Warehouse power

or hire-purchasing the equipment, which can be structured so the payments are covered by the savings on electricity; or signing up to a power purchase agreement (PPA).

Under PPA, an investor pays for the system and the landlord or tenant agrees to buy the power generated by the solar system for a given period – typically over 10 to 15 years.

Cathie Eberlin, founder of net zero consultancy Leading Energy, says there has never been a better time to invest in solar panels, whichever funding route companies choose. “You’ll save so much on your electricity, and remember that by doing nothing you will be haemorrhaging money, spending 45p/kWh before the discounts,” she says.

“I’ve just worked with some commercial customers who, if they carry on doing nothing, will see their electricity bills double – they can’t create four times their turnover to cover that. So you’re kind of forced to make an investment anyway, really. For me, it’s a no-brainer. Everybody needs to do it now.”

Economic considerations

Nor should the lack of government subsidies be a disincentive, says Cook, dismissing fears that the closure of the feed-in tariff (FIT) scheme in April 2019, which paid a guaranteed amount for every unit generated, has made installing solar panels less economically attractive.

Cook says: “FIT gets brought up quite a lot by companies concerned they’ve missed the boat. It was designed while prices were very high, to help the transition to renewables. However, the price of panels has reduced and their performance has improved dramatically over

Case

Kent-based logistics firm The Salvatori Group has invested £600,000 in solar photovoltaics (PV) systems at its Sittingbourne and Aylesham sites.

The two systems are predicted to generate a combined 295.8MWh of electricity annually, the equivalent to a saving of 65.21 tonnes of CO2 a year.

The project was funded through Percy Finance and installed by Dover-based Energy Saving Specialist (ESS).

ESS technical director Nick Arnold, who led the project, recalls the difficulties of getting a grid connection. “Permission took a long time to come back, mostly due to the huge volume of new connections the distribution network operator (DNO) is currently receiving, but also because there were constraints at the Aylesham site due to the ageing local network infrastructure,” he says. “We the past 10 years, so they still offer a good ROI without any government subsidy.”

Renishaw’s Goodare can attest to this. The company fitted its first rooftop solar panels 10 years ago and has recently built car ports on its sites, equipped with chargers and fitted with solar PV.

He says: “We were astonished to find that, despite the cost of all the civils work and all the steel that goes into these carports, the ROI was better than our original solar installation – which receives the FIT.”  reduced the export of the system to comply with the DNO requirements in the end. This limits the exported power so the site itself can still benefit from the full solar output.”

Savings kicked in immediately, says David Tobin, Salvatori Logistics MD: “Power from the panels is used before power from the local grid, so every kWh of solar used saves a kWh of imported power.

“Exported power can be sold via a PPA once the export metering is in place. This additional income can vary from year to year, so isn’t generally relied upon when assessing the viability of the project, but is a bonus income stream once set up.

“Our predictions show that 22% of the sites’ annual power can be supplied by solar PV and the estimated cost of this over 25 years is 6.5p/kWh. This doesn’t rise with inflation, so provides some cost certainty for us. Once the capital cost of the project is recouped, the site effectively receives 22% of its power for free, minus any ongoing cleaning or maintenance costs required.”

As more electric vehicles, forklifts and other plant comes online, Salvatori’s ability to use the currently exported power increases, which improves the ROI and investment case for these projects.

Salvatori would like to see more government support for solar installations. Tobin says: “Grants are a very important consideration for businesses undertaking sustainability projects. Salvatori was awarded a grant of £10,000 for this project. However, HMRC imposed a 25% tax rate on this, meaning we were effectively awarded only £7,500.

“We would urge government to consider revisiting the taxation applied to these grants, to maximise the investment and improve future returns in renewable energy for business across the UK.”