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20 REASONS FOR COMMERCIAL SOLAR ROOFS

Commercial Rooftops

If you own or lease one of the roofs that make up the UK’s portfolio of 600,000 acres of south facing commercial shed roofs, there are at least 20 reasons – carrots and sticks, of course – for putting solar PV on them.

You will:

  1. Make or save money
  2. Contribute to your ESG challenge
  3. Reduce CO2 emissions
  4. Avoid having to give tenants a dirty energy discount on leases
  5. Deliver on-site electricity resilience
  6. Avoid increases in green taxes
  7. Support the Government’s NetZero50 target
  8. Improve the EPC of your sheds
  9. Utilise generous capital allowances for solar panels over the next 2 years
  10. Improve the marketability of your real estate portfolio
  11. 100% rebate on business rates from 2023
  12. UK energy security
  13. UK electricity generation resilience
  14. Corporate reputation
  15. Fastest way to achieve sustainability objectives
  16. Earn rent in void periods
  17. Financial investment
  18. Support EV charging
  19. Permitted development
  20. Improved financial planning

Let’s look at each of these in a little bit more detail.

1. Make or save money
If you are a landlord and you put solar panels on your tenants’ roofs – whether funded by you or by
Footprint Zero – there is an opportunity to make a margin on the sale of the green electricity to your
tenant. If you are an owner-occupier you will save money from Day 1 and you will have paid off the
solar array by Year 7-9.

2. Contribute to your ESG challenge
With 600,000 acres of south facing commercial roofs in the UK and only 5% of them with solar panels
on them, there is some distance for British business to go to meet this aspect of their ESG challenge.
There is no time or tolerance for the greenwashing of the past, the City and investors are conducting
ESG audits and, as Larry says, if your ESG doesn’t cut the mustard your sources of funding will dry up.

3. Reduce CO2 emissions
Using solar PV on your sheds reduces your CO2 emissions. It does.

4. Avoid having to give tenants a dirty energy discount on leases
If you own sheds, your potential tenants need clean electricity sheds to meet their own ESG
challenges. If your sheds don’t come with clean electricity the tenant will either demand a substantial
discount (and then have to think how they are going to use the discount to keep their own ESG up to
scratch) or they will walk.

5. Deliver on-site electricity resilience
Your shed roof is an un-utilised asset and your sheds use increasing amounts of electricity. On-site
solar electricity generation not only gives you all the benefits outlined in this article but also ensures
that you always have electricity, especially when coupled with battery storage.

6. Avoid increases in green taxes
The Government already have in place green taxes in the form of the Climate Change Levy and other
taxation can be introduced in short order if the Government believe that Britain is missing its carbon
reduction targets. Taxes only go up.

7. Support the Government’s NetZero50 target
The Government has a target for the UK to be Net Zero on CO2 emissions by 2050. There is a
corporate and social responsibility to address climate change and even try to be
NetZeroFasterThan50.

8. Improve the EPC of your buildings
Placing solar PV on your shed roofs will improve the EPC of the shed. It will.

9. Utilise generous capital allowances for solar panels over the next 2 years
‘For expenditure incurred from 1 April 2021 until the end of March 2023, companies can claim 50%
capital allowances on qualifying plant and machinery investments’ (HM Treasury). Solar panels are
qualifying plant and machinery investments.

10. Improve the marketability of your real estate portfolio
Your tenants also have ESG challenges to meet on behalf of their investors, employees and
customers. Meeting your own ESG challenges with solar PV on your sheds also helps your tenants
meet their ESG challenges.

11. 100% rebate on business rates from 2023
The Government will introduce a 100% business rates exemption for eligible plant and machinery
used in onsite renewable energy generation and storage, such as rooftop solar panels and battery
storage used with renewables and electric vehicle charging points, from 2023 until 2035.

12. UK energy security
Installing solar PV on 600,000 acres of south facing rooftops of commercial sheds and warehouses will
add around 200GW of green electricity to the grid, improving the UK’s energy security by generating
our own electricity. That figure could double by adding the east-west orientated roofs.

13. UK electricity generation resilience
Until relatively recently electricity was only generated at a small number of coal, gas, hydro and
nuclear plants and consumers were at the other end of a long distribution network. These days every
solar PV roof is a power plant generating electricity exactly where it’s needed, creating green energy
hubs – which sell unused solar electricity into the grid – and electricity generation resilience across the
country.

14. Corporate reputation
Some companies are running foul of the sustainability ‘say-do gap’ – saying they are doing something
sustainable when they are doing nothing or too little to ‘qualify’. This is called greenwashing. Solar PV
on commercial sheds and warehouses is a visible demonstration of corporate commitment to
sustainability and enhances corporate reputation for sustainability.

15. Fastest way to achieve sustainability objectives
The owners and occupiers of commercial sheds and warehouses need to address their Environmental,
Social and Governance (ESG) standards, CO2 reduction, electricity costs, on-site electricity resilience
etc today. Rooftop solar PV is the fastest way to achieve these aims. Action this day!

16. Earn rent in void periods
If you own a portfolio of commercial sheds and warehouses, from time to time there are void periods
when some of them are not being leased out. During void periods your solar PV rooftop ‘tenant’
keeps paying ‘rent’ through electricity sales to the grid – small print: you won’t earn as much from the
grid as you will from a tenant and you must have a grid connection with permission to export.

17. Financial investment
Solar PV is a financial investment which typically reaches breakeven on capital invested in 7-9 years,
has an IRR of 10-15% and creates significant value (savings and income) over a 25 year term. We are
working on a 3MW solar PV roof (180,000 sq ft) which is likely to reach breakeven on capital invested
in around 5 years, has an IRR approaching 20% and should create over £20m in value over its 25 year
term. As electricity prices go up, the numbers just get better for solar PV.

18. Support EV charging
We are already transitioning to commercial EV fleets. Your EVs and those visiting your sites need to charge. Combine this issue with rising electricity costs, and solar PV on the roofs of your commercial sheds and warehouses becomes both a practical and a financial requirement.

19. Permitted development
Solar PV is a permitted development, which keeps down costs and project time. There are some constraints, including: solar PV must not be more than 200mm above the roof surface (on flat roof not more than 1m); the solar PV must not be within 1m of the roof edge; the solar PV must not be more than 1MW (less than around 60,000 sq ft).

20. Improved financial planning
Whether your solar PV is funded by you or by others, you will have improved your financial planning ability into the future because you will know the cost of your electricity. Where you have funded the installation, and depending on the solar PV installation size, you may pay nothing or very little to an external electricity supplier from the day that your solar PV installation starts generating green electricity for you. Where others have funded the solar PV installation you should (generally) pay no re per unit of electricity than you are today and you should have a fixed electricity cost inflation. Solar PV gives you certainty over your electricity costs for improved financial planning.

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