It’s not exactly a plot spoiler! Commercial solar panels are an excellent investment for the majority of UK businesses. They typically offer a payback period of 3 to 8 years and at around 14 to 16%, the ROI rates are impressive too.
Depending on your chosen financing route, your business benefits from decades of free electricity once the system is paid for. If you’re leasing your roof space through a PPA, you’ll XXXXXXXX. Plus, there’s also the tangible benefit of protection from volatile energy prices.
There’s more to it as well, of course! Here’s Joe Michaels, Joju Founder and CEO sharing his thoughts.
Lower cost installations will result in better economics overall. We’ve written about what influences the cost of a PV system in more detail here, but in summary:
The more electricity you generate the better the economics will be.
Using your own generation is more valuable than exporting it, so the percentage of electricity used on site (also called self-consumption) is critical to the economics.
A typical home will use 30% of the electricity they generate directly. However, if you’re at home during the day – be that retired, working from home or childcare – this can go up to 40-50%.
Installing a battery alongside solar can increase this to 70% – see below for how batteries affect the economics of a solar array.
The percentage of electricity used at home can also be increased by charging an electric car with chargers like the Zappi, or by diverting electricity into a hot water tank immersion heater.
The higher the price of electricity, the more you will save from a solar PV array. We’ve seen the economics of solar improve massively over the course of the energy crisis.
Inflation will increase the price of electricity over time, and so increase your savings in future years. If inflation is running high, your savings will go up, and the payback period will come down.
Although less important than bills savings, getting the best price for your exported electricity will help the economics of your investment.
Just like the solar panels, batteries are an additional cost but they offer greater savings over the long-term. And just like solar panels, this trade-off needs to be considered carefully.
A home battery will increase the amount of self-generated electricity you can use on site. As mentioned, it’s financially better to use any self-generated electricity if you possibly can, due to the different prices paid for importing electricity and exporting electricity. A typical home might use 30% of the solar electricity generated. By adding a battery this can increase to around 70%, resulting in additional savings (It’s never 100% as you’ll always be generating more than you can sensibly store in the middle of summer, as we explain here).
So, do these extra benefits outweigh the extra costs? We’ve crunched the numbers and discovered the following:
It’s not all money, of course. Many of our customers just like being as self-sufficient as possible. Why buy electricity from a utility when you can use the electricity generated from your own roof?
The economics of a home battery is also highly dependent on choosing a model that’s the right size for your needs. This is a careful match between the size of your solar generation and the amount of electricity you use in the home. If the battery is too large, it won’t be fully used and you’ll have purchased more battery than you need. If the battery is too small, you won’t maximise the savings that would’ve been possible.
For that reason, we strongly recommend against purchasing ‘kit’ systems, and instead get a battery system bespoke designed to your energy use and lifestyle. Our engineers are experts in designing battery systems to ensure you find the ‘Goldilocks zone’, so why not get a free quotation today?
