Is your electricity provider offering you a 15 per cent ROI? Ben Harrison of Mypower Ltd
What do you get in return from your electricity supplier? Probably just electricity, perhaps gas?
With solar PV you get more than just electricity.
It often comes as a surprise to many business owners the savings they can make by installing solar panels on their empty rooftop, and how quickly they see a return on their investment. A commercial solar PV installation offers clean renewable electricity with a return on investment in excess of 15 per cent. Businesses are able to take control of their own electricity supply which provides electricity at the equivalent price of around 4-5p per unit as opposed to around 15p from the grid.
Achieving a 15 per cent ROI
Commercial solar PV installations provide a solid return on the investment.
A typical commercial size of 100kW of solar PV equates to a roof size around 540 sqm. (e.g. 36m x 15m) and produces approximately 91,500 units of electricity per annum. With as low as 60 per cent of the solar generation consumed on site and 40 per cent exported to the grid, our customers are typically seeing an ROI in excess of 15 per cent. Higher energy users, consuming even more of the solar electricity, are seeing even greater returns from their commercial solar.
Matching the daytime generation from the panels to the electricity demand within the building is the most efficient way to use solar energy, as it means that the business needs to import less energy from the grid which costs up to three times more than solar electricity.
Savings from year 1
Year 1 savings vary depending on system size and on-site consumption but most businesses see savings from the first year even after paying interest payments.
Payback periods are typically five to seven years, and that's before any potential benefit using available Annual Investment Allowance tax benefits. In effect your business could be generating totally 'free' and fully paid off electricity in as little as five years. With a long-term life span (panels guaranteed for at least 25 years) and very little management required, that is an excellent payback.
Financing Solar PV
Access to cheap finance for solar PV was readily available before the coronavirus crisis but even more so now.
We've seen a number of businesses using the Government's Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS) for solar PV. Both aim to help businesses affected by Coronavirus offering loans which are interest free for a year and very low interest rates thereafter. Investing in a solar PV system will help reduce running costs immediately, stabilise costs for the future and provide an excellent ROI.
Grant funding for renewables in Gloucestershire
A Gloucestershire grant specific to commercial renewable energy solutions is available for many companies and offers 30 per cent free funding towards the cost of purchase and installation of carbon reducing initiatives, with solar PV being one of them. The grant is not linked to Coronavirus funding but is available to eligible Gloucestershire SME businesses on a first come first served basis. The limited pot of money is purely to help businesses reduce energy consumption for a more sustainable future.
Recent solar PV customers of ours, Quickgrind, based in Tewkesbury and Far Peak based in Northleach, have both used the grant and are seeing ROIs of 28.2 per sent and 22.8 per cent respectively.
Sustainability both financially and environmentally
Solar PV is not just about financial gains but the environmental gains are something extraordinary too. Harnessing the suns free energy source through solar PV on your roof and providing your business with clean renewable electricity is a very satisfying feeling! Our commercial customers on average avoid 50-100 tonnes of CO2 every year reducing their carbon footprint and impact on the climate crisis. So yes, solar generated electricity does give you a lot more than grid provided electricity.
Over the last 10 years we have seen ROI on commercial Solar PV increase and now in 2020 it is better then ever. Our commercial customers are seeing the results to prove it. With the rising costs of grid supplied electricity, solar PV offers electricity at an equivalent fixed cost of 4-5p/unit, which is likely to be at least 65 per cent cheaper than your current supply.
The benefits of solar PV are clear and robust, and importantly have been proven reliable over many years.
We don't promise the earth, but we are helping to save it.
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