Posted in: Industrial Solar

An archive of all our industrial solar energy stories and blog posts that have been published by SOLA. If you would like to learn more about our industrial solar installations please click here.

Alrode Brewery in Alberton will be powered with solar PV electricity

AB InBev bolster breweries with 8.7 MW renewable energy from SOLA

Renewable energy solutions are a quick and efficient way for South Africa to reduce energy demand on Eskom’s constrained grid, and solutions are being supported by businesses who see the value of embedded electricity solutions for their supply chains. 

This is according to Chris Haw, Chairperson of the SOLA Group, who in 2018 signed seven multi-tiered Power Purchase Agreements (PPA) with AB InBev Africa that are seeing large solar power plants built across seven major breweries in South Africa.

The Power Purchase Agreements will total around 8.7 MW DC capacity. Of this, 2.6 MW have already reached practical completion with the remaining projects in advanced stages of construction.

“Not only is solar a viable and cost-effective option for us, it aligns to our global sustainability strategy, which entails going 100% renewable by 2025,” says Taryn Rosekilly, Vice President of Procurement and Sustainability at SAB and AB InBev Africa.

ABin Bev Breweries will now be powered with solar energy

The bold step taken by AB InBev Africa highlights the private sector’s strong drive towards reducing carbon emissions and procuring renewable energy solutions.

Gugulethu Nogaya, the Renewable Energy Procurement Manager at AB InBev Africa explains that “procuring renewable energy is part of our sustainability objectives set at a global level. Our global renewable energy commitment is to ensure that 50% of our purchased electricity will come from renewable energy sources by 2020, and 100% by 2025”. 

Nogaya points out that the company has achieved its 50 % target ahead of schedule. “We are currently on track to achieve our 100 % target, with the PPA being an instrumental first step in ensuring our African business is on track to achieve the 2025 ambition.”  

Nogaya adds that “in order to meet the AB InBev 100 % target in South Africa, it will require solar renewable energy facilities to the total of 191 MW.” 

Jonathan Skeen, Gauteng MD and Gugulethu Nogaya, Renewable Energy Procurement Manager, at the launch of AB InBev's renewable electricity and electric truck launch

According to the International Energy Agency, distributed solar PV systems in homes and Commercial and Industrial buildings have almost tripled since 2014. It predicts that distributed energy will grow as much as onshore wind by 2024, making up half of all new solar PV capacity. 

This is likely due to the flexibility and affordability of PV plants compared to other forms of energy generation. The rollout of large-scale solar PV systems takes much less time than other generation technologies. 

There is also a greater demand and expectation that businesses take more responsibility for the way in which they operate. Providing renewable energy allows businesses to meet their sustainability targets whilst taking pressure off of Eskom’s load.

The PPA between AB InBev Africa and the SOLA Group is allowing solar PV to be rolled out without AB InBev incurring capital costs. Instead, the company will purchase its power requirement directly from SOLA, with the remainder coming from Eskom and local municipalities. 

In 2019, SOLA secured R400 M with partners from African Infrastructure Investment Managers (AIIM) and Nedbank in order to fund projects such as the AB InBev Africa solar facilities.

“Embedded electricity generation – particularly solar PV – can quickly address Eskom’s supply shortfall,” states Haw. “For large Commercial and Industrial companies, procuring renewable power enables saving costs whilst also reducing their carbon footprints.” 

The solar PV plants for AB InBev Africa span across seven different sites in various areas of the country, including the Western Cape, Limpopo, Gauteng, KwaZulu-Natal and the Eastern Cape. 

“Combined, the plants will consist of over 23 000 solar panels. The construction of the projects will create 175 jobs, in addition to SOLA’s 56 permanent positions,” points out Haw. 

AB InBev Africa is one of the largest industrial business in South Africa, making the conversion of their sites to solar significant. “The PV systems will produce close to 14 GWh of electricity per year – the equivalent of taking over 2000 cars off the roads. This is exactly the type of clean energy procurement that we need to see more companies committing to,” concludes Haw. 

Industrial solar installations – dos and don’ts for facilities managers

If you run an industrial facility you’ll be well aware of the benefits of grid-tied solar PV solutions. Running cheaper and more efficiently than utility-provided power (such as Eskom), solar PV provides substantial savings for industrial facilities as a source of reliable alternative power. However, there are many solar companies purporting the benefits of solar power, and not all facilities managers are able to discern the best option for their facility. The below guide highlights 5 dos and don’ts for facilities managers to ensure that the procurement of solar is an effortless one.

Do: Practice due diligence when procuring solar PV.

Procuring solar PV is a 25 year decision. If chosen correctly, solar PV can provide 25 years of affordable and clean energy to your industrial plant. As such, it is important that the procurement process is done thoroughly and due diligence is practiced. It can be easy to rush into buying solar – particularly when the savings look promising. However, practicing due diligence when procuring solar will pay off in the long run. Start by asking a few simple questions about the solar PV procurement.

  • What is the objective of the PV system? If you are using it to save money, are you looking to make operational savings through a Power Purchase Agreement, or add value to your building through acquiring a solar asset? Perhaps a bit of both?
  • If you are looking to buy a solar system outright, do you have sufficient finance to do this? Is a PPA a better option for your business?
  • What is your typical energy load, and how much of it occurs during the day? Setting up metering can really help in determining what the right sized solar PV system would look like. 
  • Where would you place the solar PV system? Although wheeling arrangements allow power to be generated in a remote solar PV facility, the majority of small-scale embedded generation (SSEG) occurs on site. Having either a stable roof or a suitable piece of land is an important consideration when writing up your request for solar quotation.

Do: Get a reputable company to carry out your industrial solar installation

The most important part of your decision will be based on getting a reputable company to build the industrial solar installation. This means choosing a company with a solid track record of solar projects, particularly in industrial facilities. The chosen company should be able to get good prices on high-quality solar components such as modules; design efficiently and thoroughly, and carry out construction safely and within the budget and timeline. 

If you’re opting for a solar PPA option – where you don’t own the solar PV facility but simply buy the energy that it generates – you’ll want to ensure that the company you choose has sufficient available finance to build and maintain the system. Making sure that the company has credentials to stick around for the full term of the PPA is important.  Make sure that the solar PV service provider can meet basic requirements, such as:

  • Design credentials. Does the company have the relevant design experience and credentials to effectively design a PV system for your site? 
  • Adherence to minimum standards. In South Africa, this includes adherence to all relevant SANS codes, and ensuring that items such as wind load calculations are carried out according to SANS standards
  • Compliance with Municipal and National electricity standards municipal/eskom standards, including carrying out the relevant application processes to ensure that the PV system is legally compliant (such as Small Scale Embedded Generation (SSEG) applications)
  • Ensuring that a Practicing Engineer (Pr. Eng) is able to sign off on the system design and construction, yield estimation accuracy, 
  • Qualified site supervision, and construction that complies with all Occupational Health and Safety standards
Industrial Solar Installations SOLA

Do: Compare Apples with Apples

Getting comparative quotes is always recommended: it helps you to compare different solar PV companies and pricing, which helps to make a better decision. However, make sure to compare apples with apples when comparing quotes. It is important to consider that different PV companies structure their pricing in different ways, so be sure you understand exactly what each company is offering before comparing their pricing. 

When comparing proposals from various companies, consider the following: 

  • Equipment selection: the selection of tier 1, quality equipment will likely push the price up slightly, but it will mean that the system is better able to perform over its 25 year lifespan.
  • Inverter and panel derating characteristics: the derating of inverters and panels will affect the ability of the PV system to produce power over time
  • The sizing of the PV system: Is is optimally sized in order to meet your load requirements? A system that is too large or too small won’t save you the optimal amount of money. A slightly higher AC-DC ration will also affect price.
  • Lifetime savings and guaranteed savings: make sure you compare these two metrics, as the initial EPC price might differ but offer more in the way of lifetime savings, etc.  
  • Total guarantee/warranty package, insurance and liability: what parts of the system are insured and have warranties? This will affect the costs of upkeep and maintenance of the system. 

If you are thinking of entering into a solar Power Purchase Agreement (eg. buying solar energy directly), consider the following when comparing quotes:

  • The length of the PPA. Generally, the longer the PPA, the more affordable the tariffs will be. The length of the PPA will need to suit your business’s needs over the long term, considering things like whether the business would like to take ownership of the PV system.
  • The tariff escalation. At a first glance, a PPA tariff might appear higher, but it will have a lower escalation throughout the length of the PPA. Understanding the escalation is important to consider
  • Any upfront payments – again, a lower tariff might be because of a large upfront payment, so it is important to consider when comparing quotes. This is also the case with any bullet payments during the term or at the end of the PPA. 
  • Whether insurance and part replacement is included in the tariff. Again, a lower tariff might have excluded these items, making the costs more over the long run.
  • Forex – how forex is calculated and included on the agreement will affect the price. 

Don’t: Delay the solar procurement process

As much as it is important to practice due diligence when procuring solar PV, delaying the process unnecessarily is also seriously detrimental to the solar PV process. Solar PV savings start from day 1 – meaning that delaying the process is also delaying the cost savings. If the process is delayed, there could be unnecessary complications and expenses, such as 

  • Availability of the construction team and build schedule – most companies have tight timelines and their availability could mean that the process is further delayed if your project is not booked into the build schedule timeously.
  • SSEG applications – delaying choosing a solar PV provider can result in a delayed SSEG application, which can result in delays to switching the PV system on (and thus benefiting from the clean energy that it provides!)
  • Structural assessments – delaying the procurement process can also affect the structural assessment process, which is an essential part of rooftop solar PV systems. This can result in an overall delay of constructing the project. 

Dont: forget to calculate your cost savings through solar – both monetary and environmental 

At the end of the day, the solar PV system will save your business significantly in terms of operational costs. However, there is also significant benefit in terms of environmental savings. Keeping track of the carbon emissions savings is an important way to acknowledge the value of the solar PV system. 

Making sure that you have a competent Operations and Maintenance Service Partner will ensure that you can keep track of the relevant cost savings on a monthly basis and ensure that the plant is performing optimally. This can help to diagnose and solve any issues early, saving money for your operations.

If you have opted for a solar PPA, ensure that your partner provides you with carbon emissions savings with your monthly invoice, so that you can use the data when calculating your overall carbon savings. Solar PV is a choice that not only saves money – it is a conscious choice that ultimately will sustain generations to come. It’s something to be proud of, and use in your marketing strategy.

In conclusion, solar installations are useful for industrial facilities. Saving costs and carbon, they are a surefire way to increase cost savings. Following the above dos and don’ts will ensure that your solar installation is ultimately the right fit for your business. 

Industrial and Commercial solar PV projects

SOLA secures R400M to finance solar PV projects for Commercial and Industrial properties through Power Purchase Agreements

A clean fund for the future

The SOLA Group has secured R400m in order to build commercial and industrial solar PV facilities across Southern Africa. The renewable energy fund, Orionis, will enable 40 MW of solar PV projects to be built without capital expenditure by the electricity off-takers.

The deal is a result of a partnership between the SOLA Group, African Infrastructure Investment Managers (AIIM), and Nedbank Energy Finance, who have partnered to provide affordable solar PV solutions for businesses that are in dire need of electricity security.

Chris Haw, chairperson of the SOLA Group, believes that  the clean energy solutions created by the fund are timeous.
“This partnership brings together three highly experienced entities whose combined skills offer consumers clean energy solutions at a time when our country desperately needs it,” he said. 

“This partnership brings together three highly experienced entities whose combined skills offer consumers clean energy solutions at a time when our country desperately needs it”

SOLA’s extensive track record of developing and building solar PV has allowed for the development of the Orionis fund, which will have the ability to fund 40 MW worth of projects. The forthcoming pipeline already includes 15 MW of solar PV Power Purchase Agreements, including several breweries and other industrial facilities around South Africa. The consumers pay for their clean energy directly, through a PPA tariff that is typically 20% lower than Eskom or their municipal provider’s rates.

The financed model would allow sectors focused on short-term cost reductions in their Opex budgets, such as FMCG companies, the opportunity to tap into solar power. This would allow reductions in operating costs and in carbon emissions, which are generally very important to industrial sectors. The financed solar PV is provided through a legal arrangement called a Power Purchase Agreement.

What is a PPA? 

A commercial solar PPA enables a fully integrated solar photovoltaic system to be installed and provide electricity to the entity through a customised monthly payment plan, typically at a tariff that is 20% lower than Eskom. PPAs can also include the option to take ownership of the PV system at the end of the financed period, with no upfront installation costs. The conditions of power purchase are detailed in the PPA which is negotiated directly with each client to ensure the agreement is workable for both parties.  

How do clean energy funds reduce opex?

As mentioned, financed renewable energy projects will enable industrial facilities to access secure and cheaper power, and free up capex for investment into their core business activities. But how does this work? 

Over the last few years, reduced costs of embedded electricity generation such as solar PV have interrupted the traditional model of electricity production. In other words, solar PV power is rapidly becoming the cheapest form of power to procure globally. In order to fund solar PV projects, however, large sums of capital are needed in order to permit, design, construct and keep the solar PV operational – similar to a regular utility such as Eskom. 

Whilst companies can opt to buy their PV systems outright, through an Engineering, Procurement and Construction (EPC) option, there is often little need for the entity to own the PV system themselves, as their main goal could be to reduce their operating expenses. Without available Capex, companies would need to secure financing in order to fund the construction of these projects.

SOLA’s PPA offering, through consolidating the finance, design, construction and operation of solar projects, allows companies to access cheaper finance than procuring it individually. “Operating at scale allows SOLA to provide lower tariffs and more competitive rates, reducing costs of financing,” adds Haw. 

For large commercial and industrial companies, PPAs enable flexible procurement of electricity, allowing them to consume the cheapest electricity available at a given time whilst also reducing their carbon footprints.

How financed solar PV can support the African Economy

Allowing small-scale, and flexible embedded generation of electricity is a key aspect to transition to a low-carbon economy, as it allows for increased penetration of renewables. 

Supporting the further deployment of small-scale embedded generation (SSEG) plants, according to Council for Scientific and Industrial Research (CSIR) Energy Centre, will also create thousands of full-time jobs and help to grow hundreds of small businesses across the country. The SOLA Group currently employs 50 full-time staff members for its South African operations, and the construction of 40 MW of solar PV projects through the fund is likely to create an additional 880 jobs in the coming years.

“The model of electricity generation that incorporates both centralised and distributed electricity will improve the ability for South Africa to meet energy demand, reduce electricity costs and strengthen resilience to outages,” concludes Haw. 


FMCG industrial manufacturing has great potential for Africa

Solar for the FMCG Sector: Clean Energy Solutions that Work

FMCG players

FMCG is one of the largest drivers of the industrial sector in Africa, presenting a wealth of opportunity for manufacturers and distributors. The industry is comprised of non-durable goods that are produced, sold and consumed quickly. These products take the form of consumables such as beverages, packaged foods, toiletries and over-the-counter medication.

Fast-moving consumer goods (FMCG) are a market with tremendous potential to drive economic growth in the SADC region and further afield. However, the industry is heavily dependent on reliable power, secure and efficient transport routes and strong distribution networks. FMCG typically have a small profit margin but are lucrative when sold in large quantities, thus a reduction in energy costs goes a long way towards bolstering narrow profit margins.

FMCG industrial manufacturing has great potential for Africa

Brilliant technologies and brave entrepreneurs

‘Africa has nine times the solar potential of Europe and an annual equivalent to one hundred million tons of oil.’

In a recent article in the Journal of International Affairs Professor Wim Naudé reports that in a landscape of brilliant technologies and brave entrepreneurs the future is looking bright for African manufacturing. According to Naudé, renewable energy technologies like solar panels and batteries may be expected to improve the competitiveness of African manufacturing.

Peter Diamandis, founder and CEO of the X Prize Foundation, and journalist Steven Kotler note that ‘Africa has nine times the solar potential of Europe and an annual equivalent to one hundred million tons of oil.’

The resources are there and the benefits in terms of cost are undeniable. Notable FMCG industry leader Coca-Cola Beverages Africa (CCBA) recently installed a 574 kWp solar facility at the Coca-Cola Namibia Bottling Company (CCNBC). The project is expected to produce 1,016,760 kWh of energy in the first year of production, with appreciable Energy and Demand charge savings expected in the first year of production. In addition this project results in 901 tons of CO2 reduction per year of operation. Given that Namibia’s solar irradiation levels are the second highest levels in the World (at 3000 kWh/m² over a large part of the country) and NamPower tariff increases are inevitable, it makes considerable sense to look to industrial solar power for cost-savings and decentralised efficiency.

The environmental benefits for your brand

The Learning and Development Director at IRI, Marylee Townshend predicts that given considerable global and local societal shifts in the past year, FMCG brands which stand for something are likely to win out in a competitive environment. Staying neutral is no longer an option as more consumers than ever before are developing a preference for ethical and environmentally-friendly products. This is a double win for manufacturers and distributors who commit to clean energy solutions, in terms of having a stable, cost-cutting energy source and brand success. Notable industry leader Fair Cape Dairies has stepped up to the plate by procuring solar PV  energy to provide clean, noise-free electricity to the farm during the day, while reducing the farm’s total energy consumption by 16% per annum over its 25-year lifespan.

‘Businesses that commit to clean energy, such as Fair Cape Dairies, are helping to lead the way for South Africa’s sustainable development,’ explains Dr Chris Haw, chairperson of SOLA and head of the Solar Finance division.

Plattekloof Village Shopping centre, owned by industry heavy-weight Pick n Pay Retailers, has also embraced clean energy solutions with a 944 kWp solar system on its roof, which is expected to generate 1.4 million kWh of clean electricity per year. Plattekloof Village is part of a growing fleet of shopping centres electing to supplement their electricity supply with decentralized solar PV. Given the recent challenges to Eskom’s ability to supply uninterrupted electricity it is unsurprising that malls, factories and distribution centres are increasingly looking to independent energy solutions. The ample roof space available and considerable daily energy use typified by these organisations makes industrial solar power the ideal solution.

FMCG challenges

FMCG is a challenging arena with many considerations for facilities managers. These include product placement and competition. Townshend contends that big data is increasingly the driving force behind tactical decisions in FMCG. In addition loyalty card data provides unparalleled insight into consumer behaviour. Given the financial climate in the region, cutting costs and value-for-money is an immediate concern for consumers. Narrow profit-margins in the FMCG industry means that every expense matters; this is when cost-efficient energy management becomes imperative.

Breweries and other FMCG industries can benefit from solar PV

Simplifying Electricity Management

Conservative consumption and optimum production are key to the success of every industrial FMCG facility. A good place to start is a comprehensive look at electricity bills over the course of a year. Following this analysis, spikes in energy consumption will quickly emerge, and from there it will be easier to implement energy-saving regimens. Introducing solar has been proven to result in considerable energy and cost-saving benefits. Once one has identified the peak capacity charges, measures can be made to reduce overall energy costs even if total energy consumption remains constant.

Solar financing

‘Solar finance – through a power purchase agreement – allows these businesses to commit to their targets and reduce their carbon emissions through buying clean energy directly…’

There are two options when considering harnessing the cost-saving benefits of industrial solar.

Firstly there is the outright buy or EPC solution, such as the facility at CCBA Windhoek, which purchased the solar system upfront to save on energy costs. Industrial energy consumers can save significantly by altering their electricity load to peak during the day when the solar PV system is most productive, thus reducing demand charges significantly. In a facility such as the CCBA Windhoek, the cost of the solar PV system is insignificant compared to the amount that it will produce over its lifetime.

The second option is a solar PPA, or power purchase agreement. This arrangement allows businesses to purchase solar PV-generated electricity with no upfront costs, while enjoying the immediate cost-saving benefits, such as the demand charges described earlier. The benefits of solar PPAs for industrial facilities are fixed tariff increases and monthly payment amounts, rather than lump-sum capex investments. Similarly, the solar PV system is not registered as an asset on the facility’s books, but is rather owned and maintained by a solar finance provider such as SOLA. After a few years, the facility can opt to buy back the solar PV system, or take ownership of the system after a specified number of years.

Such an arrangement was entered into by SOLA and Fair Cape Dairies. As Dr Haw explains, ‘Companies such as Fair Cape Dairies that have committed to sustainability goals, may not want to purchase a solar system outright. Solar finance – through a power purchase agreement – allows these businesses to commit to their targets and reduce their carbon emissions through buying clean energy directly. During the day, Fair Cape Dairies will use the clean energy generated on their roof for their own consumption needs, without owning the solar system themselves.’

Dairies can benefit from financed solar PV solutions

As the costs of solar equipment continue to fall, industrial solar power systems in Southern Africa are more viable than ever. Given Eskom’s escalating tariffs, large-scale solar facilities are able to provide consistent power for industrial operations at costs lower than Eskom’s lowest bulk tariff. Solar PV is both a cost-effective and decentralised form of energy, making it perfect for large-scale energy users in the FMCG sector.


How to prevent loadshedding in commercial buildings

3 Options to proof your commercial and industrial building from load shedding

The nationwide spate of load shedding in South Africa is not just a highly frustrating situation for individuals: it is a hindrance to businesses and the economy in general. As South Africa starts to approach level 5 and 6 load shedding scenarios, it is important to look at the alternatives available to businesses around the country in order to prevent the loss of productivity across the board. At the same time, various different alternative sources of power should be evaluated based on their cost-effectiveness and environmental impact. The following article explores various load shedding prevention methods for commercial and industrial buildings.

Option 1: Using backup diesel generator

Option 2: Retrofitting a grid-tied solar PV system

Option 3: Going off grid using a solar PV/battery microgrid


Option 1: Using backup generators

This commonly used form of commercial backup power consists of diesel gensets that switch on when the power goes off. This is a good option for ad-hoc power cuts in places that cannot afford to lose power, such as hospitals, convention centres and large retail centres.

Before relying on a diesel backup generator, though, the system should be tested with the total load of the building to make sure that it is able to take the full electricity load. If it not possible for the gensets to handle the building’s entire load, an “emergency” scenario – where nothing but the critical systems are backed up – should be tested. An Automatic Transfer Switch (ATS) will be needed to ensure that when the power goes off, the diesel generators are initiated.

Within Eskom’s current loadshedding trajectory, using backup diesel generators is likely to be very expensive, depending on the load size of the building. Diesel itself is much more expensive per kWh than typical Eskom tariffs, and even more expensive when compared with the costs per kWh of solar PV. When evaluating the efficacy of installing diesel gensets, the following questions should be asked:

  1. How many hours per day will the genset(s) be required?
  2. How many litres of diesel are likely to be required?
  3. What are the ongoing maintenance requirements of consistently using diesel generators?
Robben Island has historically used diesel generators to provide the power needed on the island.
Robben Island has historically used diesel generators to provide the power needed on the island.

Option 2: Retrofitting a grid-tied solar PV system

In South Africa, many commercial buildings – hospitals, retail centres, distribution centres, etc – have grid-tied solar PV systems that supply power from the sun during the day. These relatively simple systems are tied to the grid, so they do not provide 100% of the offtaker energy requirement but rather supplement it. Unfortunately, grid-tied solar PV systems do not automatically prevent a building from experiencing load shedding.

Because solar generates Direct Current (DC) power, this needs to be converted into Alternating Current (AC) to be used in buildings as electricity. In order for a solar system to produce usable electricity, therefore, a solar inverter is required. However solar inverters are designed to switch off during a grid outage.

Why is this? For grid-tied solar PV systems, this serves as a vital safety mechanism for personnel that might be working on transmission lines during outages. With solar inverters off, buildings with solar PV systems are prevented from generating power during a grid outage and potentially exporting power to the national grid, which could be fatal for maintenance personnel.

Solar inverters are designed according to international safety standards that require this functionality, which means that grid-tied inverters cannot operate in off-grid conditions. As such, when Eskom goes down, most solar systems do, too.

However, this does not mean that large buildings with solar PV systems do not have options for load shedding. With careful engineering, It is possible to form one’s own “microgrid”, by replicating a fake grid-tied scenario to “trick” the solar inverters into staying on. This requires the use of a generator or battery, and specialised control equipment.

In order to retrofit a grid-tied solar system to operate during load shedding, two essential steps need to be taken. Firstly, the system needs to be isolated from the grid to prevent any exporting of power that could affect the safety of maintenance personnel. Secondly, a voltage forming source is required, in order to provide a reference voltage and frequency to the solar inverter.

Therefore, to prevent a grid-tied solar PV system from going out during a power outage, the following is required:

  1. Hardware that can disconnect the main supply from the grid, effectively isolating the building/facility from the grid.
  2. A diesel generator or battery bank that can provide backup power for the entire facility and provide the necessary voltage and frequency reference to the solar inverters.

These two points require careful engineering and a proper control system to manage the change-over, the dispatching of generators/batteries, and synchronisation of the solar inverters. It also has to oversee resynchronisation to the grid once the grid is available again. This can be automated and should not need any human input. Further, the system would need to be sized correctly in order not to trip under various loading scenarios.

With these two mechanisms in place, there would be a short down-time after an unexpected grid outage, due to the system having to switch itself on and switch to off-grid mode. Once switched over, however, the solar powered electricity which is being generated can be distributed throughout the building.

In order to avoid an outage entirely, it is possible to either isolate from the grid before an expected outage, or have an uninterruptible power supply (UPS) capable of providing continuous, uninterrupted power during an outage.

solar could help Africa's economy to grow

Option 3: Going off-grid: Using solar PV, batteries and Generators to go off-grid

Taking a commercial building off the grid entirely is another, although slightly pricier, option. Solar PV systems, when combined with energy storage, can store excess solar power produced during the day and distribute this later when needed. Solar PV is now one of the cheapest forms of energy, and its distributed nature means it’s perfect for use at source, where it is needed.

However, the costs of batteries and the sophisticated engineering of microgrid systems needs to be evaluated against the building’s requirements. Perhaps, a commercial or retail building operator does not mind paying a premium if that means consistent, clean power. (Microgrids also have particular relevance to supplying power in weak-grid scenarios – such as the one in Cedar Mill Mall which supplements the grid’s 250 kVA with an additional 250 kVA of power).

If your commercial or industrial building is currently using its diesel generators around 30% of the time, the business case for a solar PV and battery combined microgrid will likely look feasible. In a typical stage 4 load shedding scenario, power cuts generally occur for around 7 hours per day. Given the assumption that the energy load in the building is similar throughout the day and that diesel generators are being used to supply power consistently when the grid goes down, this would equate to around 30% of the total electricity consumption – making it a worthwhile investigation.

Whether it is a backup generator, installing a solar PV system with a backup generator or battery, or going entirely off-grid, there are options for commercial and industrial buildings in South Africa to prevent the damage that load shedding can do to business.

Cedar Mill Mall goes solar
Cedar Mill Mall in Clanwilliam is an islandable on-grid microgrid

SOLA Operations and Maintenance (O&M)

O&M service contracts 101: how to choose an O&M service provider

We’ve spoken previously about the value of obtaining O&M services for solar systems on commercial and industrial property. O&M is a key way of ensuring that solar plants perform optimally, reducing energy system downtime. Choosing the correct O&M service partner  will help to provide essential services and personnel for the ongoing operation of the solar PV plant. As such, it’s important to choose the right service partner who will make sure the system is running smoothly, maintained regularly, and monitored remotely to ensure that the expected financial savings are secured.

 

Why is appointing an O&M service partner important?

Financial: appointing an O&M service partner means that the financial returns of the system can be secured. The earlier that any issues within the solar system can be discovered, the quicker they can be resolved, reducing downtime and associated costs.

Safety: having an O&M service partner in place can ensure that safety hazards, such as fire and electrocution hazards, are avoided in advance. An O&M service partner should be able to see real-time system production and coordinate routine maintenance visits that will be able to prevent a host of safety hazards.

Component longevity: having an O&M strategy is also a good way to keep track of each component within a solar PV system. This becomes important as the system ages, as different components will have different warranties and replacement costs.

 

How to choose an O&M service partner

There are several points to consider when deciding on this. For example, does the service provider commit to performance guarantees, and what is their mechanism for ensuring your plant’s performance? In order to ensure service delivery, a performance guarantee will provide peace of mind that if the system underperforms, financial compensation will be provided.

Other points to consider include making sure that the promised Maintenance Schedule is comprehensive and can be adapted to the specific solar PV system. If your solar PV system is on a rooftop in an industrial area, for example, it may require more frequent cleaning; or if it is a carport structure, it might require other checks relevant to the structure. It’s important that the O&M partner understands these nuances.

Other important components of the O&M service are reporting tools and software. Having great maintenance but no way of accessing relevant reports, for example, would affect the overall value of the O&M service provided. Feel free to ask for a demonstration of the software, or an example of the monthly report that you will receive when you sign on with an O&M service partner, in order to understand if their methods of reporting are relevant to your system.

Do you know the warranty length and conditions for each of the different solar system components? Ensuring that your O&M provider is experienced in managing warranty claims, replacement of equipment, and arranging of logistics for repairs or replacements of components will be key to saving you money and reducing downtime. Understanding which components are under specific warranties will ensure cost savings, should they need to be replaced.  

What is included and excluded from a typical O&M contract

Once a relevant O&M service partner is chosen, it is important to sign an O&M service contract to ensure that both parties fulfil their duties on a regular basis. This is an essential component that will ensure that the system is maintained with consequences for the service partner, should they not provide adequate, timely services. It will also protect the performance guarantee of the solar PV system, ensuring that should the system underperform, the business will be financially compensated.

Make sure the contract includes the following clauses:

  • Duties of contractor
    • What exactly will the O&M service partner provide on a monthly, quarterly, bi annual and annual basis? What is excluded?
  • Liability and termination
    • Who is liable for various scenarios? When should the contract be terminated and under what circumstances?
  • Breach of contract clause
    • What constitutes a breach of contract for either party, and is there provision for relevant penalties?
  • Governance of relationship between employer and contractor
    • How will the relationship between yourself and the O&M partnership be governed and altered in the future, if necessary?
  • Site-specific details
    • Things such as the site performance guarantee, when payment should take place, the specifications of the solar plant and the outline of maintenance specific to the site should be detailed
  • Reasonable inclusion
    • What is reasonable to include in the contract, and what is not included in the contract?

Choosing the best O&M service partner and making sure that the contract governs a trusting, accountable relationship is an essential part of solar PV system ownership and management. If you would like a comprehensive guide to O&M strategy, download our free ebook.

Fair Cape Dairies 100 kWp solar system

When cost reduction is king: 3 sectors perfect for solar finance

If you’re in business in South Africa, you’re likely feeling the squeeze of a slow-growing economy. Whilst some sectors have been more affected than others, it is safe to say that cost reduction remains a top priority for most facilities managers in today’s economic environment. At significantly lower cost to coal-based power, solar PV is a perfect solution for reducing overall electricity costs. However, for those that do not have the capex to outlay for the purchase of a new system, solar finance options remain a good choice. In this post we’ll explore three sectors that lend themselves particularly well to solar finance.    

What is solar finance?

Solar finance usually involves a Power Purchase Agreement, or PPA, between a producer of electricity and an end-user of electricity. In the case of solar PV, this usually enables an electricity consumer, such as a building, to utilise solar energy at a cheaper rate to the existing utility. In addition, although the solar system may be installed on the user’s rooftop, the ownership of the system remains elsewhere, and the user pays for the electricity that they consume, rather than for the overall cost of the solar system.

  1. The Manufacturing Sector

Industrial processing, particularly the manufacturing sector, remains one of South Africa’s most important, given the potential to create and maintain jobs. However, in a weak economy, manufacturing is one of the first sectors to suffer: and South Africa is lagging behind its regional peers. Although South Africa needs support and policy certainty when it comes to manufacturing, it is also of chief importance that each individual facility maintains its profitability through slick and efficient and operations – and this should include using the cheapest energy.

At a much lower LCOE than grid-based power, solar is a great option for manufacturing businesses. Solar finance is especially relevant as manufacturers are not necessarily interested in owning and maintaining their own solar system – they just need to access affordable and reliable power. By entering into a solar finance option such as a solar PPA, they can maintain low operating costs and remain competitive in a struggling economy.

Dynachem Industrial manufacturing facility

Dynachem Industrial manufacturing facility, 60 kWp

  1. The Agro processing Sector

Agro processing is a subset of the manufacturing industry but focused on processing raw, agricultural materials. A key growth sector in South Africa, Agro processing has been emphasised by the Department of Trade and Industry, as well at the Eastern Cape’s Department of Economic Development, and for obvious reasons: it accounts for almost 14% of South Africa’s manufacturing sector.

Similar to the manufacturing sector, agro processing runs on a tight margin and reducing operating costs are welcome. Although the input material costs may fluctuate significantly depending on the seasons and weather, entering into a solar PPA will ensure consistently low electricity prices for the processing of the raw materials.

As an added bonus, agro processing plants are often situated in rural areas, where there is access to adequate land for ground-mounted PV solutions, or large agricultural buildings for  rooftop PV solutions.

Fair Cape Dairies 100 kWp solar system

Fair Cape Dairies 100 kWp solar system

  1. The Hospitality and conferencing sector

The hospitality sector is undeniably important to South Africa, with it contributing 9.3 % of the countries overall GDP in 2016. However, the sector is also facing challenges – as disruptive technology such as AirBnB continue to grow and tightened budgets mean less cause for business conference travel.

As any facilities manager of a hotel or conference centre will tell you, running a well-oiled ship is a key aspect of ensuring that their facility remains competitive. This means finding innovative ways to ensure costs are kept to a minimum. When budgeting, planning is very important, particularly because there are several variables year-on-year that can affect the overall cost of maintaining the facility.

This is why a solar finance option is perfect for the hospitality sector: entering into a solar PPA will ensure a fixed escalation on the cost of electricity for several years – meaning greater control when planning energy costs. Ensuring that the building management system is also optimised toward solar energy – for example, ramping up the aircon mid-morning rather than early morning – can ensure even greater savings. The bonus with a PPA, furthermore, is that the system will be operated and maintained externally – giving facilities managers one less thing to worry about.

Century City Conference Centre goes green through solar energy installed by SOLA Future Energy

Century City Conference Centre 260 kWp solar system

Solar finance options are fast-growing way of tapping in to the cost and environmental benefits of solar power. Although these three sectors here are ideal for a solar finance option such as a PPA, it is not only these sectors that can benefit. Contact us to get a sense if a solar finance option will work for you.

Solar finance options make solar PV available to large businesses in Africa

Finance options for rooftop solar PV in Southern Africa

If your business is considering a solar PV system, chances are that you have looked at the advantages of the system in terms of the reduction of electricity acquired from the national grid and reduced carbon emissions, but the most important question will remain: how will a solar system save money for your business?

Although many companies will choose to purchase their solar PV system outright – meaning that after paying a once-off amount for the system, they’ll be able to use the system’s free energy over the next 25+ years – this is not the only option available to go solar. As opposed to purchasing a solar system outright, there are several solar finance options requiring little to no upfront costs, allowing more flexibility for a company.

For companies that don’t want to outlay capex to acquire an embedded solar system for their building, a financed solar solution is a great way to enjoy the benefits of solar – including reduced electricity costs and carbon emissions – without the upfront capital. Solar financing options generally allow businesses to pay only for the solar energy they use, depending on the type of agreement that is entered in to. The following blog explores the various solar finance options for commercial and industrial businesses in Southern Africa.

Introduction to solar finance

Simply stated, solar finance is a way to enjoy benefits of solar PV without the upfront capital costs. Instead of owning the solar system from day 1, businesses can “rent” a custom solar system through various solar finance options. Businesses can therefore still enjoy a diversification of energy sources and reductions on energy costs, without acquiring the solar system themselves.

Solar finance could be a particularly appealing option if:

  • A business does not have capex budget for the cost of a solar PV system
  • A business has a portfolio of buildings and does not want to buy separate PV systems for each; removing the “hassle factor”
  • A business would like to achieve electricity cost savings without impacting the balance sheet
  • A business wants to plan accurately for costs of electricity and wants greater stability with regards to tariff increases

A solar finance option will still entail a custom built embedded solar system being installed on the client’s building, but instead of ownership for the system being with the building owner, it will belong to the finance provider. In this way it differs from wheeling green energy or buying renewable energy certificates. With an embedded solar system that doesn’t belong directly to the business, there is little reason to get very involved in your building’s electricity supply – as long as the power is efficient, reliable and cost effective. Furthermore, dependent on exact structure of the agreement, the solar asset remains off balance sheet, allowing for a greater return on assets.

In contrast, owning one’s own solar system means that the building will have its own embedded power generation that belongs to the business. If the business has a good Operations and Maintenance contract in place and wishes to spend Capex upfront, this is a good option.

However, business owners may want to have even less involvement: as long as the cheapest and most reliable form of electricity is available. In this case, it pays to enter into a solar Power Purchase Agreement with a company specialising in solar PV, who will concentrate on all aspects of the system’s design, operation and maintenance over the lifetime of the system. The business can thus maintain its independence, only paying for the electricity that it uses.

Market overview of solar finance options

There are three types of solar finance agreements which are generally used for commercial and industrial business owners in Southern Africa. They differ slightly in scope and objectives, but the outcomes are similar.

  1. The solar Power Purchase Agreement (PPA).

The first and most common solar financing option is the solar Power Purchase Agreement (PPA).

A business who enters into a PPA agreement will only pay for the electricity that the system generates on a monthly basis, similar to municipal or utility power. This tariff will increase gradually over the years, but dissimilar to utility tariffs, the increases are usually at a fixed escalation that is agreed upon upfront, shielding business from price volatility.

Often  included in this agreement is an “early purchase option”, or an option to purchase the solar PV system anytime after an initial period. This enables flexibility for the business, should they decide at a later stage to purchase the system rather than continuing to pay for the solar electricity through the PPA.

At the end of a PPA term, the client is usually offered the option to purchase the system for it’s residual value or the system ownership automatically transfers to the client for no value. This is an important matter that can affect the starting tariff of a PPA and potential clients must make sure they know who the system belongs to at the end of PPA before entering into it.

  1. A roof rental agreement

A roof rental agreement is the second type of solar finance commonly used. In this type of agreement, a business leases their rooftop to a solar provider who builds a solar system and enters into a PPA to sell the energy from the system. The company entering into the PPA does not necessarily need to be the same as the company leasing the rooftop, which allows for several possible arrangements.

For example, a building owner with tenants could earn rental income from having a solar system installed on their roof and then have their tenants enter into a PPA, who would benefit from cost savings of the PPA. Alternatively the building owner can be the lessor of the roof rental agreement as well as the offtaker of the PPA and decide how to pass on the PPA savings to his tenants.

This option provides commercial building owners a yield enhancement of their property, turning previously unused roof area into income-making asset.

  1. An equipment rental/lease agreement

The third common form of solar finance is an equipment rental or solar lease agreement which is very similar to a PPA, in that a client pays a monthly fee towards the use of a solar PV system. The major difference with this type of solar lease agreement is that the fee is not linked to the output of the system but is rather fixed. In other words, the client would pay a similar amount, agreed in advance, every month, rather than paying for the energy that is generated in a specific month based on an agreed-upon tariff.  

Fixed tariff escalations: risk or reward?

For conservative business owners, signing on to a fixed tariff escalation for energy costs might seem risky. After all, what happens if the costs of state power go down significantly in the coming years?

This is a fair question, and the best way of mitigating this risk is to ensure that the fixed escalation on a solar PPA will be significantly lower, on average, than the utility’s escalation. In general, tariff escalations for many Southern African state utilities are quite high and fluctuate significantly year on year. Generally PPA tariffs increases range between 5-10% per annum, whilst Eskom and NamPower have had 10-year average increases of 13.8% and 13.4% respectively.

The graph below demonstrates the average tariff increases for South Africa and Namibia’s utilities over the last 10 years. Whilst some years, the increase was lower than the 6% increase typical of a solar tariff, the average increase is much higher than 10% (the grey line demonstrates a typical PPA tariff increase of 6%).

PPA tariff increases in South Africa and Namibia

Furthermore the discount offered by the PPA in year one offers further buffer from the PPA tariff ever crossing the utility tariff.

Conclusion

Solar financing readily makes clean, renewable energy available to a range of energy users in the commercial or industrial property environment. Offering both flexibility and stability, they are a very helpful way of promoting the accessibility of solar PV solutions to business owners across Southern Africa.

Do you have a business that could benefit from a solar finance solution? Contact us for more information.

 

Operations and Maintenance ensures that solar systems perform optimally

How to save through solar: 3 tips for commercial and industrial property managers

It’s long been known that managing commercial and industrial properties sustainably is not only about environmental, but also economic, sustainability. The good news is that for many facilities managers, managing properties sustainably can also deliver on their bottom line. One of the key areas of this is building electricity consumption – one of the largest expenditure chunks in any facility manager’s budget. As we know that reducing electricity consumption is a sure-fire way to save money, using a solar PV system to offset energy consumption makes sense. In this post we’ll explore three ways to ensure the economic benefits of solar PV are guaranteed in managing commercial and industrial properties.

Electricity consumption: a key concern for facilities managers in South Africa

In South Africa, electricity tariffs have increased on average 9% per annum for the last 5 years – and we may be in store for a further tariff increase in September due to Eskom’s RCA approval. These increasing tariff costs mean that it electricity is likely one of the top concerns for facility managers.  In fact, both cost savings and sustainability were highlighted as two “game changing” aspects of Facilities management for the next few years, according to the Facilities Management South Africa Knowledge Executive Report. With increased pressures on facilities managers to deliver high quality service at a reduced cost, electricity savings are imperative for facilities managers.

Much of this pressure has lead the property sector to invest in solar PV. Grid-tied solar PV systems can save properties between 20 – 40 % of their total energy consumption, making them an attractive option for saving energy costs. Increasingly, property companies and Real Estate Investment Trusts (REITS) are rolling out portfolio-wide solar PV interventions. The reason that this is so attractive is because of the rapidly decreasing prices for PV technology over the past few years, causing the costs to fall by 80% since 2009.

However, in order to make sure that a solar PV intervention actually saves money, there are a variety of factors to consider. Below are our three tips to follow in order to maximise the cost-benefit of the solar PV investment.

Tip 1: Implement in-house energy efficiency measures first

The lowest hanging fruit when it comes to building cost saving is often implementing in-house energy efficiency measures. If you haven’t already implemented in-house energy efficiency, this is the place to start for any kind of cost-saving, but it will also help any investment in solar PV to be more cost effective. A typical solar PV system has an output which ramps up in the morning, reaches peak output at midday, and then slows in the evening, such as the red line in this graph demonstrates:

typical solar PV load

Implementing energy efficiency measures to shift some load to mid-day when solar PV is at its peak production will ensure that you will fully utilise the cheaper energy when it is abundant. As an added advantage, peak tariff times are generally in the mornings and evenings, meaning that there will be an added saving. In order to fully optimise energy efficiency, implementing electrical submetering is a helpful way to analyse the energy load and understand the main energy-guzzling activities – in a typical commercial building this will likely be HVAC (air conditioning), lighting and electrical appliances.

The benefit of analysing a building’s load and implementing energy efficiency measures before procuring solar PV it twofold: it can not only shift the load more optimally as highlighted above, but it can also ensure that the solar PV system that is procured is the optimal size.

Khayim Fredericks, National Technical manager for Old Mutual, recommends looking into energy efficiency as a first measure.

“[I recommend] looking at [your] building and asking, is my building operating as efficiently as it can be, so that the solar system can be sized as efficiently as possible? […] When we explored the solar option [at Old Mutual head office], we had already reduced our consumption from 30 – 35%”.

Old Mutual solar PV system

Tip 2: size the solar system correctly.

As mentioned above, sizing solar PV systems correctly is key to enhancing their cost-reducing benefits. When sizing a system correctly, there are several factors that need to be understood, including:

  • The required energy load. This includes a thorough knowledge about the amount of energy that the building uses on a daily basis, including seasonal variations and power required.
  • The tariffs that apply. It is important to understand the energy tariffs that apply to the building, including what their tariff structure is and if peak demand charges apply. This will help when designing the solar system to see if excess energy stored in batteries might be cheaper than peak-demand municipal electricity tariffs.
  • High-rise, large commercial office blocks typically have less rooftop space available than sprawling retail centres. Understanding what roof space or ground is available around the commercial property is an important aspect of designing the solar system and its size.

What is wheeling?

Wheeling is the process of using energy from a location where it is not produced. Due to the way in which cities are set up, wheeling has great potential as it will enable building energy users with more roof space but less energy requirements, such as distribution centres or warehouses, to transfer power into energy-intensive urban hubs.

Tip 3: Add Operations and Maintenance into your ongoing energy costs.

Like any asset, the operations and maintenance of an installed solar PV system is paramount. Monetary savings generated by solar PV systems will be consistent if and Operations and Maintenance plan is followed. Factoring in the costs for operations and maintenance in the overall IRR of the solar system is important, because it will allow diagnosis of any possible problems early and thus ensure that the system continues to produce the predicted savings.

Make sure that you scrutinise what is included in an O&M contract. A comprehensive plan should include:

  • Access to software that provides real-time data on the production of the solar system
  • Remote monitoring and corrective action, when required
  • Access to technical staff who are able to assist with problem solving
  • Collating, analysing, and reporting on monthly and annual data
  • Inspecting the site and/or replacing components
  • Cleaning of the modules

A comprehensive Operations and Maintenance arrangement for your solar PV system will ensure that the system is running smoothly without you spending time diagnosing and troubleshooting, should there be a problem.

Operations and Maintenance ensures that solar systems perform optimally

By implementing in-house energy efficiency measures before procuring a solar system, sizing the system correctly for your load, and employing a comprehensive operations and maintenance plan, you will ensure the economic savings of a solar PV system on a commercial property.

solar PV for commercial and industrial property

Installing solar on your commercial or industrial property? 6 questions you need to ask

Installing solar PV systems on commercial or industrial property has become a commonplace practice, given that property investors generally look at the long-term value of their assets. Since solar provides consistent, affordable and clean energy over a 25 year lifetime, it is not surprising that commercial and industrial properties are investing in solar. However, given the flurry of investment, there are many solar system providers – and even more opinions around what is important when installing a solar system. Investing in solar PV is an incredible investment, if it is done correctly, but as someone specialising in property development, you might not know how to judge if a solar system will be done in a way that ensures optimal ROI (Return on Investment). In the following blog post, we explore 6 different questions that are essential to commercial and industrial property owners when going out to procure a solar system.

A beginners buying guide to C&I solar PV – the essential components

At its most essential, a solar PV system harnesses the energy of the sun and converts it into electricity for use. However, in terms of how this energy is harvested and when and where it is deployed, there are a range of variables that can significantly impact both the cost and the output of the system. The first step to understanding if your commercial property would benefit from solar is to understand your energy tariff. By doing this, you’ll be able to see if a typical solar tariff will beat what you’re currently paying. In order to find out the detailed costs and expected returns on a solar project for a commercial or industrial building, you would then need to commission a feasibility study, or solar proposal, that will show some basic figures on the return for your property.

There are a few essential components that should be covered in a solar feasibility proposal:

  • The size of the system (DC) and the proposed output (kWh). This is a basic indication of how much power the solar system would output based on the size of your building. There are various different ways that this can be optimised – which will be explored later in the post.
  • What the system will cost, given a comparative option of upfront capital cost (capex/ EPC cost) or a financed solar solution (PPA). This would show what the ROI would look like on various options and help you decide what is most relevant to your building and business model.
  • If you have load data for your building or facility, a good feasibility study should include a load analysis. If no load data was provided, the study should explicitly say this, so that there is no confusion as to the accuracy of the figures in the proposal.    

Once you have received a feasibility study on your commercial or industrial property, it is important to make an informed decision on the procurement of the system – and that’s where this article aims to help. The following 6 questions to ask when buying solar for commercial and industrial property should guide your thinking:

1. What is the optimum size of the system?

It may seem obvious, but the size of a solar system is one of the most key aspects of ensuring that solar PV works for your business. This is because there are several factors – such as operational requirements, roof space, reliance on diesel, etc., that all factor in to the optimal size for a PV system. When assessing a solar feasibility study, it is important to check that there is optimal configuration of the system design: that all components deliver their maximum value and make the system more efficient.

For example, you can get optimal value from solar inverters by making sure that they are not overloaded or operated outside of the manufacturers instructions. Similarly, solar modules might perform more efficiently if surrounded by a cool breeze. When assessing the property’s energy load profile, it also might add value to slightly oversize the system, or incorporate a small battery, in order to reduce the property’s demand charges (more on this later). By paying a slightly higher fee for the added components, the saving on demand costs could be significant, depending on the tariff structure and the building’s operations.

Value engineering will ensure that environmental factors, energy load, building design and component functionality are all taken into account to ensure the most efficient system size for your property and budget.

value engineering ensures better cost effectiveness for solar PV on Commercial and industrial property

2. Will the system meet legal requirements?

This question is almost as obvious as the first question but it is one that is, surprisingly, often overlooked. There are a large amount of compliance and legal standards when it comes to installing a solar system, and in order to make sure they don’t have any legal hassles, commercial property owners need to make sure that the solar system provider will ensure compliance with all relevant requirements.

Compliance with legal perimeters changes in each country, so the service provider will need to be familiar with the requirements for each particular property location. In South Africa, the following basic compliance rules apply:

  • Solar PV systems under 1 MW in size must have embedded generator approval from the relevant municipality
  • In some municipalities you may be required to go through a building plan approval process, especially for carport or ground mounted installations
  • For solar PV systems over 1 MW, the current legislation stipulates that these systems must have an electricity generation licence  from Nersa (the National Energy Regulator of South Africa). However, it is expected that this process will become slightly easier for projects between 1  – 10 MW in the coming months
  • If it is a battery coupled or off-grid system, it currently does not have to be registered, however this might change in the future depending on how Nersa regulations are updated going forward
  • The system should also meet technical compliance standards. It is important, for example, that the system is compliant in terms of technical regulations for electricity connections – (NRS regulations 097-2-1 – grid connection of embedded systems). A qualified electrical engineer is needed to sign off on this.  
  • Structural compliance – ensure that the structural design of the system is signed off by a professional engineer (Pr Eng).
  • Some PV installations may require additional regulatory approvals such as environmental impact assessments, rezoning, etc.

3. What do good quality components look like?

From just a simple Google search for solar panels, one will realise that there are a range of manufacturers out there, and trying to find the best quality vs price components can be daunting. The most important thing to evaluate when looking at the type and quality of components used in a solar system proposal is that the warranties and guarantees meet the requirements of the length of the investment. In terms of investing in a solar PV system for a commercial property, this usually means 20 to 25 years.

  • Solar modules or solar panels form the basis of your investment. Generally, solar modules come with a 20 – 30 year performance guarantee. Mono-crystalline solar panels are typically more efficient than polycrystalline, but tend be be slightly more expensive. Also, make sure that you differentiate between performance guarantee (the guaranteed efficiency of the panel during its operational life) vs product guarantee (the manufacturing or workmanship guarantee on the panel itself).
  • Inverters convert the DC electricity to AC and integrate this into the building’s energy supply. Typically, inverters carry a 5 – 10 year guarantee, which can be extended.
  • Batteries are another component that you will want to ensure are of good quality, if they form part of your system. Remember that how batteries are managed will also ensure that they carry a longer life span. Battery technologies are advancing rapidly in terms of cost and robustness, and are now available with warranties in excess of 10 years.
  • Also make sure that the feasibility costing includes provision for the installation of weather and monitoring instrumentation that will allow you to track the performance of the system over time.

Solar PV module and mounting system

 

4. How has the performance of the system been guaranteed in the short, medium, long term?

In addition to component guarantees, it is also useful to take note of overall guarantees of the system for the long, medium and short term. A solar system installer may have an overall efficiency measurement or performance ratio by which they guarantee the system. For example, they may measure the ratio between the total amount of available insolation (solar power) on your property’s site, vs the usable power coming out of the system (DC).

The solar proposal should also include a Internal Rate of Return or IRR. As those in the commercial and industrial property industry will be well aware, IRR is the rate of return on investment that will be achieved by investing capital in a solar asset, over the lifetime of that asset. IRR can also be calculated during a specific timeframe, for example, the first 10 years of a solar system’s lifespan.

When it comes to signing a financed solar system or a Power Purchase Agreement (PPA) with a solar solutions provider, IRR would not be relevant. Instead, the savings from solar energy would be calculated as a monthly operational saving, based on the expected tariff increases.

5. How will you measure ongoing performance and ROI on your solar system?

Like any asset, solar PV systems need ongoing care and maintenance in order to retain their optimal performance. When evaluating  the purchase of a solar solution the provision and associated costs of Operations and Maintenance (O&M) is an essential component to consider.

Not only will investment in O&M diagnose any possible problems early through continual real-time monitoring, it will also ensure that the system continues to produce the predicted savings and ensure the overall financial case of the project.

When evaluating an O&M offering, make sure that there is regular reporting and site inspections and the option of accessing live data on the solar system, such as through a client portal. Keeping track of the solar system’s historical performance through regular reports will help you to look at the savings and ROI over time and to make more accurate predictions of future performance.

If your solar system is on a PPA, you will not be directly responsible for its ongoing maintenance and operations. However, you should still request ongoing reports to track your savings comparative to your alternative power options.

ongoing solar operations and maintenance is essential for Commercial and industrial property

6. Will energy storage improve your solar system?

Although batteries have historically been expensive additions to solar PV systems, it is now essential to ask about energy storage when thinking about a solar system for your commercial or industrial property. The prices of batteries have rapidly decreased and often can ensure a more efficient use of the abundant solar resource. Whether you originally planned to include batteries in the system or not, it is worth asking about when evaluating a new solar proposal.

How could combining solar PV with batteries and/or generators improve the overall business case? It depends on your specific building and load profile – for example, peak shaving can help to push overall tariffs significantly lower and change the business payback of the solar PV system significantly. Similarly, for retail centres and remote industrial or mining properties, batteries can allow a totally islanded or microgrid solution.

That concludes our list of 6 questions to ask when installing solar PV on commercial and industrial property. Like any large asset, investing in a solar PV system requires careful decision-making and evaluation. If you have a commercial or industrial property that you are interested in converting to solar power, try our online feasibility tool.