October 14, 2024 Solar Power
The 5 things businesses need to know to make the most of a commercial solar power system
As a business owner, your smartest investment could be in the source of energy you choose.
After all, the first requirement for your business is to simply have the energy you need to operate. The more you can keep the cost of electricity down, the less constrained you will be when making financial decisions that support your growth and competitiveness.
It’s no secret that many businesses, large and small, are struggling with the cost of energy, which is why they need alternatives.
Commercial solar power can provide your business with a predictable, reliable and zero-carbon source of electricity that can significantly decrease your operating costs – and free you from the volatility of the grid.
However, it’s not just cost-savings or sustainability – it’s in the flexibility it allows businesses like yours to use your electricity more smartly.
We will explore just a few of those possibilities that commercial solar power unlocks – as well as quickly explain what will work for some businesses better than others.
1. Battery Storage
As an addition to a standard solar power system, a solar power battery lets you store the electricity you generate to be used at a time that suits you.
As you may already know, a solar power system will use energy directly as it is generated in the daytime.
When a solar power system isn’t generating electricity in the evening, or what small percentage of daytime energy needs it can’t cover is supplemented by grid electricity. However, having a battery can let you use battery-stored electricity in place of grid electricity.
That being said, as beneficial as a battery is to use, it’s also an expensive technology (for the time being).
Solar power batteries add costs up to an extra 50% on a solar power installation – which is why systems need to be designed to make optimal use of a battery to reduce the return on investment time.
In some cases, no battery storage will be right for your business. Commercial solar power systems for energy-intensive industries, such as manufacturing and agriculture, should be designed to immediately use electricity generated by the panels, and send minimal excess electricity back to the grid (more on this later).
However, batteries are the right option for other businesses: especially if yours experiences periods of irregular occupancy (such as weekends and holidays) where the electricity isn’t used immediately and can charge the battery.
That’s why batteries can be very sensible in schools, offices, and even student accommodation, where stored energy can be generated and used at peak hours to avoid incurring peak tariffs associated with grid electricity.
Battery storage also plays heavily into another aspect of flexible solar power system management.
2. Timeshifting
A solar power system should be designed to offer a rapid return on investment, according to your current work and electricity generation patterns.
At Innasol, for example, we take around 17,000 data points on electricity usage over a year to understand your consumption habits and design a system that can generate the maximum possible electricity for the minimum cost for your facility’s needs.
However, you can further maximise your ROI by adapting your work patterns to use solar power smartly – this is known as ‘time-shifting’.
As our Director, Paul Shearin, explains in this Q&A:
“Timeshifting is is when you minimise costs by using free electricity generated by solar during daylight hours (off-peak) to do energy-intensive activities and combine that with battery storage, to run less-intensive operations in the peak hours in the evening – letting you avoid peak-hour rates.
A care home, for example, may shift to do its laundry and dishwashing in the daytime, rather than the evening.”
However, for activities that don’t need a human to oversee them – such as charging appliances – smart devices can be set up to automatically divert power to where it will be used most efficiently.
3. Electric vehicle charge points and carports
Though it may only seem relevant to a few companies at the moment, EV charging is a reality that many businesses will have to adapt to.
After all, we can expect approximately 8-11m EVs on Britain’s roads by 2030, and with a ban on new combustion engine vehicles by 2035, the transition to EVs is imminent.
While the running costs of EVs are cheaper compared to petrol vehicles, those driving EVs or operating EV fleets often still rely on unpredictable, expensive grid electricity to run their vehicles.
Transitioning to solar power unlocks your business’s ability to charge these vehicles for a far more affordable rate – often just pence per kW.
However, when considering a solar power installation to charge EVs, there are a few things for businesses to bear in mind when considering a solar power installation to charge EVs:
- By law, businesses expanding or upgrading their facilities with car parks have to dedicate a portion of their car parking spaces to EV charging – and ‘wire’ additional portions to be ready to install EV chargers – however, generous grants are available.
- While EV vehicle fleets are obvious beneficiaries from the reduced charging costs solar power can provide – employees using EVs can be attracted with the benefit of dedicated EV charging spaces at your workplace – saving them money on home charging at negligible cost to you.
- More ambitious EV ‘carport’ projects can make use of existing large car parks to benefit local drivers. You can charge for these spaces to make unproductive land pay back, but equally, take advantage of community solar grants to provide a service for local people that will encourage footfall.
The EV transition will present a number of challenges for businesses and employees – many of which can be significantly eased by solar power.
4. Energy-intensive activities
The most important aspect of transitioning to commercial solar power is ensuring that it meets your business’ energy needs. In energy-intensive sectors, such as manufacturing or agriculture, solar power can cover those needs– including powering production lines or refrigerating cold storage units, for example.
However, in winter, the energy mix between grid and solar skews heavily towards grid electricity.
Nevertheless, even generating 10% of your energy via solar (with the rest made up by the grid) can result in per-month savings worth thousands of pounds.
What’s more, beyond cost-effectiveness, energy-intensive trades must be aware of increased regulatory pressure to decarbonise. Mechanisms such as the climate change levy and the UK Emissions Trading Scheme, which affect high consumers of energy, penalise those high-consuming users who emit too much CO2. While these currently only affect larger manufacturers and energy providers themselves, as we move closer to 2050, these mechanisms (both incentives and penalties) will likely affect more and more businesses.
As solar power is a zero-carbon energy source, your highest-emitting activities become effectively decarbonised.
5. Understanding ‘excess electricity’
To understand commercial solar power fully, there’s a question we regularly hear that needs to be addressed, and it relates to what you can do with excess electricity:
“Is it not always good to generate excess electricity from solar power?”
If solar power can generate excess electricity that can be stored and reused (or sold back to the grid) instead of high-cost grid electricity, it would be reasonable to assume that a system is better if it generates excess electricity.
However, this takes us back to the economics of battery storage.
If you generate enough excess electricity to store in a battery, it can be economical. Although, remember that a battery can add approximately 50% of costs to a solar power project – so careful consideration is needed to understand if it’s a wise investment.
Fundamentally, you need to generate enough excess electricity to store and redeploy (during peak hours) to make the investment worth it.
However, the last thing you need to know about is the re-sale option – the Smart Export Guarantee.
Is the smart export guarantee worth it?
If you generate more energy than you need, you may know that you can sell it back to ‘the grid’ (your utility company) under a scheme known as the ‘Smart Export Guarantee’.
The SEG is sold as a significant benefit of commercial solar power by utility companies, allowing you to get paid for the excess energy you produce.
In truth, there isn’t a strong policy framework to guarantee that utility companies pay a certain tariff to import energy that you produce – it simply needs to be ‘above zero’.
This means utility companies could pay you as little as 7% of the actual market value of the electricity you generate.
Make no mistake – if your system generates excess electricity, it can help speed up your return on investment by exporting it to the grid: but not significantly so.
What is important to know is that the bigger money saver – and what will impact your return on investment far more over time – is simply designing a system to generate only the electricity you need. If a battery is needed in your system, then it will often be more practical to deploy that stored electricity in some of the smart ways described above.
Key Takeaways:
The most important takeaway from this is that solar power offers flexibility that grid electricity doesn’t, with cost-saving, sustainability and energy security as inherent benefits to businesses.
However, the simple fact remains that for a commercial solar power system to deliver on all of these promises – and the quickest return on investment – it must be designed specifically for the needs of your business.
Every single factor, from your energy usage habits, growth ambitions, and local climate conditions matter when designing a system that delivers the maximum possible benefit for the minimum cost in the shortest time.
Most importantly, we will only advise in favour of a project if it meets these criteria – solar power will not be the optimal choice for every business, but for the many where it is, it offers incredible advantages.
You can learn more about Solar Power for your business, and if you are curious to know what a specific solar power system will look like at your business, all it takes is a free, no-obligation questionnaire for us to design a system sized specifically for your business.
