Given the recent announcement of proposed revised Feed in Tariffs, David Lancaster explains how ADAS can help food businesses to take advantage of government incentives and generate renewable electricity from their roof areas.
In April 2010, the Government introduced a new incentive to generate renewable energy – the Feed in Tariff, but this is now being reviewed and is out to consultation. It is proposed that a revised tariff from 1 August 2011 will provide a fixed rate of between 8.5 pence and 19 pence on solar developments above 50kW, and 32.9 – 43.3 pence on developments below 50kW. Once installed, these rates are guaranteed for 25 years and are index linked to the retail price index.
Clearly these proposed revised tariffs favour the smaller scale generation under 50kW, but ADAS believe that food businesses continue to have an investment opportunity to take advantage of these new incentives to generate electricity from sub 50kW developments on factory roofs or from the roofs of distribution centres, providing fixed price low carbon electricity for 25 years.
Various business models exist depending on the food company’s attitude to risk and capital availability. Options include direct investment by the company, or simply renting roof space - generating an additional revenue stream and having access to lower cost electricity, with several permutations in-between.
Solar PV has the advantage over other forms of renewable energy in that energy yield is more predictable and planning is generally less of an issue. In addition, Solar PV has the following advantages:
• Low maintenance with no moving parts
• Long life – 25 years plus
• Zero running fuel costs
• Provides a stable long term price
• Quick to install
The specific investment opportunity within Solar PV that will need to be explored on an individual company and site basis will be usable roof area available, including the structure, weight bearing and orientation of the roofs. Also, geographical location with sites located in the South West, South Wales and East Anglia particularly well suited, though all geographical areas can be viable. Energy yield and revenue, budget capital costs, payback and IRR, and carbon savings will all be assessed as part of an initial Investment Appraisal that ADAS can complete.
Also building tenure – landlord/tenant arrangements or change of ownership needs to be considered, as Solar PV is generally a longer term project – typically 25 years plus.
ADAS has teamed up with a renewables energy developer Enfinity, who has significant experience over the last 6 years in Belgium, Holland and Germany in installing roof mounted solar panels, with over 200MW of Solar PV installed to date.
Please give David Lancaster, ADAS Client Manager – Food & Drink a call today on 07831 559327 or email on david.lancaster@adas.co.uk, to discuss the business model options available with Solar PV installation to either fix your energy costs into the future and/or to provide for an additional revenue stream for your business.
* Image copyright of Enfinity UK Ltd