Onsite solar* can be deployed at the speed and scale required to combat the climate crisis, all while protecting businesses from sky-high energy prices.
We think onsite solar is a no-brainer, and chances are that if you’re reading this, you might agree. But if you need help convincing internal stakeholders, we’ve laid out our six best arguments for making onsite solar a key part of renewable energy procurement strategy.
1. Onsite solar can cover a substantial part of your power needs
“It’s just a drop in the ocean.” “It won’t move the needle.” These are the typical objections that buyers might have towards onsite solar. However, they couldn’t be more wrong. Onsite solar can actually cover a substantial part of your electricity needs.
Research shows that across the EU, rooftop solar could cover almost 25% of the electricity demand. This is more than the total share of natural gas in 2022 and equal to the electricity consumption of Germany and Poland combined.
And the benefits are catching on: In 2022, rooftop was the largest source of solar installations in the EU (larger than utility-scale installations) representing 60% of installed capacity, according to Solar Power Europe. What’s even more interesting is that it is the commercial installations — i.e. corporates adopting solar — that grew the most, at a rate of 55%.
Looking at the individual site, a rooftop solar installation can typically offset up to 20% of your electricity purchase. That might not sound like a lot at first, but imagine rolling out that savings across all your sites in all your markets. If you couple that with ground-mounted and carport installations where applicable, we’re talking about substantial savings on your energy costs and reduction of Scope 2 emissions. Plus, as the business case for battery storage improves, you’ll be able to offset an even larger share of your electricity consumption by reducing your exports.
2. Onsite solar saves money on the non-commodity part of your power bill, like taxes and grid fees
As compared to a virtual PPA from a utility scale project, onsite solar saves you more money than just on your electricity charges. When the electricity is consumed behind your meter, you also offset taxes and variable grid fees, making the business case strong across Europe. On average, a large-scale (+1 MW) onsite solar installation in central Europe will reduce your power bill of around 10-15%. However, with today’s high power prices, the savings can be significantly higher.
In addition to saving money from day one, you’ll also get the hedging properties of locking in your price long term.
3. Onsite solar can be implemented faster than other renewable energy sources
Compared to utility scale wind and solar projects, onsite solar can be deployed fast. Once you’ve decided to implement onsite solar, you can have installations in place across all your sites in less than a year.
Despite what you might think, the construction phase — installing the panels on your roof/ground/carport — is actually the shortest part of the process. For a large scale (+1 MW) rooftop installation, construction can be completed in as few as two months.
The preparation and development can take a little longer, although it’s still faster than for offsite wind or solar projects. While local differences exist depending on the market, you can count on an average of around three to six months to secure the permits you need. However, expect it to go faster in the future. The European Council recently announced their target that the permitting process for a rooftop installation should never take more than three months.
4. Onsite solar capitalizes on unused space
With onsite solar, you can capitalize on space that can’t be used for other purposes, such as your roof or your carport. Why is that important? As more and more utility scale wind and solar projects are being deployed, there is a growing tension between decarbonizing the economy and protecting land and threatened species. Onsite solar can help alleviate that tension, since it allows you to use spaces that typically have no alternative use. This means that we can keep agricultural land, fragile habitats, and natural areas intact while at the same time accelerating renewable energy deployment and decarbonization.
An additional land conservation benefit of onsite solar is that it produces electricity close to where it’s consumed. As a result, it reduces transmission losses on the grid as well as the need for new transmission infrastructure, which can have a negative impact on farmland and ecosystems. In fact, a growing number of corporations now see onsite solar as a prerequisite for buying power from offsite projects. After all, you need to make sure that you do what you can with your own space before using someone else’s.
In addition, having solar panels on your site also helps with social acceptance, which is an important enabler for the energy transition as a whole.
5. Onsite solar is reliable: A part of the “future site”
One year into Russia’s invasion of Ukraine, the European energy landscape has changed dramatically and energy security has become a top priority for governments and businesses alike.
Pairing your onsite solar installation with battery storage can act as a sunshine insurance, allowing the stored power to be dispensed when power demand and prices are high and when solar generation is low. You can also use it as a back-up source of energy during power outages.
In addition, we’ll soon see increasing integration of smart technologies to your solar-plus-storage systems, making it even more impactful. For example, the battery charge and discharge can be determined depending on weather forecasts, electricity prices or grid constraints.
Furthermore, when the smart technologies are also connected to the power consuming activities at your site, such as EVs that can also serve as power storage themselves, you’ll be taking the first steps towards a truly decentralized grid.
6. It’s a mature market with established business models
The solar market has undergone remarkable growth during the past few decades and today it’s a mature market with standardized technology and well-established business models.
Depending on your risk appetite and the amount of resources you’re willing to invest, you can be sure to find the right solutions to support you in your rollout. The two most common business models available in the market today are CAPEX, where you invest your own money and own the solar installations yourself, and Power Purchase Agreements (also called solar-as-a-service), where you rely on a third party to finance, develop, install and operate your solar installations.
If you’re keen to get started building onsite solar into your company’s renewable energy strategy, or simply have more questions, visit www.alight-energy.com/onsite-solar or get in touch directly.
*Onsite solar is when solar panels are installed on your company’s site — be it a rooftop, carport, or nearby land — and the energy they produce is consumed at your site, or “behind the meter.” This is in contrast to “offsite solar,” where a utility scale solar farm is built and connected into the grid.
