News • 28/09/2023 • 4-min read
Solar PV: The hot topic in Real Estate
In the pursuit of expanding the UK’s renewable energy capacity, commercial and industrial rooftop solar photovoltaic (PV) projects emerge as a remarkably efficient solution.
Rooftop solar PVs offer a streamlined pathway to sustainable energy, in contrast to ground-mounted systems and wind farms which could face obstruction due to planning delays, local opposition and discussions of land use. Illustrating the potential of this alternative, construction analysts Barbour ABI found that existing warehouse roof space is over 165 million m2, the equivalent of 30,834 football pitches, with a potential solar capacity of around 25GWp (Global Warming Potential). A transformative discovery when considering the UK’s cumulative installed capacity hit 14.3 GW by the end of 2022.
Our clients face a number of challenges which solar PV can help to address. There are volatile energy prices, MEES regulation compliance, increasing occupier demand for clean, renewable energy and also the need to meet their corporate sustainability commitments.
“Many of our clients are surprised by the results of our desktop solar PV feasibility studies,” says Stephen Skalecki, from MAPP’s Climate Ready service. “Our clients are seeing a ROI for solar PV installations typically within the range of 7 to 10 years. When we lay out the Power Purchase Agreement (PPA) and rentalisation options and the cash flow over 25 years, solar PV is a much better investment from a purely economic perspective than clients anticipate. Coupled with the benefit of generating on-site, renewable energy for their asset and occupiers and the reduced exposure to grid fluctuations, it becomes a very attractive proposition”.
The research
A recent analysis conducted by Oil Change International reveals that a mere 20 countries will be responsible for nearly 90% of carbon dioxide pollution, in part due to upcoming oil and gas extraction projects spanning from 2023 to 2050. This arrives at a time when the impacts of climate change are being felt across the world. In a departure from their typically reserved and diplomatic tone, the UN explicitly acknowledged the need to phase out fossil fuels for the very first time in their 2023 Global Stocktake report.
In the report, the UN stated, “Achieving net zero CO2 and greenhouse gas emissions requires systems transformations across all sectors and contexts, including scaling up renewable energy while phasing out all unabated fossil fuels, ending deforestation, reducing non-CO2 emissions and implementing both supply and demand side measures.”
Concurrently, the UK Government has set a target to decarbonise the whole energy system by 2050 and the electricity system by 2035. In the midst of these changes, we see the demand for electricity continue to increase. National Grid estimates that electricity consumption in the UK will increase by approximately 50% by 2036 and more than double by 2050, with more people moving towards electric vehicles and heating systems.
Evolving UK Energy Landscape
The government has targeted an increase in solar capacity by nearly fivefold, to 70GW by 2035, as part of wider plans to power up Britain with cleaner, more affordable and more secure energy sources. But with the UK public sector investing in new fossil fuel projects whilst struggling to deliver renewable projects at scale, it is hard to see how the decarbonisation targets can be met. According to Ofgem, as many as a quarter of applications for grid connections approved in the last year have been offered dates of 2030 or beyond. This means that many construction-ready projects are being significantly delayed due to the current system’s bureaucracy and complexity. Could the solution lie in the Real Estate sector?
