Ecobuild London: UK pins hope on commercial rooftop PV

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Most of the talk during day one of the Ecobuild was centered on the UK’s energy future, especially the timeframe concerning increased storage and whether PV can sustain itself following the cuts in governmental support.

Day two shifted focus onto pragmatic solutions, highlighting the potential of commercial rooftop PV to keep the country’s solar hopes alive.

Dan Grandage, head of responsible property investment at Aberdeen Asset Management, which has a combined portfolio of £290.5 billion, spoke at the show, representing the interests of large commercial property owners.

“The aim of most landlords,” said Grandage “is to comply with environmental standards for their properties. And they do so via various mechanisms, including the generation of renewable energy onsite. Naturally, landlords end up choosing PV since biomass solutions are often too big for their sites and landlords avoid having wind turbines so close to the properties.”

Aberdeen Asset Management, which has offices around the world, has been advising its UK clients for a number of years to install solar rooftops. The results of the projects, pre and post the solar subsidy cuts, are revealing.

Grandage referred to two cases, dating 2011 and 2015. In the first case, their client was able to secure a high feed-in tariff (FIT), but the costs of the technology were high. To gain the highest tariff possible, the client reduced the size of the PV system so that it qualified for a higher tariff band.

“In the second case,” Grandage said “the client secured a much reduced tariff but the overall rate of return (ROI) of the project remained almost the same due to the technology being significantly less expensive,” despite the subsidy cuts.

Rooftop PV in a subsidy free market

What clients want to know now is whether rooftop PV makes business sense in the era of no subsidies. The answer, argued Grandage, remains yes.

“We believe a 5 to 7% project ROI in a subsidy free market is realistic,” said Grandage. The reason is that the price of the technology itself keeps reducing, while now being able to avoid the FIT accreditation process brings the costs down further. So clients can install even larger PV systems, without having to worry about the FIT banding, and can simply focus on maximizing their system output.

“Furthermore, other fundamental reasons that drove commercial rooftop PV in the subsidy era remain intact too,” explained Grandage. These include the improvement of the property Energy Performance Certificates (EPC) rating, increasing the reputation and profile of the property tenant and offering carbon emissions reduction.

The role of storage

“Within this landscape, energy storage can play a role too,” said Barny Evans, renewable energy and sustainability consultant at WSP PB, a company that delivers commercial projects for investors.

Storage is particularly advantageous for large commercial businesses, because local power distribution networks charge them higher fees than residences. “These fees are particularly high between 4pm to 7pm daily, thus if storage system owners can use their stored power during this time, they will have a great financial benefit,” Evans said.

“On the contrary,” he added, “domestic PV and storage solutions differ from commercial ones substantially and the business case is less clear.”

“Nevertheless, with the current reduced FITs or with no subsidy at all, the time for commercial installations is now, and the business models can already deliver,” concluded Evans.

The downside to this, as some stakeholders told pv magazine, is that in the UK property owners and tenants often have a difference of opinions and this delays arrangements to install commercial rooftop PV.