Businesses turn to affordable, accessible solar energy

Over the past few years, most governments have been on a conscientious drive to tackle the issue of our increased dependency on fossil fuels. There are many universities and research centres developing and challenging the ways we produce and consume energy in a renewable and sustainable way. After all, the sun radiates enough energy onto the Earth in one hour to meet the entire plant’s energy needs for a whole year: the question has always been how to harness it. Chairman of the European Photovoltaic Solar Energy conference Daniel Lincot said: “The solar energy resource is enormous. There is thus an enormous resource that can be used everywhere and can, in principle, cover all the world energy demand from a renewable, safe and clean source.”

Much has been said about the benefits of installing solar panels in homes as a way of significantly reducing energy costs. Many countries in Europe and North America offer tax deductions for homes equipped with solar panels, and some even allow homes that generate more energy than they consume to feed their excess back into the national grid and get paid for it. But not a lot has been said about how businesses can benefit from the use of solar panels. The specialists at UK-based price comparison website the Eco Experts said: “Business solar panels are not much unlike residential solar panels. The main difference would be their application and perhaps the upgraded components that can make a fully fledged business solar panel system more durable.”

Cutting costs
For companies in which electricity costs are a big part of the overheads, operations can particularly benefit from the installation of solar panels. Generating its own energy, at least in part, would leave the company much better prepared to face increases in energy costs and to maintain its outgoings under control. And while many companies might initially be put off by the costs of installation associated with solar panels, the long-term savings can be considerable.

Even the installation costs can be much lower than companies often expect. Many governments subsidise the purchase of the equipment, or offer tax rebates and other incentives in order to ease the burden of these additional costs.  In the US, for instance, almost all of the 50 states offer tax credits of up to 30 percent for solar generators or heaters, which means that installation costs are slashed by almost a third. Germany and Sweden also offer installation incentives.

Because of these grants and subsidies, the installation of photovoltaic panels offers a significant return on investment for business. The Eco Experts estimate that 21m2 of roof space for solar panels costs around £6,000 and generates an estimated 2,550kWh annually. And though that is unlikely to be enough to power a whole building, the Eco Experts estimate that the total returns for the first year could be up to £657. In the UK, some local authorities also offer substantial installation grants of up to £1,000.

The UK government offers a further incentive in that it pays for the production of energy from solar panels. Under the feed-in tariff scheme, regardless of whether or not a business is consuming all the energy it generates through its photovoltaic cells, the government will pay a standard rate for it. It will also pay an additional rate for any excess energy a business or home generates but does not use and feeds back into the national grid. Other countries like Australia, Canada and many EU countries operate similar schemes.

There is the question of space. While businesses operating in larger office buildings will probably have more roof space available for the installation of panels, they are also likely to have a larger energy bill. More substantial bills might not be met exclusively through the use of solar energy. But as energy prices skyrocket all over the world, the clear advantage for businesses is the reduced operating costs of generating some of its own energy.

Across the Atlantic
In the US, businesses have the further alternative to lease the solar panels, thus eliminating installation costs altogether. Some American solar energy providers will install the equipment for free and handle all maintenance and operation costs for a set fee each month. This also includes all the energy the photovoltaic cells produce. Companies like Whole Foods and Staples signed up to leasing schemes, which can reduce electricity bills by 15 to 20 percent over the duration of the lease with no installation costs. In effect, companies like SunEdison and SolarCity are selling cheaper power to businesses and homes.

Though leasing schemes have been running in the US since 2003, they are still not widely available in Europe. The trend is likely to catch on, however; the UK already has solar companies offering leasing opportunities. Head of SolarCity Lyndon Rive expressed doubt, however. He said: “People don’t buy gas stations. People don’t buy utilities. Why are we having them buy solar equipment?”

In the US, manufacturing businesses such as Anheuser Busch have started turning to photovoltaic cells for their power. In 2008, the brewery’s Newark plant in New Jersey had over 7,000 panels, covering 130,000ft2 of the factory’s roof. The panels produce around 10 percent of the brewery’s electricity: equivalent to 1.1 million kWh annually, and enough to power 125 average New Jersey homes each year. Since then the company has also converted six acres of its Fairfield, California plant to accommodate 6,500 photovoltaic panels. Energy prices have been going up an average of 5.9 percent a year in the US, and by investing in the installation of solar panels to produce at least part of its own energy, Anheuser-Busch will be able to maintain their energy costs down over the years.

Businesses that have ample grounds or roof space are the ones that will be able to generate the most power. GreenWaste Recovery Materials is a processing facility in San Jose, California, which treats 2,000 tonnes of waste per day. In order to reduce its immense energy bill, the company installed 1,502 photovoltaic panels, distributed on a dual-axis system to maximise the efficiency of the cells. But the system occupies 1.8 acres, and though the company’s energy bill has been drastically reduced, they opted for leasing the equipment rather then investing in their own panels.

Data storage facilities can require a huge amount of energy to function. Servers must be on 24 hours a day and must be kept at a cool temperature. Intel installed a solar array at its New Mexico plant in order to supplement its capacity. It has been so successful that the company has since installed solar panels in nine locations in the US and Israel. The projects include a one megawatt solar panel field occupying around six acres in Folsom, California.

Catching the sun
One thing that all these projects have in common is their access to sunshine.
Photovoltaic cells will produce less energy in places with fewer hours of sun per year. That is a serious downside, one which limits the geographic locations where the costly installation of the cells will provide an adequate return on investment. The use of photovoltaic cells is popular in Sweden, for example, because local researchers have developed technologies that generate energy even on overcast days: though they are admittedly not as efficient as regular panels and are more expensive.

Intel and Anheuser-Busch have so far only invested in photovoltaic energy at their facilities located in sunnier climes. Even the US government is taking advantage of the country’s copious deserts. In California’s Mojave Desert, it has invested, through its ‘energy department loan guarantee scheme,’ in the largest solar energy project in the world. Exploring the most cutting-edge technology, the facility will rely on 350,000 curved mirrors reflecting light into boilers. As the water boils, it turns turbines that will generate enough electricity to power 140,000 homes.

Cheaper solar panels, manufactured mostly in China, have also been contributing to drive down installation costs and can make the transition to solar energy more viable to smaller businesses. Hefty subsidies by the Chinese government have significantly lowered the cost of photovoltaic cells, though the Chinese panels tend to be more rudimentary and often not as sophisticated and efficient as some others on the market. However, they can still significantly lower the cost of energy bills for small- and medium-sized enterprises.

The installation of solar panels can also be a huge asset in terms of marketing. Companies perceived as ‘green’ or as being eco-friendly are often seen as more socially responsible and may attract additional consumers because of that. Many companies are now tackling their carbon footprint as a way to enhance their corporate social responsibility and increase their appeal to customers.

Despite the high upfront costs, there are many clear advantages for businesses considering installing solar panels to help meet their energy needs. But like many infrastructural developments, the installation of photovoltaic cells must be carefully considered, not only in terms of investment but also in terms of the average amount of local sunshine per year, and as a possible branding strategy. But like the energy from the sun that powers the panels, possibilities for development are seemingly endless.