Modern times have provided many technological advancements that benefit homeowners and businesses alike. One of these areas is renewable energy, specifically solar, which stands to benefit our planet and people.
This article explores the financial, reputational and operational gains businesses can achieve through solar panels.
How Does Solar Power Work
Before detailing the benefits, here’s a quick introduction to solar power. We’ve all seen the panels – they contain photovoltaic (PV) cells made of semiconductors like silicon to absorb sunlight. The energy from sunlight excites their electrons, creating an electric current. This current is converted into the electricity needed for power, and any excess electricity can be stored in batteries or exported to the grid.
The UK is known for its overcast weather, so you’d be forgiven for thinking solar power is less of an option. However, as evidenced by commercial uptake, this is not the case. Solar panels generate electricity from daylight, not just direct sunlight. Furthermore, the UK’s cooler climate helps with efficiency. Long summer daylight hours and recent technological advancements make solar panels a viable option for the UK, and the financial benefits are both significant and attractive.
The Financial Benefits
For a business to decide if solar power is right for their commercial property, it must be financially viable offering a good return on investment (ROI).
Energy Bill Reduction
Obviously, because electricity is generated on-site, a business can significantly save on its electricity bill. Over the lifetime of a solar installation, especially for large commercial properties, large sums of money can be saved. There will also be protection from variable grid prices.
Affordable Installation
Whilst there are costs associated with installing solar panels for businesses, it doesn’t have to break the bank. If, following an assessment of the premises, it is decided solar panels are suitable, a finance package can be considered to spread the cost. No large outlay is then required. One option when considering finance is to structure the repayments so that the investment is cash flow positive from day one.
Convenient Installation
No business likes interruption to their continuity. One of the benefits of solar panels is their location – on the roof or in land space. Following an initial consultation, engineers will conduct an assessment of the ground space and roof structure to ensure suitability. A detailed proposal and system design will then be put forward for agreement, with consideration given to ensure no or minimal disruption to the business.
Low maintenance costs
Solar panels are generally low maintenance, with most modern panels being self-cleaning. Hence, once installed, maintenance costs are low. Annual inspections are recommended to ensure optimal performance and to identify cleaning needs. Sometimes, dirt and debris need to be removed to maximise efficiency. Some systems will provide an app to monitor how much energy you’ve made, which can help identify any issues early.
Energy Independence
When electricity is generated on-site instead of using external supplies, a business becomes more energy-independent. There is less exposure to varying prices and supply disruptions. When paired with batteries, solar power can offer an uninterruptable supply, ensuring business continuity. Overall, this makes planning more predictable and resilient.
Tax Incentives and Financial Benefits
Solar PV systems can be offset against taxable profits as a capital allowance. There are also some incentives put forward that businesses can take advantage of:
- Smart Export Guarantee, which allows excess energy to be exported back to the grid
- Enhanced Capital Allowances
- Any local and industry-specific grants that may be available
Further to this, one of the benefits of solar panels is the electricity generated from them is not subject to the Climate Change Levy, an environmental tax charged on the energy that businesses use.
The Reputational Benefits
Of course, not all benefits are immediately considered financial. Today, sustainability is high on the corporate agenda.
Corporate Governance
Especially in larger businesses, and more frequently in smaller businesses, Corporate Social Responsibility (CSR) features as part of an organisation’s governance to facilitate responsibly doing business while making a profit. Environmental Social Governance (ESG), which is derived from the spirit of the wider CSR, also forms part of corporate governance. Using renewable power features under both as a way of reducing the business’s carbon footprint. This is viewed favourably by stakeholders interacting with the business and is a quick win, with low risk, for any business wishing to act sustainably.
Perception
Whether a business likes it or not, they are judged. Customers, suppliers, partners, investors, and all other stakeholders will have a view of the business they are dealing with. Furthermore, if their interactions are formal, the relationship may be governed by policy constraints outside of the business – such as a customer’s supply chain policy. Another example is the investor’s view on ESG. It is, therefore, essential in today’s business environment that eco-conscious initiatives are demonstrated. Solar power can help with this, from attaining environmental credentials to marketing opportunities.
Marketing Opportunity
The use of solar power can help attain green credentials for showcasing environmental responsibility, appealing to eco-conscious customers and other stakeholders. With a boost in brand reputation, driven by a strong CSR policy, a business can become more attractive.
Further to this, with a reduction in energy costs, a business may wish to highlight that they pass such savings onto their customers. This will likely lead to higher engagement with their business.
Compliance
Compulsory compliance with laws and regulations, and voluntary compliance with professional bodies and charters, are set to feature more prominently as environmental concerns and targets grow. For instance, consider the net zero goals; it is likely legislation may be used to help achieve them. By adopting solar power, businesses can proactively get the benefits of solar panels early and before any demand spikes may affect installation costs.
When considering the supply chain end to end, it may be that customers and suppliers are either mandated or prefer to trade with businesses that have strong environmental policies. Using renewable energy is one significant step to demonstrating this.
Bob has been in the electrical industry since leaving school. He’s a time-served electrical engineer. After his installation days, he spent many years developing new and innovative electrical products with manufacturing partners around the globe. Bob set up Greenlite Group over fifteen years ago with his brother Ricky as a family business focusing on renewable electrical technologies to help companies reduce their carbon footprint. They focus on LED lighting, Voltage Optimisation, EV charging, and Solar arrays and boast an impressive customer base of leading blue chip companies. He’s committed to helping others develop their abilities and advocates for the personal and professional development of the whole Greenlite team. In his spare time, he’s still chasing his dream of being a rock n roll star.