To Solar PV or not to Solar PV? We can help you decide

January 17, 2024
Solar PV
The Minimum Energy Efficiency Standards (MEES), huge rise in utility costs, climate emergency and focus on Environmental, Social and Governance (ESG), mean that more occupiers, landlords and owners of commercial property are exploring solar PV as a potential solution to decarbonise their buildings and improve EPC ratings.

And the good news is that there is a lot of potential for commercial premises to support the installation of solar PV, either on roofs, freestanding on the ground or making use of unused land such as car parks.

This is exactly what Portsmouth City Council is doing at Lakeside North, where our Portsmouth office is based.

But where should you start with solar PV? Is it right for you? And how should you go about it?

With in-depth experience advising on several commercial solar PV installation projects, we provide some of our top tips on the things to take into account throughout your solar PV journey.

The starting point is to assess whether solar PV is right for you in the first place.

To help answer this, it is important to think about what the strategy is for your building or portfolio, as this will inform what route you go down. Here are just some of the core questions to ask yourself throughout this process.

Key considerations

Is my motivation to reduce energy bills?

If so, you need to think about the investment versus return of this.

You might be paying out £1.5m a year in energy bills but the return on the cost needs to be calculated not just based on installation, but also considering the building’s structure and whether it can support solar PV, whether roof coverings will last the lifespan, as well as the capital cost upfront.

It may be some time until you are ‘back in profit’ and can effectively reduce your energy bills.

Is the priority financial return or decarbonisation?

If your main aim is to decarbonise your portfolio, Solar PV could be beneficial, particularly for landlords trying to improve EPC ratings in line with MEES.

However, think about whether solar PV is the best way to achieve that. There could be other activities with a less costly impact, such as LED lighting.

Are you doing it to offset costs or for political reasons because of a Declaration of Climate Emergency? Many local authorities are in this position, and solar PV has the potential to support with this.

However, asses what the anticipated financial return of solar PV installation will be and how long it will take to get a return on your investment.

Landlords can also consider building in provision for solar PV within a Green Lease at any lease renewals to afford yourself the opportunity to install solar PV on tenant roofs, effectively adding to your rental income.

Do I understand the finances and charge back structures?

It is important to understand the technicalities of how Solar PV works from a finance and charge back structure point of view and build this into your planning and budgeting.

The easiest option is to match the sizing of your solar PV installation to the consumption of the building. This means that there is then no requirement to export energy back to the grid, which can be advantageous for those wanting to store and use the energy themselves.

In this case, you just need to have the right programming in place to ensure that, when solar panels reach certain level, they don’t discharge power anymore.

In the event your unit connects to the National Grid, have you contacted the Distribution Network Operators (DNO) to discuss the process for this and will they be able to support your connection / energy input? And is there a sub-station nearby that you can connect to and are way leaves required with the landowner in order to connect to it?

Take into account the fact that charge back has got a lot worse which means that the savings on your electricity bills won’t be what they once were. This will impact the overall payback timeframe of your investment.

Meanwhile, whilst battery storage in commercial settings reduces dependence on grid-produced electricity, supports environmental sustainability and lower operational costs, revenues generated from it have dropped by 71%.

What is the best technology or me?

You can have panels that move with the sun, roof mounted panels, ground mounted panels, panels that are double-sided and pick up an extra 10% of energy, which can prove valuable if you have a large surface area you want to cover.

But you need to consider what your building or site can accommodate in structural terms.

If the panels are going on the building, what are you doing underneath and is the quality of the roof sufficient to account for things such as water runoff? This is where it is important to get the advice of surveyors and structural engineers to avoid potential issues like water retention or leaking roofs.

If you are a tenant in the building where you want to install solar PV, you will need to think about your lease length the life expectancy of the roof covering and what your dilapidations requirements are at lease end. You may also need to think about a potential Licence to Alter, in order to install the panels in the first place.

As landlords receive more and more requests from tenants to install solar PV on their roofs, dealing with considerations like what happens to the solar PV at lease end or the end of their lifespan and who is liable for maintenance are becoming a priority and are, increasingly, being built into lease terms.

Will I need planning permission?

Most planning applications now want some element of solar PV or renewable energy to be included, and we are dealing with lots of solar applications – both for ground and building mounted options.

There are a certain number of permitted development rights in relation to the installation of renewables like Solar PV, up to a power supply of about 50MW – which is quite a lot for a single building. This means that small-scale installations might not need to seek planning permission.

These opportunities should be investigated through planning experts and is something which our planning team can assist with.

Where you do need planning permission and to ensure the best chance of approval, you will need to think about the landscaping and visual impact of the panels.

For the most part, this is less of an issue with building mounted panels, but for freestanding panels there can be additional considerations to take into account.

This can include impact on agricultural land value, flood risk, heritage and more. In some cases, we see cross-farming, with sheep farmed on the same site which has the dual benefit of allowing you to keep agricultural use, whilst maintaining the site (not having to mow it!).

Cabling and connection to the National Grid can also have an impact on planning and mean that a scheme is refused if it cannot secure the right wayleaves or connection to the grid.

Planning permission for solar PV installation may sometimes be temporary (circa 25 years) which can help with justification in planning terms. This can also apply to other renewable schemes such as battery installation which usually needs a partial replacement at about 15 years.

How could it affect business rates?

It is important to be aware that solar PV panels can have a cost implication when considering the impact on a business rates assessment.

All non-domestic solar PV generating assets are rateable, but the amount depends on certain variables such as the number and size of the panels, as well as the energy output.

Following a change in business rates regulations in April 2022, ratepayers who install equipment, such as rooftop solar panels, wind turbines, battery storage, and electric vehicle storage points are eligible for a 12-month business rates exemption from the date of installation. If you aren’t sure whether you might qualify for such an exemption, our business rates experts can help.

Seek professional advice

There are a multitude of things to consider when assessing the merits of solar PV installation, and in some cases that might mean deciding that it isn’t for you.

To help you come to an informed decision – whether you are an owner / occupier of commercial premises, or you are a landlord or investor – our Energy & Sustainability team can help.

We will put together a project team of professionals who, together with our own experts, can support you with everything from the initial assessment of solar PV potential and strategy, to achieving planning permission and supporting with the project management of installation, whilst making the most of any business rates savings that may be applicable.

For a no obligation discussion about solar PV potential, get in touch with our energy and sustainability team today.