Solar PV systems for commercial rooftops
Guest insight: Nicky Wightman of Savills shares the questions she sees commercial real estate clients consider when evaluating solar PV.
A solar PV system is a well-established method of reaping benefit from your businesses’ least used asset; the roof. Solar is now a mainstream and reliable technology – which should be easy to buy and easy to own. And increasingly our clients are seeking professional advice on how to capitalise on the solar opportunity across their international property portfolio.
Below, I answer some of the questions that I’ve seen our clients wrestle with when embarking on a solar roof programme.
Am I going to get value for money? While cost is always going to be a big factor, going with the cheapest option can leave you with problems further down the line. When choosing a provider you need to find out how long they’ve been around for, are they considered established, do they have sufficient credit rating, or will they go bust the next day leaving you with a mess on your roof and no effective warranty cover? Ask the provider about who they have worked with recently, do you recognise the brand names? Big brands from Body Shop to Bentley have chosen solar pv in the last few years and these businesses don’t hand over access to their roofs to any old provider, neither should you!
In terms of value, the quality of system design and installation are arguably more important than the upfront cost. A poorly designed or poorly executed system may not give you the yield you require. So what kind of similar projects has the contractor completed in terms of size, complexity and roof type?
Is the system going to damage the roof and will it take the weight? The contractor should have agreed methods of roof penetration with the roofing manufacturer and have experience of working with your specific type of roof. PV has successfully been constructed on warehouses, factory buildings and retail space, including some extremely light weight membrane roof structures. That’s not to say it’s an area to be blasé about. But there are now structural engineers who are highly experienced at assessing PV not just for its load-bearing effect, but also for uplift which is highly specific to location. And solutions have been designed without any strengthening required. For new build, it’s more efficient to consider the structurals during the design phase as strengthening can be added at the time of construction if needed.
What assurances are there that the system will work? Once you know your chosen provider is ‘bankable’, you’ll want to know that once the installers have finished and gone home that you need not worry about your roof. Most providers will give some form of warranty for the system, the longer the better, and you can also have a warranty for the performance of the system, leaving no ambiguity between you and the provider. It’s best to take out an operations and maintenance (O&M) contract so you know whether the system is doing what was agreed and that in the event that something does go wrong, someone will come out to get the problem sorted in a timely basis.
What options are there for financing the project? When it comes to financing your solar pv system you have options. You can pay for it upfront, you can take out a purpose-designed finance agreement or if you want no capital outlay you can lease the roof to a third party who will pay the upfront cost of the system and then negotiate a price for the energy generated with you. These can be complex agreements but the best providers will have experience of such deals and create a smooth process for you. And most importantly, the best provider will give you all the options and come with a range of funders; it’s important they don’t have an incentive to push you down one route or another.
What form of contract should we use? Once you are happy that the potential provider will do the job to a high standard you will need to agree a contract and a time frame. For larger rooftop installations (ie, more than 3,500 square meters), engineering, procurement and construction (EPC) contracts are typically used to cover construction with a separate O&M agreement for maintenance. Or if you are leasing your roof, you will need to agree a roof lease and a Power Purchase Agreement (PPA) for buying back the electricity that’s generated. For smaller systems, we’ve seen a broader variety of contract including JCT and the contractor’s own terms.
Solar PV is famous for being low maintenance and remarkably reliable. However, problems can occur particularly with inverters. Where it’s cost effective, the O&M contract should therefore include monitoring by the provider so that they can see when the system goes down and perform diagnostic tests remotely. And, as you might expect, there should be acceptable SLAs for call out and repair.
What level of disruption should we expect? Installation time can vary depending on a number of factors including; the time of year and weather conditions, access to the roof, availability of modules and other materials. Agreeing a time line upfront will give you a clear idea of when you can start harnessing the solar energy. Is there going to be any disruption to your business operation? There doesn’t have to be, but it needs to be clear to the provider what your parameters are and what disruption you can tolerate, if any. This will then influence the way the contractor builds your system, particularly the access design.
PV is a long-term investment and should only be considered for roofs that are going to be in place for a minimum of 20 years which is typically the term for incentives. However, you can expect the system to carry on working for a further 20 years at least.
There are major benefits to any business that chooses to have solar pv on their roof, cheap energy bills and price certainty, all leading to a direct effect on your bottom line, not to mention the major impact on your carbon emissions.
Nicky Wightman is from Savills Earth and Innovation