Renewable energy has revolutionised the energy market, making it possible for individuals, businesses and communities to become more sustainable by generating their own electricity, while also providing a decent return on investment (ROI). Large businesses have for some time been adopting sustainable practices and using renewable energy to cut costs, but smaller businesses face their own set of challenges in becoming more sustainable. With ever-tightening budgets, finding the spare capital to invest in energy-saving or generating technology is no easy feat. However, renewable energy can provide a unique opportunity for GP surgeries to benefit from free electricity and cheaper bills, a reduced carbon footprint and (if applicable) finance from the generation of electricity.
There are a variety of domestic or small-scale renewable energy installations on the market, ranging from solar photo-voltaics and solar thermal to ground and air source heat pumps, biomass boilers and small scale wind turbines. Prices vary, and depend on the technology being installed and the size of the system.
The introduction of feed-in tariffs (FITs) in 2010 triggered a rapid increase in the use of renewable technologies in our everyday lives. The FITs meant that installing renewable technologies was not just a viable investment for electricity suppliers and developers, but also for communities, small businesses and even individuals. The uptake was such that just a year later the Department of Energy and Climate Change were forced to reduce the FIT rates to avoid the scheme becoming financially unsustainable.
However, the FITs also triggered an increase in production of renewable technologies, meaning the cost of systems and installation has steadily decreased, most notably in the case of solar photovoltaics. Combined with the appearance of more and more trained installers, access to the renewable energy market has never been easier.
The government has now introduced the Renewable Heat Incentive (RHI), to encourage the uptake of renewable heat technologies. In a similar way the FITs, the RHI provides financial incentives for householders, businesses and communities to produce their own heat.
Despite this, there are still barriers to installing renewable energy, not least that most systems still require thousands of pounds of capital. Gaining planning permissions and the buy-in of management and the local community can also be obstacles.
Getting a project started
The type of renewable technology you choose very much depends on the location and the fabric of your building and the buildings surrounding you. Factors such as roof pitch, wind speed, whether you’re in an area of outstanding natural beauty, a conservation area or occupy a listed building can all play a part, depending on what you want to have installed. A good installer should provide some guidance on what you need to consider.
Before making any decisions about installation, consider your energy use carefully. Go through a process of reducing your energy use before thinking about generating your own. Make sure you’re on the right energy tariff and if you haven’t switched for a few years then you certainly need to consider doing so. If you don’t do so already, start recording your meter readings monthly. Look into more energy-efficient equipment and do an audit of the building to find out when and where you’re using most of your energy.
Once you have done this, you should have a better idea of which renewable technology is most appropriate for you.
It is important to gather quotes from different installers and even ask other similar businesses or buildings who have had a renewable installation about their experience.
Good installers should always provide you with a quote free-of-charge, and should also not be ‘hard selling’ to you. It is your choice who you go with, and indeed whether renewable energy is right for you at all. They should also provide you with an expected ROI, and if relevant, advice about applying for the feed-in tariff.
For businesses, the decision to install renewable technologies can depend on several different aspects of their working practices. For example, a business which is mainly used in the evening would not benefit hugely from the free electricity aspect of installing solar panels, as they will usually not be in the building in the daytime, when the panels are generating electricity.
Whether you need planning permission depends very much on your building and location. For example, if your surgery is in a listed building then you may well need planning permission. If you decide to put up a wind turbine, then you will certainly need planning permission. Ground and air source heat pumps do not always need planning permission, but again if you are planning to install on a listed building, then you will likely need planning permission. The best way to find out is to consult your local planning department about your plans. Installing renewable technologies without consulting the planning department could end up being very costly.
Funding and capital from other sources
The best option for financing renewable energy installations is almost always to use your own capital to pay for them. This means you will be making of most of both the free energy and financial rewards.
Grant funding for renewable energy was reduced significantly at the introduction of the FITs and RHI. If you are still able to access public grant funding for your project, then this often means you will be disqualified from receiving any FIT or RHI payments. However, if you do not wish to make the initial outlay, there are other options, although they usually restrict the later financial returns.
The flagship government Green Deal offers loans for you to make energy saving improvements to your business premises, and this includes some renewable technologies. The loans are repaid through your energy bill, and repayments should never be more than the savings you are making from the technologies. (See Resources).
Innovative local solutions to raise capital have also been developed, including community share issues and employee share issues to pay for the technologies. Cornish sustainable energy charity Community Energy Plus have developed Community Power Cornwall, an economic model to help Cornish communities own and benefit from the development of renewable energy. The charity has also developed Solar Communities, a scheme which matched businesses and community buildings across Cornwall and Devon with investors and installers to provide them with free solar panels. The project meant that the businesses and communities were able to reduce their carbon footprint and benefit from free electricity, while the investors claim the FITs to repay their investment.
Potential savings and ROI
Savings from generating energy are made through a combination of a generation tariff and export tariff payment which are combined with the savings you offset from not importing the usual level of energy to your building.
Return on investment is dependent on both technology choice and scale of the installation. The government has aimed for a 5-8% ROI through the FIT but this may often be exceeded on a good site with plenty of natural resource available. Your installation company should provide you with a predicted ROI with any quote they produce for an installation.
Maintenance and upkeep costs
Most renewable technologies require little maintenance. You will need to ensure that solar panels and solar thermal units don’t become overshadowed with trees and that they are kept clean. Most panels are self-cleaning, with the only issue sometimes being bird mess, particularly prevalent at coastal locations. A window cleaner will be able to deal with this.
Case Study: St Agnes GP surgery
In March 2012 St Agnes GP Surgery in Cornwall had a 10kW solar array installed through the Community Energy Plus Solar Communities project.
Having always been proactive about managing their energy, the surgery saw the scheme as a chance to improve their environmental credentials and reduce costs by installing solar panels. The surgery did not need planning permission to install the panels, and a local company installed the panels in just two days.
Liz Thierens, practice manager at St Agnes Surgery, said: “Solar Communities was great because the solar panels were installed at no cost and we’re seeing the financial and environmental benefits of them. We’ve just received an electricity bill for the first time since the panels have been installed and it was much lower than usual, which is brilliant. Local residents have also said they think it’s fantastic that the surgery is sending out a positive message to the community about being environmentally aware.”
While renewable energy is not suitable for every building and every circumstance, most businesses cannot afford to ignore the opportunities it presents for much longer. With energy bills rapidly increasing, energy efficiency and renewable energy technology allows surgeries to continue ‘business as usual’, but with less money paid out on energy bills.
Community Energy Plus
Advice about installing renewable technologies
Neil Farrington is the sustainable energy projects manager at Community Energy Plus, an organisation that develops community energy schemes.