Are Commercial/Community Solar projects the thing of the past?
Recent proposed changes to the Feed In Tariff have put the Solar Industry in turmoil!?
Most solar installers are inundated with requests for clients to install their panels before the 12th December deadline. Most homeowners who book an installation in time, will be OK. But, many commercial/community sized projects are unlikely to now happen, due to planning applications, and DNO connection etc? Viridis has “lost” several projects as a result!
However, is it really all “doom and gloom” for these size projects, and does the new tariff proposal make them economically unviable?? Maybe not??
Unlike a domestic installation, which can be turned round in a matter of a few weeks? A commercial sized project (say 30kwp +?) tends to take much longer?
A typical process would look like this:
1). The idea is thought
2). A number of quotes recieved.
3). many board/committee meeting later, a decision is made.
4). Planning is approved etc etc..
This can take several months?
Now, the price Solar Panels has come down in the last few months (hence, one of the reasons for the tariff cuts??). Therefore, your initial quote (and the figures you’ve based your decision on) may well be out of date?
A few months ago, the “average” quote for a 50kwp system was in the region of £140,000.
The returns were good -
On a good South facing roof, and assuming all the electricity generated was used on site, the the first year return would have been around £18,000. A ROI of around 13%, and reap a 25 year profit somewhere in the region of £500,000!
However, the price of such installation now, is much nearer £100,000?
Therefore, a first year ROI of nearer 18%!
The recent, proposed , tariff cut on this sized installation (32.9p – 15.2p), puts a slightly different spin on things? But, is it economically unviable?
Under the new tariff (and new installation cost), the first year return would be around £11,000. A ROI of 11%, (not a million miles away from the original figure?).
On the next scale up (50kwp – 100kwp), the reduction is not so huge (19p-12.9p). Therefore, at this level (and with reduced install costs/kwp?), the ROI could be slightly higher?
Of course, for some companies, it’s not just about the financial return? But also the carbon benefits?
Many companies that supply much larger companies, are being “forced” to reduce their carbon emissions? This is one way of achieving this, and getting some great PR as a consequence?
Many companies may not have the necessary capital to install Solar Panels? However, there are now several financial institutions offering extremely good finance deals, that often mean that the client is “cash positive” from year one?!
If you would like any further advice on commercial sized PV installations, then call Viridis on 0845 437 4484, or email info@viridisec.co.uk.