Creative Finance 5: Join the Solar Power Revolution

“We’ve heard plenty about the environmental benefits of installing solar panels, and, yes, cheaper electricity costs would be lovely, but who can afford solar panels in the current economy? Let’s just wait a few years and see what happens.”

If this sounds anything like your current attitude to solar panels, you need to read on, because you could be denying your business and the planet some big benefits unnecessarily.

For this chapter of our Creative Finance series, we discussed the topic with two of our partners, Centreco UK and EV Future Solutions, to outline why no business should ignore the power of solar panels.

Why Install Solar Panels?

The uptake of commercial solar panels has been increasing steadily in recent years in the UK, and there are plenty of good reasons for that, but first we should address the basics behind the technology.

Commercial solar panels are installed on the roof of a business’ premises where they will exposed to as much sunlight as possible. The cells in the panels capture the sun’s energy which is then converted to usable electricity for the business to use. As most businesses carry out their activities during the day, which is when solar panels will produce the most energy, the resulting electricity savings can be significant.

There are several advantages for businesses when it comes to solar panels, including but not limited to:

  • Considerable electricity cost savings
  • Financial stability and energy security/flexibility
  • A greatly reduced carbon footprint
  • Improved public perception of your business through Corporate Social Responsibility (CSR).

Answering the FAQs with Centreco

One of our partners, Centreco, is a leading installer of solar energy systems for business. A privately owned family business, formed in 2014, they have installed over 100 solar energy systems across the country. We asked Thomas Knox at Centreco for his thoughts on why more UK businesses should be joining the solar revolution.

First things first, why would a business install solar panels?

The main driver behind solar panel installation is to reduce the electricity costs of the company, but while that’s a compelling enough reason on its own, it’s not the only advantage. Businesses are being scrutinised more and more for their impact on the environment – their ‘green credentials’ matter more than ever.

Also, generating free electricity not only reduces electricity costs in the present but will also protect businesses from future rises in energy prices. In the last few months energy prices have risen significantly, and it will not be the last of its kind.

How much do solar panels cost to install?

There’s no simple answer to that as every installation is different, but solar panels are particularly attractive when paid for via a finance arrangement so the business does not part with any capital upfront. The cost of the solar panels is then repaid over 5, 6, or 7 years.

What’s more, many businesses see a very high return on their investment each year, and the savings they make on their reduced electricity costs often more than cover the finance payment, so cashflow remains positive all the way through.

What if the roof is in poor condition?

If the premises are in need of a new roof, the solar installation and roof replacement can be rolled into one project.

How can businesses be sure of potential energy savings projected by the installer?

Your solar panel installation company will carry out a survey on your premises and calculate likely electricity generation. Professional solar panel installations are also accompanied by a 25-year performance guarantee (insurance backed). 

I don’t own my premises; can I still install solar panels using finance?

Solar panels paid for via finance are best suited to owner-occupier premises, but finance may still be worth it for a business leasing its premises if they have 10 or more years left on the lease. Of course, leasing businesses will need permission from the landlord for the project.

Can solar panels be installed on any size/type of roof?

Centreco specialise in solar panel installations of 2000 square metres and above, although other commercial solar installers may offer installations for businesses with smaller roofs.

A Note About Solar Panels and Electric Vehicles

If your business has a fleet of vehicles and/or provides company cars for staff, switching from a petrol or diesel fleet to one that runs on electric is not only better for the environment, but is the perfect partner for a solar panel installation. You could simultaneously reduce your carbon footprint, electricity costs, taxes and vehicle running costs.

The team at EV Future Solutions, another of our partners in the commercial solar sector, are experts in electric vehicle charging for the home and workplace. Fully independent, they offer an extensive range of the latest EV chargers as well as a complete end to end service including site survey, electrical design, groundworks, installation, solar panels and battery storage solutions.

EV Future Solutions kindly provided some information about the potential carbon and fuel savings made possible by switching to electric vehicles.

“By 2030, the sale of petrol and diesel vehicles will be banned in the UK. Switching to a fleet of electric vehicles powered by solar panel-generated electricity will futureproof your business, protect our planet’s future, cut air pollution and reduce your carbon footprint. It could also save many businesses an average of £2k per year on fuel and maintenance costs cut road taxes and city tolls.”

Potential Fuel Savings: Petrol vs Electric

Based on the average cost of running a petrol/diesel car at 16-17p per mile and the average running cost of an electric vehicle at 7-8p per mile, the potential savings are significant.

 Average MPGAverage annual savings (10,000 miles per year)
Small car (Renault Zoe)45£1,135.03
Medium car (Tesla Model 3)35£1,461.20
Large car (SUV Tesla Model X)25£2,048.29

Potential CO2 Savings

Electric vehicles produce zero tailpipe emissions. When you consider the average carbon footprint of the below petrol and diesel vehicles, making the switch makes a lot of sense for the environment.  

 Carbon footprint (10,000 miles per year)
Average petrol car2.81 tonnes of CO2e
Average diesel car2.71 tonnes of CO2e
Average diesel van4.37 tonnes of CO2e

For more information, take a look at our article Making the Switch to Electric Vehicles.

To sum up…

From cutting electricity costs and reducing your carbon footprint to futureproofing your business against future energy price increases, businesses in every sector can benefit from solar panel installation.

Perhaps you have decided that you will not be able to afford to install them? The truth is that thanks to finance leasing, businesses can get solar panels on their roof with no upfront costs. They can then pay for them over time using the money they save on reduced electricity costs, often with cash left over to reinvest in the business.

Maybe you aren’t convinced that the savings will be all that significant? No one can know that until a professional has done the calculations. Or, maybe you just aren’t that bothered about your business’ carbon footprint? That’s your call, but while you might not be interested, it is becoming more and more important to your customers.

In summary ,if you have made assumptions about solar panels without speaking to professionals, you owe it to your business, and the planet, to make a call.

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