Solar power isn’t new. Solar photovoltaics (PV), the kind used to generate electricity, have been around for decades and most businesses have considered installing them at one time or another.
If it’s been a while since you investigated solar PV for your business, it could pay to take another closer look now. In recent years, while energy prices have risen, the cost of solar panels has tumbled.
For many businesses, the financial case for installing solar PV stacks up better than ever.
Solar panels have become more affordable
With a history tracing all the way back to Switzerland in the 18th century, the first attempts to commercialise solar PV started in the 1950s and 1960s, when a company called Hoffman Electronics was able to increase the efficiency of PV systems. But even then, the price per watt of electricity produced by PV meant the technology was only really viable for large, remote, off grid users.
Government funding programmes, like the UK’s feed-in-tariffs scheme which ran for many years, has since spurred on innovation and improvements in manufacturing technology and efficiency. With independent inverters, optimisers and individual panel monitoring, the performance of PV systems has got better too.
By 2022, worldwide installed PV capacity increased to more than 1 terawatt – satisfying nearly two percent of the world’s electricity demand. Big leaps forward.
These advances have seen the cost of installing solar PV fall. A 30kW system today will cost on average around £32,000. 10 years ago, adjusting for inflation, the typical (median) cost of 30kW system would cost over £40,000.
Energy bills have increased
As the installation costs for a solar PV array have fallen, energy prices have risen. They have risen a lot over the last ten years. Most businesses who rely on power from the grid will have felt this impact, with the average cost of a unit of electricity rising from 11p in 2014, to as much as 28p in 2023.
This combination of falling installation costs and rising energy bills has made the business case for solar PV much more appealing for many businesses as the return on investment becomes so much quicker.
Putting into context
Let’s look at a couple of example simple business cases to put this into context for you and your business – looking at the payback period for PV projects today versus 10 years ago.
If you are a smaller-sized site such as an office, grocery shop or dental surgery, the payback period for installing a 2.58kW system has reduced by 15 years:
At the other end of things, if you are lucky enough to have space for a larger solar PV array, for example if you are a factory or warehouse, or have space for a ground mounted system, the payback period for installing a 31kW system reduces by 11 years:
What to do next
If you are looking for ways to power your business for less, reduce your energy bills and your carbon emissions, there are several options available.
Due to solar PV’s quick and easy installation, many Scottish businesses have already installed panels and are enjoying the benefits they provide. Check out the Green Network For Businesses to find and learn from businesses near you that have already taken advantage of solar PV.
With rising energy prices and falling installation costs, it might be time for your business to join them. For further information on PV – check out our quick guide.
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