A new day is dawning for UK energy. As solar becomes more efficient and cost-effective, businesses can now profit directly from on-site generation. Alongside new legislation helping the growth of this market and a focus on sustainable business practices, on-site solar generation stands ready to become a standard for many businesses. We explore how they could benefit here.
The green energy revolution
Solar power has undergone a renaissance in the last thirty years. It was originally rejected for its high production costs. In the case of silicon panelling, these were both environmental and financial.
On top of that, the technology could not initially compete in terms of raw efficiency. Coal, oil or natural gas provide returns on chemical energy between 35-45%. But, even state of the art solar only sat at around 15% efficiency.
Yet green energy is not gaining traction solely because of improved efficiency. The challenge of climate change is most responsible for the growth of renewables.
Whilst fossil fuels powered the industrial revolution and most of the 20th century. Solar, wind, and other green power sources stand to become the oil of the 21st century.
The bottom line is no longer framed by immediate short-term gains, and the solar energy industry is poised to benefit most from that fact.
What benefits could you gain from on-site solar?
Energy security is a growing concern for businesses. As distribution and other third party costs continue to rise, many are doubtful of the reliability of their energy contracts.
While procuring flexible energy contracts can return some control to end-users, they still leave you subject to supplier costs. But generating your own electricity could avoid these completely. It is estimated that non-commodity costs could account for 60% of energy bills for commercial and industrial organisations in 2020.
You may not be able to totally replace your energy supply with on-site generation. But with potential savings of more than half your bill, can you afford not to replace some of it?
On-site generation can also provide a passive income stream. When combined with battery storage technology, solar energy you generate can be sold back to the grid during times of peak demand.
This means that you can switch back and forth between the grid and your own supply depending on market fluctuations at different times of the day. Doing this creates two opportunities to earn:
- selling energy when demand is high, and
- saving on the energy you buy from the grid by only doing so during low demand periods.
On-site generation offers this freedom.
Flying a green flag
Finally, we have the branding message that an investment like this sends. Your business can show its commitment to net zero, and climate security, by creating a clean energy source on-site.
Would-be investors will be looking for businesses to lead from the front after Rishi Sunak’s recent and public commitment to TCFD (Task Force for Climate Related Disclosures) regulations. These are usually voluntary schemes for businesses to take part in. But the UK will be the first country to make the scheme mandatory. It only applies to a minority of firms currently. As climate ambitions ramp up the criteria is likely to broaden to include other businesses.
In any case, investors will be likely to favour sustainable business models going forward as they will be more resilient to the effects of climate change and represent a safer investment.
At Monarch, we have championed sustainable practices for our clients for over 30 years. We offer a comprehensive service that can improve your energy and utilities efficiency and costs at all stages. Whether that be with on-site generation guidance, intelligent and flexible procurement options or through intelligent metering. To find out how you could benefit from these services, get in touch.