Renewable business energy
Investing in renewable energy can help you to cut your business energy costs by generating your own power and you could even make a little money by selling your surplus energy back to the grid.
And you’ll be significantly reducing your business’s carbon footprint and doing your part to help the planet as well.
Here’s all you need to know about renewable energy for business.
What renewable energy sources are available for businesses?
There are quite a lot of renewable energy options on the market. Which one is best for your business will depend on its location and the money you’re willing to invest. Conducting a renewable business energy audit can help determine what type of green energy will work best for your company.
Installing solar PV panels is the most common form of renewable energy for businesses. You can attach panels to your roof or even the side of your building. Small systems cost about £5,000 to £10,000 and take around six to 10 years to pay back.
Using wind power to generate energy is only suitable if you have acres of building-free land as you’ll need quite a big system to generate a viable amount of energy. Microturbines (2.5-6kW) cost about £10,000 while larger turbines cost around £3.3 million. Small turbines (20-50kW) take approximately eight to 15 years to pay back while large turbines (1MW-2.5MW) take within one to five years.
Hydroelectric power generates electricity by passing water through a submerged turbine or waterwheel. These systems cost about £4,000 to £8,000 per kW of capacity installed with an 8kW hydroelectric power plant taking seven years to pay back
A solar thermal energy installation uses sunlight to heat your hot water tank. They are easy to install and can be put on the side of a building. They cost from between £3,000 to £5,000 and take approximately five years to pay back.
Combined heat and power systems capture the heat created by your electricity and use it to heat water. They can cost about £32,500 and take around 10.5 years to pay back.
Biomass systems generate energy by burning organic material such as straw or wood pellets. The cost will vary depending on boiler size and type of fuel and usually take five to 12 years to pay back.
Anaerobic digestion generates heat and electricity by burning methane created by the breakdown of organic materials such as plant or animal waste. It requires a large amount of space for storage and costs £8,750 per kWh.
Geothermal and ground source heat pumps can be fitted to the side of your building and use low levels of naturally occurring heat in the ground to generate both heating and cooling. These systems cost between £11,000 and £15,000 take about 15 years to pay back.
Once you’ve chosen your preferred renewable energy source, you’ll need to find out if you’ll have to apply for planning permission to make any changes to your building or connections. Check the regulatory and legal obligations of installing your chosen type of clean energy (your supplier should be able to help you with this) and make sure that your installer is government approved to protect your investment.
What are the benefits of using renewable energy?
Benefitting from sustainable energy
Fossil fuels will eventually run out meaning that relying on them ultimately makes your company vulnerable. By switching to a sustainable green energy source your business will benefit from very stable energy costs as these sources are not affected by the usual gas and electricity price rises.
Reducing your carbon footprint
Businesses consume 56% of all the UK’s energy so making the switch to renewables can have a big, positive impact as you’ll be directly contributing to a cleaner environment. Using renewable energy sources can greatly improve public image and corporate responsibility. It can even open up your business up to a whole new market of environmentally conscious customers and be a powerful community and social pillar.
Meeting carbon reduction targets
Businesses generating their own renewable power can offset this against the number of allowances they’re required to buy under the Carbon Reduction Commitment Energy Efficiency Scheme.
Returns outweigh costs
If you own your business’s premises outright or if you have a lengthy lease, the cost of investing in renewable energy installations should yield a good return in the long term. Renewable energy equipment can take up to 10 years to begin paying off but after the initial installation costs you’ll usually only have to cover basic maintenance. If you’re only a short-term renter, investing in renewable technology may not be the best option for you.
Earn money back
If your renewable facilities create more energy than you use, you’ll be able to sell your surplus energy back to the grid via a feed in tariff. This will help you to faster cover the initial cost of the equipment.
Unfortunately, the FIT scheme closed for new applications on March 31, 2019.
If you already have an eligible system installed and you have already successfully applied for FITs payments you'll not be affected by the scheme closure.
If you installed an eligible system with an MCS certificate dated on or before March 31, 2019, you have until March 31, 2020 to apply to the scheme.
If you never installed an eligible system on or before March 31 2019, you won't be eligible for FITs payment, but it’s worth keeping an eye out for alternative deals offered by your business energy supplier.
To hear more about how MoneySuperMarket could help you to find a great renewable energy deal, call one of our expert energy advisors today on 0800 088 6986.