Commercial solar panels

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Commercial and business solar panels are suitable for any industry where there is a dependency on the grid for electricity.

Solar panels produce 100% green electricity which can be put to use immediately by a business to provide power to its operation. To ensure nothing is wasted, excess electricity can also be stored in large batteries for reuse.

The result of solar panel installation varies by industry. There are two terms used in the industry to describe the size of the installation: commercial solar panels, and business solar panels. Commercial solar panel installations are the huge fields you see powering agriculture and manufacturing; business solar panel installations are those you see on top of buildings like office blocks and shops.

In addition to producing clean energy you can use and store, solar panels also have the potential to earn a business revenue. This is achieved by selling units of electricity back to the grid through an electricity supplier.

Commercial solar panel installations are by far and away the most productive type of installation with regards to this. Whereas business solar panels are confined to one or two buildings, commercial setups can encompass an acre of land or more. This gives those who own land a big opportunity to produce a lot of electricity.

There’s also the possibility of reducing your electricity bills, which is nailed on if you grow your solar production with your energy output.

So, there are two factors at play with commercial and business solar panels:

  1. A financial factor which incentivises the uptake of solar panels in three ways:
    • Through reduced energy bills,
    • By selling back to the grid,
    • By protecting against changing utility rates (you can offset these against your savings).
  2. An environmental factor which can help businesses reduce their carbon footprint by becoming less dependent on fossil fuels.

The financial factor (Smart Export Guarantee)

In April 2010, the Government introduced the Feed-in Tariffs (FIT) scheme to promote the uptake of solar panels. The scheme promised to pay generators (those with solar installations) money for the excess electricity they put back into the grid.

Unfortunately, the Feed-in-Tariff scheme closed to new applicants on 31 March 2019, meaning those installing solar panels after this date could be exporting excess electricity to the grid for free, without any payment whatsoever.

This kicked up an unholy storm with businesses and consumers who needed the scheme to make solar panel installation financially worthwhile.

Thankfully, pressure on the Government paid off and there is now a replacement scheme called the Smart Export Guarantee (SEG) coming into force on 1 January 2020. To learn more about the Smart Export Guarantee, read our guide here.

The SEG places an obligation on all electricity suppliers to offer a tariff that makes payments for excess renewable electricity exported to the national grid. Under the scheme, businesses small and large are guaranteed payment for their energy.

The amount you could earn for your electricity depends on:

  1. How much electricity you export to the grid
  2. Your tariff rates (these can be variable, or fixed)

Unlike the defunct Feed-in-Tariff, under the SEG Suppliers set their own tariff prices so you’ll want to shop around for the best prices.

The Energy Saving Trust conducted research into the SEG and its financial viability using Octopus Energy as its benchmark. Their research concludes, “Our calculations show that for some people, the Smart Export Guarantee (SEG) will make installing solar power an acceptable investment. However, for most, installations will remain an environmental rather than a financial decision.”

The environmental factor

As solar panels have become more efficient, they have become a genuinely viable and productive means of producing electricity.

The best solar panels convert around 23% of the sun’s energy into electricity, while the least efficient still manage a commendable 15 to 18%.

At the former rate, it only takes around 6 months for a solar panel to clear the carbon dioxide emitted to make it. In other words, most installations become carbon neutral within 6 months and net producers of energy after this (although, this really depends on what type of energy was used to produce the solar panel).

Solar panels are designed to last for several decades and because they have no moving parts, they are not prone to experiencing great efficiency losses over time. This fact makes solar panels a fantastic long-term renewable energy source.

When you read between the lines, solar panels are also a brilliant way to reduce dependency on fossil fuels. While energy suppliers are becoming greener, many still rely on fossil fuels for the bulk of their supply. If you can’t get a good rate from a 100% green supplier, and you’re forced to choose one who depends on fossil fuels, generating electricity yourself will help offset your carbon output.

Choosing the best solar panels for your business

You will always pay more for solar panels that are higher in efficiency, but there’s the upshot of generating more electricity which you can sell back to the grid if you sign up to a tariff on the Smart Export Guarantee.

Popular brands of solar panels include:

  • LG
  • Panasonic
  • REC Group
  • Silfab
  • Solaria
  • SunPower

Out of all these, SunPower are extremely well renowned because their solar panels get closest to a module efficiency of 23%. LG, REC Group and Panasonic also manufacture solar panels with an efficiency greater than 20%.

Something to beware of is there are often big differences between commercial solar panels and the domestic type. Domestic solar panels tend to run at a module efficiency of 10 to 18% whereas commercial panels usually run at 20% and up. This is why domestic panels are so much cheaper, often undercutting the commercial type by 30%.

The aim with a commercial solar panel setup whether it’s for an SME or power-hungry operation is to maximise energy production, so choosing a purpose-made product is important. But it’s also important to weigh up your needs. The reality is that for a small business or office, an efficiency of 15% will be absolutely fine. If, however, you are looking to power a heavy workshop or industrial operation, you will need higher efficiency.

Solar panel costs

The individual costs for solar panels vary greatly. A single solar panel can cost anywhere from £750 to £2,000 depending on its efficiency.

To get a complete installation price, you would multiply the cost of a solar panel by the amount needed and add 10% for installation. You can expect to pay £5,000 to £6,000 for a modest 4kW setup on a house-sized business or office complex (the roof space needed for a setup like this is around 25 square metres).

A 30kW solar system will cost around £30,000. This setup could realistically meet half a medium-sized business’s energy needs in a day (*110 to 180 units), saving them thousands of pounds a year on their electricity bill. Of course, there’s also the opportunity to sell excess electricity back to the grid with the Smart Export Guarantee, making a solar system of this size a potentially worthwhile financial endeavour.

Other renewable energy sources

The five major renewable energy resources are solar, wind, water (hydro), biomass, and geothermal. To learn more about renewables for business, click here.

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