This guide provides an introduction for corporate energy buyers interested in onsite solar photovoltaic (PV) power and solar heat generation. It includes an explanation of how solar systems work, the key steps needed to set up a solar project, and information on the commercial considerations corporate buyers should take into account. It also includes a directory of Solar Energy UK members who design, install, finance, and manage onsite solar projects.

The guide answers common questions that explain why commercial solar systems are experiencing record growth in the UK. This should not be surprising: solar power is low-risk and high-benefit, and can come at zero cost. Installing a solar system is therefore a powerful way for a business to improve its financial and sustainability position at the same time.

Solar Energy UK’s advice for companies considering installing solar power is to read this guide and then contact one of the Solar Energy UK member companies in the directory included. They will provide you with clear advice on how to proceed with your solar power project.

To access the press release, click here.

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Why are batteries important?

Solar power is variable: although a solar system does not require direct sunlight, the amount of electricity it produces will depend on the time of day, and the weather. This means that sometimes a home solar system will produce more power than is being used at the time – for example, if no one is at home during the middle of the day.

Without a battery, the potential of this power may not be fully realised. With a battery, any excess power produced during the day can be stored. This electricity can then be used at another time, when demand is higher. Demand typically peaks in the evening, when people switch on appliances, cook, and plug electric vehicles and other devices into their chargers.

Batteries can therefore make financial and environmental sense for homeowners. With a rooftop solar system and a home battery, as much power produced onsite is used as possible. This reduces the amount which needs to be paid in bills, because less electricity is drawn from the grid. Because some of the power on the grid is generated by burning fossil fuels, batteries also help reduce carbon emissions, which cause climate change.

New electricity tariffs also mean that homeowners can sell power they have produced and stored in a battery back to the grid automatically. The price of electricity varies throughout the day, so this means that if they are not using it, homeowners can store power during the day – when electricity tends to be cheap – and sell it during the evening, when electricity is more expensive.

Batteries can also support the wider electricity system. The combined potential of millions of homes with batteries to help balance supply and demand across the country – releasing stored power onto the grid when it is needed – is an exciting hdevelopment in the energy industry. Solar Energy UK estimates that if the UK had 4.4 million smart solar Homes (with solar panels on the roof, a battery, and intellgent controls to manage the system) this could help eliminate the winter evening peak in electricity demand, and help ensure the stability of the electricity network.

Who can install a home battery?

Anyone with a home can potentially install a battery system. Use the Microgeneration Certification Scheme’s Find an installer tool to locate an installer in your area. They will be able to help you identify whether a home battery is suitable for your needs, and the best type of system for your house. Many solar companies now provide solar and battery systems as a package, so this is an option worth considering if you are thinking about installing a solar PV system.

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A Power Purchase Agreement (PPA) refers to a contractual agreement between two parties, typically a power producer and a customer.

The producer usually arranges the design, gains the necessary permissions and manages the installation of a solar PV system on the customer’s property at little to no cost. Whilst under contract, the customer receives a significantly reduced electricity tariff, offsetting the costs from their utility provider, whilst the developer receives income from the sale of the generated electricity.

The PPA characterises the nature of said agreement, such as negotiated prices and the amount of electricity to be supplied. PPA contracts can vary and each contract is adapted to the requirements of both parties. PPA’s are usually longer-term contracts in the range of 10-25 years. Whilst under contract, the developer remains responsible for the operations and maintenance of the system. When the contracts come to an end the customer can choose to remove the system, extend the PPA or purchase the energy system.

How do on-site PPAs with solar PV work?

On-site solar PV generation can take the form of either a large-scale rooftop installation on a commercial or industrial (C&I) site, or a ground-mount installation on adjacent land.

It is also possible for C&I energy consumers to contract directly with a nearby renewable generator via a private wire arrangement, but these arrangements are more complex and remain relatively rare. By their very nature, on-site PPA structures are location and situation specific.

To be successful, most on-site PPAs with solar PVshould meet the following requirements:

• The consumer’s electricity demand profile must be sufficiently large, consistent, and time-matched for the solar PV generated electricity to be well suited to meeting it – for example, a cold storage facility with stable round-the clock demand, or a manufacturing plant with its highest demand during daylight hours.
• A suitable physical location (whether ground-mounted or roof-mounted) must be available to host the site on-site or near site. As a rule of thumb, at least 1 square meter of roof space would be required per kW of solar PV capacity, but this will vary considerably depending on the shape and configuration of the roof (angled or flat) and whether it is obstructed by ventilation units or similar. A large-scale ground-mount PV installation will require at least 1.6 hectares (4 acres) per MW.
• Any on-site electricity generation development of 1 MW or more, whether rooftop or ground-mounted, will almost certainly require planning permission from the relevant local authority in England.
• An affordable connection to the local distribution grid must available.
• The consumer must be deemed sufficiently credit-worthy to facilitate the financing of the generator’s assets.

Benefits of PPA’s

PPA’s can produce significant benefits for both parties, including:

Immediate Reduction in Energy Costs: On-site PPAs enable large electricity users to benefit from buying their electricity from a renewable electricity source onsite or near-site, and to avoid both wholesale price volatility and many of the “non-commodity” costs associated with buying electricity through the grid. Solar PPA’s provide a fixed cost for electricity for the duration of the contract and the solar PV asset owner has a guaranteed customer over the long term.

No Capital investments: The energy consumer does not have to pay up-front for the cost of developing the generator themselves. This means that the customer is able to benefit from cost saving from day one of the contract and continue to benefit for the duration of the agreement.

Limited Risk: Under a PPA, customers can benefit from greener energy and implement more sustainable business practices with very little risk. The developers are responsible for the maintenance of the solar panels, so the customer does not have to worry about equipment failure.

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Updated on 4 October 2024

The Smart Export Guarantee is the new way to get paid for your power. If you have a solar PV system, and generate more power than you need, the surplus will be put onto the grid. Under the Smart Export Guarantee, electricity suppliers offer payment for each unit of power you export to the grid. 

Our league table reveals which suppliers are offering the best rates. Note that the best rate may not always mean the best energy package. Solar Energy UK recommends shopping around for the best deal. 

We update our Smart Export Guarantee league table frequently, but if you spot an error, please let us know.

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