In March 2015 Marks and Spencer announced that it had installed 24,272 solar panels on one of its warehouses, projected to generate more than 5,000MWh.
Statistics show that in 2014 solar panels were installed on over 125,000 homes in the UK.
However, Stephanie Gillam, Solicitor and Solar specialist at Ashfords LLP, comments that despite the vast expanse of available commercial rooftops, solar PV rooftop arrays installed on commercial buildings are still rare sights, even though these larger rooftops make it easier to match on-premises generation to on-premises demand.
Commercial rooftops are tipped for significant growth, but how can businesses and investors unlock this potential?
It is commonly considered that the commercial rooftop sector is extremely challenging and therefore couldn't grow with the same speed as the residential rooftop and ground mounted solar industries. Ashfords' Stephanie Gillam asks, does this have to be the case?
- Construction - Before getting started, a surveyor should check that the roof will be able to take the weight of the panels. A lot of commercial roofs are suitable for installation of a solar array without the need for any reinforcement works. The installation of an array will usually further strengthen the roof. If a roof isn't suitable, perhaps an upgrade is already in the capital expenditure budget and just needs to be brought forward?
- Planning - This is normally an easy one. The installation of a solar rooftop array on industrial buildings, warehouses and offices generally falls within permitted development rights and therefore is unlikely to require planning permission, although of course you should always check. If a planning application is required (as permitted development rights do not apply) get the solar PV provider to solve this; they already have lots of experience.
- Financing - Self-finance or power purchase agreement - who will be financing the array? Will the owner of the premises purchase it outright and either use or sell to the grid all of the electricity generated, or will a power purchase agreement be entered into? Lots of questions, but luckily there are lots of solutions. Under a power purchase agreement a developer will finance the installation and equipment and sell the electricity to the occupier, generally at a lower rate than conventional electricity prices.
- Airspace - If you own and occupy, the airspace is yours. If the premises are subject to an occupational lease the right to use the airspace will have either been kept by the landlord or granted to the tenant. A quick read of the lease will tell you which. Co-operation between an occupational tenant and landlord is therefore key, but there should be a bargain to strike. Landlords will also want to keep their development options open and avoid being restricted by the long term deals developers look to secure. However, as PV systems can be moved and airspace is just that, innovative drafting by the lawyers should be able to produce agreements everyone is happy with.
- Access - Access is a practical consideration but in Ashfords' experience there are various solutions . The solar PV provider will need access to the premises and will need to use the land a few metres either side of the premises in order to erect scaffolding and stand an access platform for lifting equipment on to the roof. Access to the exterior of the premises will also be required for the installation of the necessary cables and inverters on the exterior walls of the premises and for connection to the grid. However, installation can be flexible, even done in days, not weeks. Installation, done right, should only have the most minimal impact on operations.
- Ongoing access will be required to the cables, inverts and connection point, but as the equipment is generally low maintenance this will be infrequent except in the case of emergency.
- Damage and repairs - Landlords and tenants will both have strong views here. Tenants will not expect to be responsible for making good any damage arising from the panels. The issues of possible damage and repairs should be addressed. The quality of the warranties provided by installers should be carefully reviewed. Insurance products could also be considered to deal with the risk.
With the Department of Energy and Climate Change confirming that from 2019 commercial users will be allowed to move their FIT payments between premises when they relocate, which will better facilitate financing and allow greater flexibility, there is even more reason to consider solar.
With the right team, utilising commercial roof space could be one of the easier decisions to make in 2015.
For more information, please visit the Ashfords Solar webpage.
This article was written by Ashfords' Solar Team:
Brian Hegarty, Partner, 01392 333830
Jane Ireland, Associate, 020 7544 2484
Stephanie Gillam, Solicitor, 01392 333679