The business world has an outsized role to play in helping the UK reach net zero by 2050. Nearly a third of the UK's largest companies, with a combined market capitalization of £650 billion, have already made a public commitment to this cause by signing up to the United Nations' Race to Zero campaign.
The UK government is encouraging this momentum by incentivising businesses to adopt renewable energy technologies on their properties, most notably solar panels. Solar energy is not only a vital component of our low carbon energy mix, but solar PVs have increasingly become an affordable option for businesses who want to create new revenue streams and shield themselves from the fluctuating energy market.
To find out more about how solar panels work and the benefits they can bring to your business, read on.
Understanding Solar Panels for Business vs Commercial Solar Panels
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Firstly, let’s distinguish between ‘commercial solar’ and ‘solar panels for business’:
Commercial Solar
The term 'commercial solar' often refers to sizable solar setups found on larger facilities such as agricultural buildings, industrial sites, factories, schools, hospitals, and manufacturing units.
Solar Panels for Business
This term typically relates to installations for small and medium-sized enterprises (SMEs) housed within office buildings. These businesses generally need solar systems that are comparable in scale and potential financial return to those used in residential settings.
Understanding Solar PV Panels vs Photovoltaic (PV) Panels
Whether you’re looking for commercial solar or solar panels for business, the general term ‘solar PV panels’ encompasses two types of technology: solar PV and thermal panels. Each serves a distinct purpose, and both have their unique advantages and challenges. Your choice between the two will depend on your specific needs, such as the amount of available space, your budget, and whether you're looking to generate electricity, heat water, or both.
Types of Solar Panels
Photovoltaic (PV) Panels
Convert sunlight directly into electricity using semiconducting materials.
They're versatile, with a lifespan of up to 50 years, and can significantly reduce electricity bills. However, they require a substantial initial investment and space due to lower efficiency (15-20%).
Solar Thermal Panels
These panels convert sunlight into heat, which is then used to warm up water in a hot water tank. They're highly efficient (70% efficiency), cost-effective, and space-efficient. Their main limitations are their single-purpose use (only for heating water) and a shorter lifespan of about 20 years.
Why choose Solar PV Panels for Businesses?
With 39% of global CO2e emissions being generated by the real estate sector, commercial buildings must play a crucial role in our pathway to net zero. By implementing energy-saving strategies and decarbonisation technologies such as solar panels, businesses can both tackle climate change as well as reap significant financial benefits. This combination of environmental and economic advantages highlights the importance of solar power in promoting sustainable business practices.
Financial Benefits of Solar Power for Business
On average, it costs about 5p per kilowatt-hour (kWh) to generate electricity using commercial solar photovoltaic (PV) technology. In contrast, businesses currently pay their energy providers between 11p and 15p per kWh for electricity. This means investing in commercial solar panels makes financial sense, even at present rates. Considering that business spend on energy is expected to increase in the coming months, solar panels offer significant protection against rising energy costs.
Environmental Benefits of Solar Power for Business
For businesses looking to reduce the environmental impact of their operations, adopting solar panels can help to significantly lower their carbon footprint. For instance, a solar PV system with a capacity of 250kWp can prevent around 64 tonnes of CO2 emissions. This amount of CO2 saving is comparable to not driving a petrol car for 155,000 miles!
Energy Storage Systems for Business
Battery storage systems enable businesses to store electricity on-site for later use. This technology helps decrease dependency on the electricity grid and provides a backup power solution.
Integration with Solar Panels
Battery storage is commonly combined with solar panels to enhance the utility of generated solar power, offering savings and additional benefits.
Benefits of energy storage for business
- Unused energy generated by the system during daylight hours is stored within the battery and reserved for later use.
- By thus enhancing the use of solar energy, battery storage decreases the need for non-renewable power from the grid.
- Offers a reliable emergency power source to maintain operations during power interruptions.
- Enables peak shaving, which is the use of stored solar power during high-demand periods to avoid higher energy costs.
- Facilitates load shifting, which is the movement of energy usage to more cost-effective times.
How can CQuel find and secure green energy funding for your business?
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Even with the FIT scheme's closure, various funding options remain for businesses looking to invest in solar PV systems.
- Feed-in Tariff Update: Despite its closure in 2019, the cost of solar panels has significantly decreased due to the FIT scheme. The investment on solar PVs can pay off within 6-7 years, depending on the project details.
- Power Purchase Agreements (PPAs): PPAs let businesses install solar panels with no upfront cost. The business then buys the electricity produced at a lower rate compared to the national grid, leading to significant savings.
- Leasing Solutions: Businesses can lease solar panels with help from financing companies. Often, the savings on their energy bills from the solar panels can be greater than the lease payments, making it financially beneficial right away.
- Solar Panel Leasing: This type of lease agreement allows businesses to use solar energy without buying panels upfront. Lease payments are typically lower than regular electricity costs, leading to savings. Options to purchase the panels at the end of the lease can extend these benefits.
- Direct Investment: Best for long-term savings, this option allows businesses to buy solar panels directly, offering great financial returns and quick payback. Tax deductions can also lower initial costs, making it an appealing choice.
