20 July 2023
We shed light on the hottest questions around solar installation coming from our conversations with tenants
In our conversations with businesses, we have found that one of the key barriers to the proliferation of solar is a lack of knowledge about its costs, benefits and the process of installation. With this in mind, we’ve answered some of the most common questions that arise when businesses are first considering solar installation for their site.
1. How much will it cost me and how long is the payback period? 💷
Whilst the initial upfront investment for solar can be substantial, so too can the benefits. An average sized roof of 40,000 sqft (c. 3,700 sqm) can generate a solar system which delivers c. 400,000kwh of energy and will cost c. £365,000.
The payback period on your upfront expenditure is likely to be in the range of 5-8 years.
However, if you’ve got other priorities for your capital, Two Blues Solar offers a means of accessing solar without any capital expenditure. We manage and fund the full installation and ongoing maintenance. We then enter into a power purchase agreement” (“PPA”) with you to sell you the solar energy you consume at lower than market rates. You can read more about the PPA model here.
Our flexible model works with both owner-occupied and leased buildings. So even if your lease is reasonably short and it doesn’t make sense to invest in solar yourself, we can still help you access the associated benefits.
2. What are the main benefits? ✅
Installing solar has two main benefits:
Energy costs:
It allows you to access cheaper, secure energy. If higher energy prices and energy security are of concern to your business, the installation of solar will likely reduce your reliance on the grid by c. 20-40%.
Sustainability:
It supports your sustainability initiatives by reducing greenhouse gas emissions. Even if you’re already purchasing 100% of your energy from renewable sources, the next step in a business’ sustainability journey is to create “additionality” by generating its own renewable energy.
3. What are the main risks / considerations? ⚠️
When deciding to proceed with solar, there are various considerations to be aware of before the process begins:
The structure and condition of your roof:
Some roofs may require maintenance or upgrade before installing solar and it’s important to get a structural and condition survey. Roofs containing asbestos can also be problematic and may need to be replaced or overclad if you wish to install solar.
If you do need to repair your roof, there are PPA providers such as Two Blues Solar who will incorporate the capital costs into the PPA so you don’t have to incur these upfront costs either.
Selecting a solar installer:
There are a very large number of commercial solar installers in the UK. It may be helpful to get external expertise when selecting an installer as it’s important to put in place the right controls regarding the installation quality.
The permissions process:
Before you can install solar, you need to seek permission from your local distribution network operator (DNO). This process typically takes about 3 months. If your proposed system is larger than 1 MWp, you will also need planning permission which will take longer. Your solar installer or PPA provider can support you with this process.
Liaising with your landlord:
If you don’t own the building yourself, the nature of your lease will determine any legal agreements you need to put in place with your landlord regarding the installation of solar. It’s important that these agreements manage landlord and occupier liability regarding future roof repairs.
Two Blues Solar can act as an intermediary between you and the landlord; we have developed strong legal documentation to mitigate the risk of any disputes that might otherwise occur regarding repair liability.
Maintaining the panels:
Most solar panels come with a 25-year warranty. However, it’s important that you monitor their performance to ensure you’re getting maximum benefit throughout their lifetime. Both reactive and preventative maintenance are therefore essential and you should budget c.10K per year for these costs, depending on system size.
If you choose to install solar through a power purchase agreement, the PPA provider will typically be responsible for the long-term maintenance; in these cases, the PPA provider’s interests are completely aligned with those of the client as both parties benefit if the system is functioning at optimal capacity.
4. How long does the process take? ⏲️
A typical commercial rooftop solar project will take c. 6 months to complete from the point at which permissions are requested from the distribution network operator to getting panels on the roof.
It’s important to select an experienced solar installer and manage this process effectively. As part of Two Blues Solar’s fully-funded and managed solution, we will coordinate this full process on your behalf.
The actual installation only takes c. 2 weeks and any operational downtime is likely to be limited to half a day which can often be arranged for weekends and/or evenings if needed.
In comparison to many other renewable solutions, rooftop solar therefore offers a really quick and visible sustainability win.
5. How long does solar last and is there a risk of obsolescence? 🔬
When it comes to potential obsolescence, one of the advantages of solar is that it is already at a relatively cost efficient and sophisticated stage in comparison with many other renewable technologies. Future progress is therefore likely to be incremental.
At Two Blues Solar, our interests are aligned with our clients in ensuring their solar is as efficient and productive as possible. That’s why we seek out innovative solutions for our clients and will always look into upgrading panels if superior technology enters the market that would deliver a significant benefit uplift.
Any further questions? Feel free to drop us a line at info@twobluessolar.com!