The market for solar photovoltaic systems is growing rapidly. A greater understanding of the need to invest in renewables is coupled with the energy crisis, which has heightened financial drivers for cheaper energy.
And now, the removal of barriers to installing solar PV systems will kick-start even more rapid growth, said Michael Norton, Pinergy Solar Electric head of commercial sales.
“Solar in residential properties has been a stable market for years, but there have been barriers holding back adoption in the commercial market,” he said. “Now, many of those barriers have been removed. So we expect the commercial solar market to grow rapidly.”
The first barrier that has been removed is the need for planning permission. In 2022, the Irish government removed the need for planning permission to put solar panels on roofs. This made it much easier for companies and homeowners to install solar panels.
A second impactful change was the introduction of the option to sell excess power back to a provider. This provides a revenue stream that means the cost of installing a system can be retrieved far more quickly.
“This means that if a business is closed at the weekend, it can still benefit from a solar PV system that is generating electricity during that time,” Norton said. “This energy isn’t lost; they can now sell it back to their provider. This policy means that solar is now applicable for every type of business; all you need is a roof to gain a revenue stream.”
The solar PV market in Ireland is still young, Norton said. Pinergy still considers its solar clients early adopters, particularly in the commercial space. But the recent policy changes have sparked four trends that will characterise the solar PV market for the coming months.
The Growth Of ESG
As calls for businesses to prioritise environmental, social and governance measures grow, more are turning to solar PV, Norton said. Now that planning laws have changed, solar can be an easy win for a business. While improving its environmental credentials, a solar PV system can also reduce energy costs.
Pinergy is experiencing increasing demand from commercial clients. Solar is still a young market in Ireland — Pinergy estimated that only 1% of commercial property roofs in Ireland have solar PV systems, Norton said.
The Irish government has been clear in its support of the growth in renewables. As well as the removal of planning requirements, the government is also introducing grants to install systems for businesses, public organisations and community groups.
Power Purchase Agreements
A power purchase agreement is when a company buys the power from a solar PV system instead of purchasing it outright. A provider installs the system at no cost, then sells the energy to the business. Currently, about 10%-20% of Pinergy’s clients opt for a power purchase agreement, but Norton said he expects that number to grow.
“Family-owned businesses with cash reserves are likely to buy the system outright and benefit from the maximum return of their investment,” he said. “Larger corporations or multinationals might be acquiring a much larger system and prefer to keep this off the balance sheet. They benefit from reduced opex to do reduced energy costs, without the capex which they can instead use for their core business operations.”
Businesses are looking beyond their roofs to make the most of solar PV systems. Increasingly, businesses with land are looking around the outside of their buildings, Norton said.
“Although a business will still need planning permission to install panels on land, this can provide an opportunity for increased savings or revenue,” he said. “This is particularly the case now that excess energy can be sold back to a provider.”
Operation And Maintenance
As more businesses install solar PV systems, the market to maintain them is picking up significantly, Norton said. A system tends to have a lifetime of 25 years and although they are low maintenance, some maintenance is required to ensure they continue to work properly. It’s a service that Pinergy is starting to offer clients.
“Now that some businesses have had a system for a few years, they are seeing the benefits of cleaning and maintaining it,” he said. “They need to make sure that it’s producing what it needs to, physically washing the panels and checking parts. This is a specialised service, but one that a property management company could consider in the future.”
This article was produced in collaboration between Pinergy and Studio B. Bisnow news staff was not involved in the production of this content.