owned outright by their occupants, we’re regularly asked whether tenants can install solar panels on leasehold facilities. While requiring explicit permission from the building owner, the simple answer is yes. What’s more, landlords are usually open to the idea as solar enhances the value of a property and boosts its environmental credentials. There are even solutions for shorter leases.

Even so, consent must be sought with two documents essential to progress a successful installation – Licence to Alter (granting permission to make modifications to the property) and Licence to Underlet (enabling access to the solar installation for maintenance purposes). From ownership and insurance, to liability, removal, ownership and maintenance, the licences will clearly define the responsibilities of the tenant and the landlord.

A lease agreement will need to be structured to address long-term property-specific factors including lease renewals, sales and occupational pressures. While this may seem complicated, it’s a common route for experienced developers, but may not suit all scenarios.

While many businesses may think that exploring the advantages of onsite generation is too daunting, especially with challenges and barriers surrounding grid connections, capacity, returns, pricing and liabilities, misconceptions are seemingly holding back industry progress.

When it comes to distributed energy, the models for deployment have been tried and tested worldwide. At ADE, we plan to deploy more than £300m capital (including debt) on projects across the UK and Europe. Central to our ethos is to make it simple for organisations to realise the full potential of onsite renewables. Businesses can access both the expertise, and the funding required to secure a system that is right for them, with no upfront costs.

Miles Thomas, chief commercial officer, AMPYR Distributed Energy (ADE)

For more information, visit www.ampyrde.com