December’s COP21 climate agreement in Paris is driving increasing demand in commercial rooftop solar installations despite a fall in feed-in tariff payments, a conference panel has said.
Speaking at the Solar Finance and Investment conference, which concluded in London yesterday, Lark Energy chief executive Jonathan Selwyn said that in the wake of the Paris summit, big corporate firms were now taking their carbon commitments more seriously.
“Do not underestimate Paris… pressures in the [solar] supply chain are being driven now by big corporates and their customers are telling them they need to do it now,” he said.
Despite the government having previously said it intended commercial rooftop installations to be a priority – something which Selwyn claimed the government has now “changed its mind on” – feed-in tariff rates for commercially-sized rooftop installs under the new regime range from 2.7p/kWh to 0.87p depending on their size.
Despite the 60% reduction in rates, Selwyn claimed businesses had not been put off installing solar but instead have changed the way in which installations are sized to promote as much on-site consumption as possible.
Selwyn added that with the feed-in tariff now much lower, overly-sized systems not designed specifically for a business’ energy demand would result in lower returns, and therefore fail to attract the attention of financial directors looking for payback periods of three to four years.
The key is to now associate the system’s size with demand to maximise on-site consumption. In doing so, Selwyn said, corporations could achieve IRRs of up to 12% even without the feed-in tariff, which he said had become something that’s “incredibly complicated on top of something that’s already complicated”.
For additional information on rooftop solar installations, how they can help your business and what to look out for, download Solar Media’s buyer’s guide here.
