Chris Sadler, CEO and founder of Kimble Solar says all new builds should include solar.
Tackling climate change and becoming a zero-carbon society are thankfully becoming more important to everyone. While residential housing has strict standards to meet, like the new Future Homes Standard ensuring properties are affordable to run and zero carbon ready, it's confusing why in 2024 we aren't focusing more on making large commercial properties sustainable too.
If you just take a look at the office buildings, warehouses, restaurants, and shopping centres in your local area. If the developers of these properties had adopted solar power early on, the cost savings and renewable energy benefits would be significant – and that's just in one town!
Even though installing solar panels requires an upfront cost, the payback period is relatively short and can be as little as 3 years. Given that a new commercial property system typically has a lifespan of at least 30 years, the owner can enjoy significant energy bill savings for the remaining 27 years on average.
Installing solar panels in all future commercial builds offers many benefits for both developers and tenants. Commercial developers who choose to lease their properties rather than sell stand to gain substantial benefits from solar installations, but it can be cost effective for all options:
Tenants paying the bills
When tenants pay their own utility bills, solar panels can make the property more attractive. Tenants will have lower energy costs, which can be a major selling point in a competitive market. This can lead to higher occupancy rates and the ability to charge higher rents due to the reduced operational costs for tenants.
Landlords paying the bills
In situations where landlords pay the utility bills and charge tenants later, solar panels still offer significant advantages. Landlords can benefit from reduced energy costs and, in turn, offer competitive utility rates to tenants. This creates a win-win situation where the landlord sees a consistent return on investment through energy savings and export payments (typically 15p/kWh as of July 2024), and tenants enjoy lower energy bills compared to non-solar buildings.
Landlords looking to sell their commercial property
For developers not planning to keep a property for 30 or more years, assessing the profitability of installing solar panels for resale purposes is essential. Solar panels can significantly increase a commercial property's value by enhancing EPC ratings, being environmentally friendly, and attracting businesses that prioritise sustainability.
Battery storage also has its place for the future - the nation cannot achieve Net-Zero without the ability to store renewable energy and therefore requires a network of virtual power plants (VPP). However, the current economics of commercial battery storage systems often result in longer payback periods depending on the type of business served, making it less attractive for developers to include initially. Nonetheless, new commercial properties should be designed to be VPP-ready, ensuring that adequate space and infrastructure are in place for battery storage to be retrofitted in the near future.
Government support for solar adoption from commercial developers
The government should continue offering schemes or grants that provide large financial incentives to commercial developers to help offset the upfront costs and improve the return on investment. Streamlining the process for accessing these grants would make it easier for businesses to understand and use the available resources.
If the government made it a requirement for new commercial developments to include solar panels, similar to The Future Home Standard, it would ensure sustainability becomes standard practice. This approach could drive the industry towards greener practices and help achieve our Net-Zero goal.