Rooftop Solar: An Obvious Boost to Public Sector Finances

A study released by Kingspan Energy showed the enormous energy potential of the UK’s large-scale roof space. One of the key findings of the study, based on Government data and analysis of existing system performance, was that the entire 199,738GWh of annual electricity demand of the private and public sectors could be met by installing rooftop Photovoltaic (PV) on just 61% of the UK’s 2,500km2 of south-facing large-scale roof space. But until now, take-up of large scale rooftop solar PV has been disappointing compared with other nations. In this piece, Peter Turley from Kingspan Energy explains what they are doing to help drive the uptake of rooftop solar PV in the public sector and beyond, and makes a compelling case for all organisations to install solar now.

Unlike some other forms of energy, it doesn’t take much to persuade people of the benefits of solar. The idea of harnessing energy directly from the sun captures the imagination in ways that other technology just can’t, especially when you explain that solar panels can still work even under the UK’s typically cloudy skies. Of course, this is helped by the relatively unobtrusive nature of rooftop solar PV systems when compared with other renewables; an attribute that has largely protected solar from some of the public perception issues associated with wind or wave technology. This fact is illustrated time and again in the Department of Energy and Climate Change’s (DECC) Public Attitudes Tracker, which puts solar in all its forms as the most popular form of renewable energy, with 82% approval in the latest survey.1

Even more compelling than the public relations case for solar is the long-term economic one. Large cumulative energy price rises in recent years, coupled with predictions for further price rises to come, have made the idea of self-generation attractive to a wide range of organisations. Add to this concern about energy shortages in the medium term, whether due to a lack of grid generating capacity or geopolitical instability, and the attraction becomes stronger. The fear of blackouts impacting vital services for the long-term simply cannot be countenanced by some organisations, especially with back-up systems not designed for prolonged power generation.

But where large-scale rooftop solar has fallen down, until now, is the upfront capital cost. While most in the public and private sectors are convinced of the long-term benefits of rooftop self-generation, the upfront cost of installing solar PV systems has proven prohibitive to many. It is true that the cost of panels has fallen dramatically in recent years, and larger, well-capitalised businesses and organisations are now able to make the investment and benefit from reduced energy bills and a relatively rapid return on their investment. But smaller organisations and the public sector often lack the liquidity to make such an investment. What remains of budgets after years of successive cuts and reduced cash reserves must be used to cover day-to-day running costs; there is little room for investment.

Even where the capital is theoretically available, solar’s mid-term ROI often loses out in the face of the more immediate returns many shareholders demand, or the political expediency of short-term investments that will deliver during present terms of office.

With the outlook for energy security, price rises and fossil fuel supplies as it is, not to mention the growing threat of climate change, this situation clearly cannot continue. It is incumbent on all stakeholders to do whatever they can to remove the barriers that have held solar back so far. For Governments, this means a clear set of incentives to help the industry reach critical mass, and leading by example in public sector installations. For building owners, this means a more proactive approach to improving the energy performance of their assets. For tenants, this means understanding the impact of energy bills on their organisation, and demanding buildings that deliver renewable energy at lower cost. Finally, for solution providers like Kingspan Energy, this means exploring new models to help more organisations benefit from self-generated rooftop solar PV. That is why we launched our fully-funded rooftop solar PV package.

This is a 100% funded solution, with no upfront cost or capital risk to the end client. In return for a 25 year lease on the roof space, we design, install and maintain a bespoke optimised solar PV solution. The electricity generated by the system is supplied to the building tenant at lower rates than would otherwise be supplied from the grid, with costs index-linked to RPI rather than subject to volatile energy wholesale prices.

It means that organisations which lack the capital to invest in self-funded solutions can still unlock the reduced operational costs, increased energy security and improved environmental credentials of rooftop solar PV. Our studies have shown the huge positive impact this model could have on the UK.

If our fully-funded systems were installed on just 61% of the country’s south-facing large-scale roof space, it would meet the entire current demand of the UK public and private sectors. In this scenario, the total electricity bill for UK organisations would fall from £20.4bn to £15.3bn – a saving of over £5bn per year annually. To put that figure into context, it is equivalent to over 5% of the UK’s annual Education budget, or just shy of the entire annual NHS budget for Wales. The total annual saving on electricity bills is equal to 0.32% of UK GDP.2

If we look at the figures specifically for the public sector, the annual sector demand of 18,822 GWh of electricity, which currently costs £1.9bn, would cost just £1.4bn under completely fully-funded systems. This gives a potential annual saving to the sector of £479m every year; money which could be reinvested elsewhere to deliver enormous benefits.

The average British organisation with a half-hourly meter (effectively any medium-sized concern) would save £31,147 on annual electricity bills immediately, with no capital outlay.

Of course, these figures are only based on the adoption of our fully-funded solution on 61% of the UK’s south-facing roof space. Every organisation that opts for a self-funded solution, like the ones we have provided to many clients, will bring the overall electricity bill down even further.

Clearly then, there is a compelling case for UK large-scale rooftop solar, and fewer obstacles to prevent its widespread adoption across the UK. For the public sector, pressure on budgets is unlikely to ease any time soon, and as the challenge of protecting essential services becomes even more difficult, reducing energy costs will become a more important goal. Particularly as they are one of the few remaining variable costs that can be managed without a negative impact on services.

The Government has already recognised this opportunity, committing to installing at least 1GW of rooftop solar PV capacity on the public sector estate. Speaking at the unveiling of Kingspan’s report, Amber Rudd MP, Minister at the Department for Energy and Climate Change, reiterated the Government’s ambition for the growth of solar on roofs and brownfield sites, and lauded the huge benefits from solar highlighted in Kingspan’s study.

Other organisations are playing their part, with the British Photovoltaic Association launching its ‘Powering Knowledge’ campaign just after the publication of Kingspan’s study, aiming to reduce the £500m British schools spend on electricity each year. Again, under the fully-funded model, the annual energy bill saving for schools here would be approximately £125m, or enough to build eight additional new schools every year. The ‘Powering Knowledge’ campaign has the support of both DECC and the Department for Education, with the Government keen to make the most of the potential savings on offer.

The opportunity rooftop solar PV presents to the public sector, and the UK as a whole, is clear. With innovate funding models like Kingspan Energy’s, and a firm push from the Government and the industry to drive increased uptake of solar across the sector, the next year ought to see a significant change in the number of public organisations benefitting from rooftop solar PV. This will result in lower bills, increased security and leaner organisations better able to invest in the services they exist to provide. Simply put, fully-funded rooftop solar PV could provide an immediate and much-needed financial boost to the public sector, and every public sector estate manager should now be considering whether it is an appropriate solution for their premises.

1 – DECC Public Attitudes Tracker Wave 10, August 2014

2 – ‘Cutting Costs: The Energy Potential of UK Commercial Rooftops’ Study by Kingspan Energy


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s