Solar Panel Uses in the Manufacturing Industry

Presently in the UK, we’re facing significant increases in energy costs across the board, which is putting a heavy toll on manufacturing costs. Understandably businesses are focused on cutting their operating costs and investing in a solar panel system can help you to hit that headline goal. 

A solar panel installation can also future-proof your business, add value to your property and ensure you hit your Corporate Social Responsibility commitments. Any good business manager will tell you that there’s nothing worse than avoidable waste or inefficient use of resources, like an idle roof. So read on and find out how you can make better use of your unused rooftop space.   

Why is Solar Power Important for Industry?

According to the International Renewable Energy Agency (IRENA), the energy-intensive sectors account for more than 75% of global usage of energy demand, including electricity. The energy-intensive sectors include the manufacturing of iron and steel, non-ferrous metals, chemical and petrochemical, pulp and paper, and cement. 

With such a high demand for energy, it’s easy to see that the manufacturing industry not only faces substantial costs but also has a very large carbon footprint. The need to consider alternative energy sources, such as solar power, has never been higher. 

Rising Energy Costs

In the space of a year, the average electricity costs faced by manufacturing businesses have increased by 67% or 7.05p per kWh. With electricity costs accounting for between 15-20% of operating costs for the average manufacturing business, those price increases are significantly impacting profitability.  

Installing solar systems enables businesses to fix the cost of their electricity, typically for the entire lifespan of the solar panels. Not only do you reduce your reliance on the National Grid (and any potential brownouts), but it’s possible to make savings up to 100% on daytime electricity costs, depending on the type of renewable energy contract you have in place. 

Profitability

Sometimes, the quickest and easiest way to improve profitability is through cost-cutting and there’s no doubt that installing a solar system can help significantly reduce your business’ energy bill. However, a commercial solar panels system can improve your business’s profitability in a number of surprising ways.

By making use of previously unused rooftop space, you’re able to generate electricity for your business to consume. Depending on the cooperation model you sign up for, you could essentially rent out your rooftop space to the government to contribute to national electricity supplies. 

There are two cooperation models for installing solar energy systems: Capital Expenditure and Purchase Power Agreement. 

Under the Capital Expenditure model, you buy and install the solar system for your business. Any energy produced can be used to support your day-to-day energy needs and excess electricity is fed back into the National Grid, which the government pays you for. The equivalent cost of generating electricity via this approach is typically in the range of 4-6p/kWh.  The cost of financing any capital outlay typically adds an additional 1-2p/kWh to the equivalent cost.

A Purchase Power Agreement (PPA) is rapidly becoming one of the most popular ways for large organisations to finance new solar panel systems, as there’s no upfront cost. To qualify for the PPA, applicants must meet certain criteria regarding energy usage or available roof space. Under a PPA model, the solar panels are installed free of charge and the business buys back electricity at a cheaper rate than standard grid tariffs. 

Corporate Social Responsibility

Since the end of the first national Covid lockdown in 2020, the UK has been increasingly focused on achieving a “Green Recovery” and Net Zero carbon emissions by 2050. 

Solar energy is just one of the clean energy alternatives to fossil fuels that can enable the manufacturing industry to achieve these targets. Solar panels generate electricity without carbon pollution. 

Beyond the UK government’s targets, end-consumers are also becoming increasingly savvy about sustainability. More and more consumers pay attention to Corporate Social Responsibility values, and a business’s green credentials can be the deciding factor when a consumer needs to choose between suppliers. 

Legislation

In the UK, there are several key pieces of legislation aimed at ensuring that organisations are energy compliant. Two of the main legislations that impact the manufacturing industry are:

• The Energy Savings Opportunity Scheme (ESOS); and
• Minimum Energy Efficiency Standards (MEES)

The ESOS was introduced in 2015 and requires large organisations – those with more than 250 employees or a turnover of more than £44m and an annual balance sheet of over £38m – to undertake an energy audit every four years. The ESOS assessment informs businesses about their energy usage and advises new ways to save energy. 

The MEES regulations were introduced to rented commercial buildings in 2018. Under this set of requirements, commercial buildings must achieve a minimum Energy Performance Certificate (EPC) rating of E or above in order for them to be let out. From 1st April 2023, this requirement applies to all tenancies, new and existing, unless the building has been registered for an exemption. 

It’s worth noting that legislation is only set to become more stringent over time as the UK works ever harder to reduce its carbon footprint. Already there are plans for the minimum EPC band to be increased to C by 2027, and B by 2030, for all commercial rentals.

Can Solar Energy Be Used in a Factory?

Solar PV technology has improved significantly, so not only is it possible for solar panels to fully power a factory, but they’re also much more cost-effective. 

Can Factories Run on Solar Power?

Theoretically factories could wholly run on solar power with the inclusion of a battery system.  In reality though, it is unlikely that it would be possible to do this without significant and possibly unjustifiable expense.  To ensure that your factory would not run out of power you would need to significantly ‘oversize’ your solar PV system, so that it would provide enough electricity for your business even in the winter months, and to do this it would also require a large battery.

In our experience, we typically see businesses benefitting from their solar PV systems providing between 20-50% of a factories annual electricity needs without the need for a battery.  A battery may well increase the self-sufficiency of a site, but this will depend on a number of factors including the profile of consumption.

Solar PV works really well to supplement grid supplied electricity.  Grid supplied electricity is a cost effective way of sourcing electricity when onsite solar generation is not providing e.g. at night.

Are There Any Examples?

There are many pioneering businesses that rely solely on renewable energy sources. 

In May 2019, ABB, a multinational technology firm, opened the doors to its first CO₂-neutral production site in Luedenscheid, Germany. The factory manufactures electrical equipment such as power sockets on a huge scale and is supported by a solar photovoltaic system, which was installed over its car park. The system produces 1,100 mW of power annually. 

Other factories are also following suit and investing heavily in renewable energy. Apple Park in Cupertino is home to Apple’s headquarters. It is powered by 100% renewable energy, which is derived from multiple sources including a 14 mW rooftop solar system. Similarly, Tesla Motors’ Gigafactory in Nevada is designed to be a net zero energy factory and primarily runs from solar power.

Which Solar Panels are Best for Industrial Use?

When it comes to installing solar panels for industrial use, businesses are looking for the best possible ROI – ideally, high-power generators with low degradation rates. That’s where industrial solar panels can benefit the manufacturing industry.

How Long Do Industrial Solar Panels Last?

Solar panels typically come with at least a 25-year warranty and have an expected lifespan of 25-30 years – which is how long you could be fixing your electricity rate. In reality, solar panels can outlive their warranties and a 40-year lifetime is not uncommon. 

Solar Energy Solutions From Mypower

With energy costs set to continue rising, there’s no better time to lock in your electricity rates. Our team at Mypower is highly experienced and can support you to design, supply, and install an industrial solar system that reduces your long-term costs and your carbon footprint.

Get in touch today to find out how Mypower can help you become more energy efficient and compliant with UK energy legislation.