Solar panels for business

Business solar panels have tangible benefits to offer UK companies, from energy efficiency and cost savings to enhanced sustainability. However, before adopting solar power, it's crucial to determine if it aligns with your long-term business goals and objectives.

This guide provides valuable insights to help you make an informed decision about the suitability of solar panels for business needs.

What is a commercial solar panel?

Commercial solar panels, often referred to as photovoltaic (PV) panels, are a sustainable and cost-effective solution for powering businesses. These panels consist of multiple solar cells made from semiconducting materials, primarily silicon. When exposed to sunlight, these cells generate electricity, which can be harnessed to power various aspects of your business operations.

Commercial solar panels are tailored for businesses and typically involve larger-scale installations to meet higher energy demands. Depending on the size of the business, they may invest in larger and more advanced panels with higher capacities than your typical residential setup.

Why should youyou should use solar panels for your business?

There are many reasons why solar energy might be the optimal solution for your business. Many benefits are not just altruistic in nature but can lead to real improvements in your business and bottom line:

• Cost Efficiency: Solar panels reduce your business's electricity bills and last up to 25 years, providing long-term cost savings.
  
  
• Sustainability: Embrace clean energy and reduce your carbon footprint, demonstrating environmental responsibility.
  
  
• Energy Independence: Solar reduces your reliance on external energy sources and protects against power shortages.
  
  
• Positive Image: Showcase your commitment to sustainability, enhancing your brand's reputation.
  
  
• Financial Incentives: UK businesses can reap rewards for investing in solar through various schemes and incentives

We’ll explore many of these considerations and benefits in more detail below.

The advantages of solar power for business

Harnessing solar power for your business in the UK offers many benefits. From cost savings to reducing carbon emissions, adopting solar energy is not only environmentally responsible but also financially advantageous.

Efficient energy production

Despite the UK’s penchant for cloudy skies, solar panels are still an efficient energy source that generates electricity year-round and in most weather conditions. To get the most out of your solar installation, you need to plan for variances due to the seasons and weather conditions and the tilt of the UK’s latitude relative to the sun. However, solar energy is feasible in most areas of the country.

Cost savings

On average, businesses in the UK can save between £500 to £2,500 per year on electricity costs for every 1 kWp (kilowatt peak) of solar panel capacity installed. A typical commercial solar panel system ranges from 10 kWp to 100 kWp, resulting in potential annual savings of £5,000 to £250,000.

Also, the typical payback period for a commercial solar panel system in the UK is typically between 5 to 8 years. This means the initial investment is recouped through electricity savings within this timeframe.

Reduce dependence

With Brexit, COVID, and then the war in Ukraine, individuals and businesses alike have felt the financial squeeze of being totally dependent on the national grid. There’s no telling when similar cost spikes will come in the future, how severe they will be, or how long they will last.

Investing in your own energy-generating capacity provides you with some way to manage this risk. Not only in terms of financial stability and cash flow but also in making sure you have electricity no matter what.

Lower carbon footprint

By reducing reliance on fossil fuels, you actively contribute to the UK's efforts to combat climate change and meet sustainability targets. Businesses that invest in renewables may benefit from various incentives and schemes.

For example, by reducing their carbon emissions, businesses can lower their CRC (Carbon Reduction Commitment Energy Efficiency Scheme) liabilities and associated costs.

Positive PR opportunities

Reducing your business's carbon footprint through solar power can be a powerful PR tool in the UK. Achieving certifications such as the Carbon Trust Standard and other sustainability awards showcases your commitment to environmental responsibility. This not only enhances your reputation but also attracts eco-conscious customers and clients.

Positive PR opportunities arise as you communicate your green initiatives to a wider audience. Highlighting your use of solar energy and reduced carbon emissions demonstrates your dedication to a sustainable future.

The disadvantages of solar power for business

While solar power offers numerous advantages, it's essential to consider the potential drawbacks for businesses in the UK. Not being aware of potential challenges and creating contingencies will not only minimize the positive impact of your solar system but may also result in it being a burden on your business.

High initial cost

One significant drawback is the high initial cost of installing a solar panel system. For commercial installations, expenses can range from £5,000 to £8,000 per installed kilowatt-peak (kWp). That translates to anywhere between £50,000 to £800,000 in total. However, it's important to note that this investment pays off through energy savings and potential income over time.

Use a lot of space

Solar panels require ample space for installation, which can be a limitation for businesses with limited rooftop or ground space. A 10 kWp system typically covers about 560 square meters of roof space, so available space must be carefully considered. 

Weather dependency

Solar panels' energy production is weather-dependent, making them less efficient on cloudy or rainy days. This variability makes impossible for rcan impact a business's ability to rely entirely on solar energy, necessitating alternativebackup power sources or energy storage solutions.

These disadvantages are important considerations for businesses evaluating the adoption of solar power in the UK, but they can be mitigated through careful planning and financial analysis.

Permission and planning

For most commercial solar panel installations, you’ll need to obtain planning permission from the local planning authority. This involves submitting an application detailing the project's scope, location, and environmental impact. The planning authority will assess the proposal's impact on the local area and any potential concerns. Not to mention permission from the property owner (if not yourself), the Distribution Network Operator (DNO), etc.

Where can commercial solar panels be installed?

Commercial solar panels can be installed in a variety of ways, each with its own advantages and considerations. The choice of installation site depends on factors like available space, energy needs, and budget. 

Here are two common options:

Roof-mounted solar panels for businesses

Roof-mounted solar panels are a popular choice for businesses, especially those with limited ground space. They can be installed on flat or sloped roofs, utilizing otherwise unused space. Benefits include:

• Space Efficiency: Roof installations maximize space utilization without compromising existing land use.
  
  
• Aesthetics: They are less visible from ground level, preserving the building's appearance.
  
  
• Quick Installation: Roof installations are often quicker to implement than ground-mounted systems.

However, potential challenges include the need for a structurally sound roof, shading issues, and limited tilting options that may affect energy production. Typically, roof-mounted panels can not reachexceed the highest point of the roof by a certain length, and they should be installed in a way that minimises the impact on the external appearance.

Ground-mounted solar panels for businesses

Ground-mounted solar panels are suitable for businesses with available land or larger energy requirements. Key advantages include:

• Optimal Orientation: Ground installations allow for flexible panel orientation and tracking systems to maximize energy capture.
  
  
• Ease of Maintenance: They are typically easier to access for cleaning and maintenance.
  
  
• No Roof Constraints: Ground installations are not limited by roof size, shape, or condition.

Challenges include land availability, potential land use conflicts, and the visual impact on the property. There are also regulations that stipulate the maximum height of the installation as well as the distance it should be from the property perimeter.

How much do commercial solar panels cost?

         The cost of commercial solar panels in the UK can vary significantly based on several factors. Here are some projections based on different business sizes:

     Small to Medium-sized Businesses (10-50 kW): For smaller installations, the initial cost can range from approximately £9,500 to £51,000, depending on  the system size and other factors.

    Large Businesses (50 kW and above): Larger installations for industrial or large commercial enterprises with industrial solar panels may cost anywhere from £51,000 to exceeding £250,000.

However, some considerations factor into the total cost, such as:

1. System Size (based on energy needs, available space, etc.)
   
   
2. Type of Solar Panels (monocrystalline, polycrystalline, thin film, make, model)
   
   
3. Additional Equipment (inverters, mounting systems, wiring, and any required battery storage solutions)
   
   
4. Installation and Labor Costs
   
   
5. Ongoing Maintenance
   
   
6. Government Incentives/tax breaks (solar equipment is currently exempt from VAT in the UK)
   
   
7. Financing Options (loans, lease-purchase agreements, or power purchase agreements (PPAs), etc.)
   
   
   

Integration of business solar panels with battery storage systems

       In the UK specifically, integrating business solar panels with battery storage systems has a range of important benefits:

1. Energy Reliability: Battery storage ensures businesses have a consistent power supply, particularly during overcast days or long winter nights.
   
   
2. Grid Savings: The UK's time-of-use energy pricing means batteries can store excess solar energy when cheap and discharge it during peak hours.
   
   
3. Grid Support: Batteries can provide grid support by participating in demand response programs, potentially earning additional income.
   
   
4. Cost Efficiency: While there is an additional upfront cost, it will contribute to the long-term savings of the system if used intelligently.
   
   
5. Energy Security: A battery will offer additional security against disruptions in the context of the UK's vulnerability to energy supply disruptions.
   
   
6. Remote Locations: Battery storage can be essential for company solar panel installations in remote locations, offering a reliable energy source without requiring extensive grid connections.

However, for businesses with consistent access to the grid and lower energy demand during the day, the need for battery storage may be less pressing. Assessing energy usage patterns, the capacity of your business solar panels, and evaluating the cost-benefit ratio is key to determining the necessity of a battery system.

Maintenance of business solar panels

Yes, you will incur extra maintenance needs and costs by installing a solar system. However, many aren’t aware of how small the maintenance requirements of a solar installation are.

A rough estimation is that it will only cost you 1-2% of the total installation cost per year in maintenance. Most of this will be for routine cleaning of the panels. Expensive replacements, like panels, inverters, or batteries, are rare as these components are typically very reliable, with lifespans of 25 years or more.

Grants for commercial solar panels

Businesses in the UK have access to various grants and incentives to support their adoption of commercial solar panels:

1. Feed-in Tariff (FiT): Despite closing to new applicants in 2019, existing FiT contracts continue to provide income for 20 years.
   
   
2. Smart Export Guarantee (SEG): Businesses can earn by selling surplus energy.
   
   
3. Enhanced Capital Allowances (ECA): Offers tax relief for solar installations, deducting costs from taxable profits.
   
   
4. Renewable Heat Incentive (RHI): Provides quarterly payments over seven years, including solar thermal systems for water heating.
   
   
5. Local Authority Grants: Some councils offer regional incentives for adopting renewable energy solutions.
   
   
6. Energy Efficiency Grants: Various grants support broader energy-saving initiatives, including solar installations.
   
   
7. Carbon Trust Green Business Fund: Aids small and medium-sized businesses in energy efficiency and renewables.
   
   
8. Innovate UK Grants: Supports innovative projects, including solar-related research and development.
   
   
   
   

Summary

Business solar panels represent cost-effective, environmentally friendly energy solutions for UK businesses. While they require initial investments, the long-term benefits outweigh the costs, including potential financial incentives and improved public image. 

Exploring available grants can further support solar adoption and lubricate the gears of progress. As businesses shift toward clean energy solutions, solar power emerges as a compelling choice for financial and environmental advantages.