As businesses in high-energy sectors such as coffee roasting, manufacturing, and breweries strive to meet sustainability goals, the challenge of adopting solar power in leased commercial spaces becomes increasingly apparent.
Discover more in our guest blog from Rashi Bhogal.
Why do high-energy industries need clean energy?
High-energy industries urgently need clean energy due to environmental and regulatory pressures, and solar power could greatly benefit these carbon-intensive sectors.
However, a significant barrier to solar power adoption is the disconnect between tenants, who want solar energy, and property owners, who must invest in the infrastructure but lack direct incentives to do so.
This gap in priorities often leads to delays in sustainability upgrades, leaving potential energy savings untapped and hindering broader sustainability goals. As a result, the potential for clean energy adoption in these spaces remains largely unrealised, highlighting the need for targeted policies and incentives to bridge the gap and accelerate the transition to renewable energy.
How does BHESCo promote solar adoption in leased commercial spaces?
At BHESCo, we promote solar power in high-energy commercial properties by linking tenants with property owners.
We support solar installations, advocate for favourable policies, and create innovative financing models to address leasing barriers.
Our goal is to drive clean energy transitions and support sustainability in leased spaces.
What financial disincentives do property owners face?
Many businesses are eager to switch to solar power due to their large roof spaces and the potential for cost savings.
However, since these businesses lease their properties, the responsibility for installing solar systems falls on property owners, who may not see immediate financial benefits.
Without direct incentives, property owners are often unwilling to bear the costs, leaving the potential for solar energy largely unrealised in leased commercial spaces.
How does current legislation like Minimum Energy Efficiency Standards (MEES) impact solar power adoption?
Current legislation, particularly the Minimum Energy Efficiency Standards (MEES), plays a significant role in shaping the energy efficiency landscape for commercial properties, but it has limitations when it comes to incentivising solar energy adoption.
In 2024, all commercial properties in the UK must have a minimum Energy Performance Certificate (EPC) rating of ‘E’ to be legally rented, with future targets set to raise this minimum to ‘C’ by 2027 and ‘B’ by 2030. Non-compliance can result in significant fines, and properties not meeting these standards cannot be legally let.
Introducing solar panels to a property is one of the most effective ways to improve the EPC score, and so could have a big impact on whether a commercial space can be legally let or not. The availability of affordable on-site renewable energy will also make the property more attractive to potential business tenants.
Why targeted policies and incentives are needed
Although MEES has enhanced overall energy efficiency in commercial properties, it does not specifically encourage solar energy adoption.
However, adding solar panels offers the most significant boost to the EPC score, delivering greater benefits than any other measure.
As a result, property owners lack incentives to invest in solar technology, creating barriers Future policies should address this gap by offering specific incentives, such as business rate relief or VAT exemptions on energy bills, to effectively support the transition to clean energy in leased properties.
What upcoming policy changes could impact solar adoption?
As the UK advances its climate goals, upcoming policy changes are expected to address barriers to solar power in commercial properties. These may include stricter energy efficiency standards and requirements for renewable energy installations like solar panels.
The Government might also mandate renewable energy for new leases or major renovations (where appropriate) and offer improved financial incentives for property owners. These changes aim to close legislative gaps, encourage solar projects, and support the UK’s shift to cleaner energy.
How is BHESCo advocating for stronger solar incentives?
At BHESCo, we push for policy changes to increase solar energy adoption in leased commercial properties, particularly for high-energy businesses.
We urge stronger Government action, including targeted policies and greater financial incentives, to close the divide and encourage solar investments.
Why is renewing financial incentives important?
To encourage property owners to invest in solar energy, expired financial incentives like the Feed-in-Tariff must be reviewed and re-introduced.
Property owners may be reluctant to invest without direct benefits. Therefore, adapting these incentives to better support solar investments in leased properties, through enhanced subsidies or tax breaks, is necessary.
How can innovative financing options overcome financial barriers to solar power?
Innovative financing models like Power Purchase Agreements (PPAs) and solar leasing let property owners introduce solar energy with zero upfront costs.
Under a PPA, a third party like BHESCo handles installation and maintenance while the tenant/ energy user buys solar power at a reduced rate.
This means there is no financial risk whatsoever to the energy user, who stands to make significant savings on their long-term energy costs without any cost to themselves.
What role can Demand Side Response and Grid Flexibility Programs play in accelerating solar power uptake?
Demand Side Response and grid flexibility programs offer financial incentives for leaseholders and tenants to adopt solar power by paying them for adjusting energy use during peak times or supplying excess energy to the grid.
These programs encourage a more considered approach to energy management and support a more stable grid, promoting wider renewable energy adoption.
How can collaboration help to overcome barriers to solar power adoption?
Overcoming barriers to solar power in commercial properties needs collaboration among tenants, property owners, and policymakers.
Existing incentives and financing options should be adapted for leased properties. Improved financial incentives and supportive policies are essential to reconcile tenant enthusiasm with property owner reluctance.
Aligning interests and implementing targeted solutions will advance the UK’s path to a cleaner, sustainable energy future.
How can BHESCo assist tenants who are interested in solar power?
Tenants who are interested in solar power should contact BHESCo, who can provide supplemental information that they can pass on to their landlord.
The tenant can then make an introduction between BHESCo and their landlord to open a discussion about a collaborative project. The project can be delivered for no upfront cost, with all capital expenditure being financed by BHESCo’s network of community investors or by accessing Government grant funding like the Industrial Energy Transformation Fund (IETF).
Tenants may also wish to request an energy survey from BHESCo, to understand what options they have, and whether solar power will be an effective solution for their circumstances.
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