Solar power

Definition: Solar power is energy harnessed from the sun's rays. It is a renewable energy source, meaning it is a cleaner, more sustainable alternative to burning fossil fuels. Solar power produces no greenhouse gas emissions during operation, consumes no water, and uses relatively little land space.

Large-scale solar generation can either use the sun’s heat or light to create energy. Some solar systems use heat, while others transform light energy into electricity. Most generators use solar cells or photovoltaics, but solar water heating and solar furnaces can also be utilised. Solar cells are the most common form of solar energy and can be organised as offsite solar farms or placed into business operations or on households as small-scale arrays, usually on roofs.

How does solar power work?

Solar power is commonly generated from cells that are small in size, but are often used in larger units called solar modules. These modules can also be coupled into bigger units known as solar panels.

Certain materials exhibit properties that allow them to absorb light photons from the sun and release electrons. Once captured, the electrons can form an electric current to be used as electricity. Silicon is the most popular semi-conductor for solar cells, and is capable of freeing up electrons from the absorbed sunlight.

The internal organisation of silicon atoms mean that the electrons are effectively funnelled into a directional flow, as different atoms become positively or negatively charged. This creates an electrical field across the cell. As a semi-conductor, the silicon can maintain this balance, allowing the atoms to build up an electric charge which is transferred to power equipment.

Solar can also be used to conserve gas and electricity to heat water, although this is usually a domestic application. Solar is used to heat water in glass panels located on a roof, which is pumped to the panels via pipes. This helps the cut energy bills on energy that would otherwise be used on a central heating system.

What is the market size for solar power?

The amount of solar power added worldwide soared by 50% in 2016, as countries added more than 76GW in capacity. Globally there is now 305GW of solar power capacity, a huge increase on the 50GW capacity at the beginning of the decade.

The UK is considered a leader for the European solar market, accounting for 29% of installed capacity in 2016 alone, followed by Germany with 21% and France at 8.3%. However, a turbulent policy environment meant that the UK added just half of the solar capacity of 2015 levels.

In total, solar capacity has reached 10GW across the UK. And, for six months of the year, the 6,964 gigawatt hours (GWh) generated by solar - 5.4% of the UK’s electricity demand – outperformed the 6,342GWh generated by coal.

 

What are the business benefits of installing solar power?

Solar power benefits from a rapidly shrinking capital expenditure. 2016 marked the first time that the new solar capacity added has been greater than any other electricity-producing technology, because of favourable economic outputs.

Provided that businesses can overcome the capital hurdle, they should consider whether ground-mounted or roof panels are desirable. as a general guide, one square metre of solar panel equates to 150W of power, so businesses should ensure they have adequate space beforehand.

If solar generation does prove worthwhile, the benefits will vary. As well as lowering carbon emissions, businesses can cut down on purchasing costs for electricity, and the growing popularity of energy storage creates scope for businesses to generate income by sending surplus renewable energy back to the grid or storing for later use.

Solar panels don’t require much maintenance once installed, making them a popular choice for all types of businesses. However, panels should be kept clean, otherwise efficiency levels could fall by 30%. Businesses must also consider that solar power is intermittent, meaning that it won’t produce at night, while yields drop on cloudy days.

What are the costs of installing solar power?

Solar costs have fallen by more than 80% in less than decade, making the technology the world’s cheapest form of renewable energy.

For a small commercial 5-9kW system, upfront costs range between £8,000-£14,500 while a larger 50kW system costs around £70,000. If self-funding, expect around a 10-year payback on a mid-range system. If financed through a third party Power Purchase Agreement for 10-20 years, a business should expect to see at least a 5% reduction on its energy bill in the first year.

What are the business requirements when installing solar power?

For roof solar, a survey must be conducted and ownership and permission rights need to be established if a business is operating in a multi-occupancy building. Ground solar also requires title searches. While many sites have little issue receiving permitted consent, planning consent can depend on a range of factors, such as if glare from the panels would impact surrounding areas. This a common hurdle near airport runways.

For landowners such as farmers who are seeking to implement solar fields, planning application fees can potentially reach £250,000 and the local authority will have to perform a site visit during assessment.

What is the policy backdrop for solar power?

Government subsidies for solar PV have drastically reduced due to Feed-in Tariff (FITs) rate regression, but can still provide a modest contribution to cost savings. FiTs are paid for every kWh generated.

Certain criteria must be met to be FITs eligible and installers must be Microgeneration Certification Scheme (MCS) registered.

The overhaul of the business rates system in April this year also placed extra pressures on businesses with onsite solar systems. The draft rateable values for 2017 for all properties that pay business rates and owners of solar panels are split into two classes of those who mainly export and those who utilise the energy onsite.

Most solar systems exporting to the grid or via a Power Purchase Agreement to tenants will see a decrease in business rates, reflecting falling costs, and lower rates of subsidy, thanks to an agreement with the Solar Trade Association (STA). However, businesses that use most of the power themselves are faced with a six to eight-fold increase in business rates.

For solar thermal energy, the Government has dropped plans to remove it from the Renewable Heat Incentive scheme and the technology will receive the same level of support (19.74p/kWh) over seven years.

See also: Photovoltaic

See also: Onsite generation

See also: Renewable energy

More detail

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