If you’re a UK small business with a warehouse, then that warehouse roof could be an ideal space for a solar photovoltaic installation.
With just over 1,000,000 deployments nationwide, solar photovoltaic panels (solar PV) have become a popular investment for many in the UK who not only want a clean energy alternative, but who also want to reduce their energy costs.
Energy supply remains the UK’s second-largest emitter of greenhouse gases (GHGs), but from 1990 – 2019 these emissions were reduced by 66 percent.
Solar panels played a role in this. Increasing their deployment will continue to help drive the transition away from fossil fuels.
This guide will discuss pros and cons, both financial and environmental, along with potential costs to highlight how your business and the environment can benefit from installing a commercial solar pv system on your warehouse roof.
Residential vs commercial solar panels
All photovoltaic solar panels are made up of solar cells. These cells convert sunlight into an electrical charge.
Panels come in a range of sizes, each designed for different sized installations.
This table outlines the differences between typical photovoltaic panel configurations used in smaller residential and larger commercial installations.
| Type of installation | Installation capacity | Number of cells per panel | Panel length | Panel width | Panel depth | Panel area |
|---|---|---|---|---|---|---|
| Residential | 0 - 4kWh / 4 -10kWh | 60 / 72 | 160cm / 192cm | 97cm / 97cm | 3.5 - 5cm | 1.5m2 / 1.9m2 |
| Commercial | 10 - 50kWh / >50kWh | 72 / 96 | 192cm / 155cm | 97cm / 102cm | 3.5 - 5cm | 1.9m2 / 1.6m2 |
Depending on the brand and model, the average solar pv panel output is 250 – 400 watts.
A higher number of cells should provide a higher wattage output. However, this isn’t always true as manufacturers produce panels differently to each other.
As the size of panels to be used is determined mainly by installation size, there’s no reason why a smaller warehouse installation can’t use standard residential photovoltaics, as long as they fulfill the desired installation capacity.
Are solar panels a worthwhile investment in the UK?
Many believe that solar panels do not work unless in direct contact with sunlight, making the UK a less than ideal place for their use.
This isn’t the case.
Solar pv panels work best when solar energy is measured at an average of 1000 watts per metre of Earth surface squared (1000w/m2).
Hours during the day when the Earth receives this level of solar energy are called peak sun-hours.
Best served by continual direct contact with optimal solar conditions, a commercial solar pv system will still generate electricity outside of peak sun-hours, albeit at a reduced efficiency — but cloud coverage can affect output significantly:
- Mild coverage ≈ 85 percent output
- Moderate coverage ≈ 50 percent output
- Heavy coverage ≈ 0 percent output
This brilliant mini investigation shows how different weather conditions affect solar panel output.
The UK daily peak sun-hours average is 4.5.
Based on this, the general consensus is that SMEs can consider installing solar pv panels on their warehouse roofs, despite typical UK weather conditions.
Energy bill and breaking even on your investment
The primary benefit of a solar PV panel installation for an SME, the reduction in your energy bill and carbon emissions will depend on how much of your energy you generate with solar panels.
The UK average electricity bills for small and medium-sized businesses across all sectors clock in at £1,900 – £2,900 and £3,300 – £5000 respectively.
The most common commercial solar panel setup is a 3.5kWh installation, which in prime conditions has roughly a 3000kWh annual capacity.
Now take a small business with an annual electricity bill of £2500. That’s roughly 17360kWh of electricity consumed each year.
A standard 3.5kWh installation on their warehouse could reduce this business’ energy bill by around 15 percent.
You’ll only begin to fully reap the financial benefits of a solar panel installation once you’ve made back what it cost.
Using a 300-watt average, a standard 3.5kWh installation with an average cost of £5100 which reduces the annual energy bill by 15% (£375) would be repaid in around 14 years.
Government initiative: Smart Export Guarantee (SEG)
SEG has small-scale commercial solar PV system users who export their excess electricity to the national grid. By law, large energy supply companies must offer a per kilowatt-hour rate to small-scale producers to do this.
The commercial energy companies set their own rates, the average being 4.5p – 5.5p/kWh, but you as the electricity producer have freedom of choice over which company to go with.
Anyone who’s photovoltaic solar panel system meets the following requirements can apply:
- Your installation’s capacity is no greater than 5MW
- Your solar panels were installed under the Microgeneration Certification Scheme
SEG doesn’t pay towards installation costs, but it does give commercial solar panel users the opportunity to break even on their investment in less time, modest profits from electricity leftovers, as well as supply others with renewable energy.
Here’s a list of some of the best rates currently available.
Low Maintenance
Solar pv panels require little maintenance to run smoothly. A yearly service is recommended with an average cost of £100. Even with this deducted from the example £375 annual energy bill saving, that’s still a financial surplus.
On the flipside, generating electricity from sunlight doesn’t come without its challenges.
Expensive Upfront Costs
We saw above an average cost of £5100 for a standard 3.5kWh installation. Considering the median profit of a manufacturing SME is £20,000, That’s a hefty investment.
Due to their small turnovers, when considering an installation SMEs should calculate carefully whether solar panels will provide financial return.
Reliability
Daily peak sun-hours usually average an annual high of 6.8 in July, making the UK summer an efficient period for solar panels — especially throughout the eastern and southern regions.
The winter months, however, are considerably unfavourable. Daily peak sun-hours can drop to as little as 1.5.
With such little sunlight, an installation will generate little output.
During this period, regardless of a solar panel installation, it’s almost guaranteed that an SME’s energy needs can only be met with the help of the national grid.
Energy bills and carbon emissions will subsequently increase for these months.
Battery storage
If your installation is to help power an operation outside of daylight hours, then a battery storage unit will be another necessary upfront cost.
A battery maximises the system’s potential by allowing generated electricity to be stored for later use. This further reduces dependence on the national grid as well as carbon emissions.
For small to medium installations, battery storage units typically cost anywhere between £1,500 – £7,000 and most models have a lifespan of five to ten years.
The average solar panel lifespan, however, is 25 years, so expect to replace the battery storage unit at least once.
Check out this fantastic comparison of battery storage options and costs.
How much will solar panels cost for my warehouse?
The cost of fitting your warehouse roof with solar panels is determined by several factors:
- Available surface area of the roof
- Size of the solar panels to be used
- Amount of energy you want to produce (restricted by roof surface area)
- Cost of each solar panel
- Installation fee
- Any necessary building modifications and/or planning permission
Based on all of these factors it’s impossible to give a one price fits all.
Let’s look at other cost estimations for different size systems using panels with differing numbers of cells and power outputs.
| Desired system capacity | Panel capacity | Cells per panel | Nº Panels | Installation capacity | Minimum warehouse roof space | Median cost per kW installed (2020) | Total cost without battery (estimation) | Total cost with battery (estimation) |
|---|---|---|---|---|---|---|---|---|
| 6,000kWh | 280w | 60 | 22 | 6.16kW | 33m2 | £1,500 | £9,000 | £12,000 |
| 10,000kWh | 350w | 72 | 29 | 10.15kW | 55m2 | £1,600 | £16,000 | £21,000 |
| 25,000kWh | 400w | 96 | 63 | 25.2kW | 101m2 | £1,000 | £25,000 | £32,000 |
Next steps
If you’re ready to get the ball rolling with installing solar panels on your warehouse, here are the next steps to take:
- Contact your local authority to ensure planning permission isn’t needed
- Calculate your current energy consumption from your bills
- Decide which size installation you want using your energy bills and available suitable warehouse roof area for reference
- If you plan on signing up to SEG, get a smart meter. Smart meters are currently being rolled out to the nation by the government through energy supply companies. Contact your energy supply company to inquire about one
- Get an installation cost estimate
- Find an installation company in your area to discuss solar panel options and costs (Ensure companies are MCS certified if signing up to SEG)
- Decide on a company and a solar panel system
If you still have questions about solar panel installations, have a read of the following articles. They’ll give you an even deeper understanding of the financial implications of using them on your warehouse, and within your business in general:
Further reading:
- Sustainable lighting systems for your SME: EGG Lighting
Extra useful info:
- Government advice on how to reduce your SME’s energy bill
- Recycling solar panels
Sources:
- https://www.gov.uk/government/collections/final-uk-greenhouse-gas-emissions-national-statistics
- Average electricity bills: https://smarterbusiness.co.uk/blogs/what-is-the-average-business-energy-consumption-in-the-uk/
- Average SME profit: https://www.statista.com/statistics/291409/small-and-medium-enterprises-sme-median-average-profit-in-the-uk-by-sector/
- Cloud coverage: https://blog.voltaicsystems.com/solar-performance-clouds-rain/
