Image: Scott Webb (Unsplash).

As commercial and industrial (C&I) companies increasingly look to decarbonise their operations ahead of the UK’s commitment to net zero by 2050, solar PV offers an attractive route to zero-carbon electricity.

According to a survey conducted by npower Business Solutions, 78% of organisations said they had already invested, or were planning to invest in solar. As the technology has developed, it has become more flexible, with new solutions available and new financial models allowing companies to take the jump into solar self-generation.

There are numerous benefits for companies considering solar, including hedging against price exposure, allowing companies to fix their energy costs going forwards. Beyond this there is also a reputational benefit, as Paul Warke, engineering & continuous improvement manager from British manufacturer PZ Cussons explained at a recent roundtable sponsored by npower Business Solutions and held by Solar Media.

“I think everyone is trying to get something that they can use to try and get their customers to buy their products, and sustainability is one of the key things we have right now,” said Warke. “The awareness of carbon emissions and general waste at the present time is very, very high.”

It was a sentiment echoed by other attendees at the roundtable, including Chris Carlsen from the Lancashire Care NHS Foundation Trust, who pointed out that a solar installation is one of the best posters you can have for sustainability, and one that will stay up for decades.

Increased efficiencies and increased options

One key point to come out of the discussion was the range of solutions available to C&I customers, both in terms of technological options and financial models.

“There has been a rapid advancement in solar technology, especially in the last couple of years,” said Christelle Barnes, UK country manager at SolarEdge. “Installers now have the most innovative technology available to them, which, combined with the knowledge and understanding they have about what solar can do, has brought a great change to the way solar is perceived. It's now a technology that can do so much more than just generate electricity.”

One technological option that has begun to be increasingly popular is solar carports, with Barnes adding that SolarEdge has installed more in the past six months than the rest of her five years at the company. The ground-mount canopy structures provide both solar generation and protection for vehicles, and offer a way for companies to efficiently utilise space within their carparks.

This is appealing to many companies who may not be able to utilise their rooftops for solar for a number of reasons, or who simply want to maximise the amount of solar available to them. Technological efficiencies are further increasing the generation proposition of all installations, including carports, rooftop and ground-mount.

“Roof space has always been a premium,” said Phil Godfred, country manager UK&I at LONGi Solar, “but module efficiencies are helping to ease that. If you look ten years ago,” he continued, “a 245W system required a 60 cell module.”

“Now you're talking 350W and above, for the same footprint,” said Godfred. “So the power generation is a hell of a lot more. You've also got the advancement in inverters. When I started off at SMA a few years ago you had a 15-25kW string inverter, that was the biggest three phase inverter going in. Now look at it, it's 150kW, it's 250kW. So space has been a premium but there's been an increase in power output, which has helped.”

Beyond the modules and inverters, ground-mount systems have also improved, allowing more companies to take full advantage of areas of land which may previously have been considered unsuitable for a solar installation.

Graham Provest, I&C energy solutions sales for npower Business Solutions, pointed to a site the company is developing for a company currently on difficult terrain.

“It was on a site that was made up of different types of land, there was some very good soil but there's also a lot of rocky outcrops. The nice thing is that there is technology which has allowed us to develop mounting solutions that can do that across different areas now. Three or four years ago, we would really struggle on changing surfaces and doing elements like that, so I think there's lots of small developments that are happening within the market.”

Combined with elements like carports, these technological jumps will continue to drive the pace of C&I solar uptake. But more is likely to continue to grow the value proposition of solar going forwards, in particular as companies look to the potential for technologies like storage alongside solar, allowing them to optimise their self-generation and potentially ease grid connection in constrained areas.

“We'll be seeing higher capacity hybrid inverters as storage will play a huge role in the C&I market” said Ivan Ivanov, senior product manager at Huawei Digital Power. “And I will say that the demand for storage is already here, not only for residential, but for commercial as well.

Flexible financial models

Along with a range of technical solutions, C&I customers can also choose a number of different financial models when looking to install solar. This is particularly important for the growth of the market, as 43% of companies recently surveyed by npower Business Solutions believe that the cost of installing solar PV is too high for their business.

Speaking at the roundtable, Provest said that around 80% of the projects the company is currently doing are power purchase agreements (PPAs). Often this is not because they couldn’t afford to purchase the installation outright, but because it makes commercial sense to offset some of the costs. This provides companies with a level of flexibility, with npower Business Solutions offering customers the ability to come out of the PPA if they choose. 

PPAs were highlighted as one of the most popular routes to solar adoption of C&I customers, with Carlsen from Lancashire Care NHS Foundation Trust saying that is the pathway the NHS is particularly focused on. 

“This is a risk averse path for the trust, if you can install it, maintain it and we just buy the energy from you,” he explained. “I think that would be the optimal way to go forwards, because the NHS is just getting to work in terms of solar, and we haven't got any, any funding at all.”

Coming off the back of the COVID-19 pandemic, finding the right financial path to solar for C&I customers is particularly important. According to npower Business Solutions’ survey though, 30% of clients are still progressing as planned, 18% said that they are experiencing some long-term COVID-19 implications, 22% are experiencing a short-term impact but do not expect it to last into the long-term and some other businesses have actually grown through the pandemic.

Solar: a simple proposition

Whilst flexible financial models can certainly ease the challenges associated with the adoption of solar, as Barnes pointed out in the roundtable, it will always be a big investment for a company. As such, it is important they are given all the information and support they require to ensure they’re comfortable that it is a safe decision going in.

One aspect of this is that the perceived complexity and technology risk continues to be a barrier said Kevin McCann, senior policy analyst at Solar Energy UK, in particular for smaller companies.

“Partly because so many people still basically receive a flat rate domestic electricity bill, I wonder about the degree to which people realise that there are lots of different ways in which you can finance new projects now, including zero capital outlay.”

Solar companies need to have a simple, and straightforward proposition to take to C&I customers to highlight the numerous benefits of adopting solar technology. This was something emphasised by Carlsen, who said: “When I take this to the board for a decision, it needs to be simple. It needs to be if you invest why you save. That's it, that's all they want to know.”

This was echoed by Warke from PZ Cussons who highlighted the complexity of government regulation and the energy markets at the moment.

Both agreed that what they need from the solar sector was a clear and simple proposition that highlighted the economic savings and additional benefits of solar – such as easing the installation of electric vehicle charging points by utilising self-generation to minimise the impact of the grid – along with case studies.

npower Business Solutions’ survey found that 86% of businesses believe solar PV is the easiest and most cost-effective way for businesses to switch to renewable energy. But a third of businesses don’t fully understand how installing solar could benefit their business.

The opportunity in the C&I space is continuing to grow at pace as companies look to green their operations, so the time is now for solar companies to ensure they are presenting a flexible, clear proposition to take full advantage of the market growth.