Change is coming for commercial property owners and occupiers, as businesses become more independent, generating their own energy through renewable technologies such as rooftop solar.
It has never been easier to generate power with new low-cost PV (photovoltaic) installations. 2017 was a big year for clean energy generation in the UK, with low carbon sources making up 52% of the energy mix in summer (National Grid). We are beginning to see a more decentralized system, which is changing how the commercial property sector uses energy.
We’re often told that battery storage will be a vital component of this transformation. That’s because it’s true.
Whilst Solar Panels generate a sustainable source of energy for a commercial property, building occupiers don’t benefit fully from it, because they need less during the day than the panels generate, leading to ‘spill’ back to the grid. Of course, with batteries this energy can be stored and used when the sun goes down. Solar panels coupled with battery storage help Commercial Property owners and occupiers have more control of their own energy generation and storage.
According to Mckinsey & Company, since 2010 battery costs have dropped by 75%. The dramatic fall in costs is making battery storage projects far more profitable and create a real business opportunity.
The integration of batteries with existing self-generation will radically change how energy is managed and used. A combined solar and battery storage system allows for the energy to be managed intelligently, you can avoid charges related to transmission and distribution at peak times, saving you money. Additionally, batteries can provide grid services, helping balance the network, which the grid will pay for, providing another revenue stream.
In some cases where solar PV and battery systems have been combined, the savings along with additional income from grid services create an ‘Energy Cost Neutral building’ (ECN).
Recently the IM Properties Hub 69 building in Birmingham, an ECN, was let to Argos. The super low energy costs of occupation were used in the marketing of the building and were likely a major incentive for Argos. Battery storage and self generation of energy are becoming selling points.
Having batteries may well become an occupier requirement in the near future, allowing them to avoid high charges for using energy at peak periods, which look set to become more expensive due to investment in the National Grid to support the increase in renewables and decentralisation of energy generation.
For Landlords, the value proposition of self-generation and batteries is simple, they can offer lower or even neutral running costs, it’s a great way to attract and keep occupiers as well as future-proofing themselves against an ever changing energy landscape.