Cool £200k investment in PV pays off for vegetable producer

G Growers PV rooftop Lark Energy

Property consultancy Carter Jonas’ 2015 energy index found that rooftop photovoltaics (PV) is a wise investment. Vegetable producer G’s Growers is reaping the benefit at its cold store in Ramsey, Cambridgeshire, writes Mike Hardware.

With an investment of £200k, the company installed 239kW of solar panels to generate power for the site. They produce a 19% return on capital, providing a payback of around five years, but the panels are expected to continue generating electricity for a further 20 years after that. The electricity supplied meets an average of 8% of the site’s need, reducing energy carbon emissions by the same amount, and benefits from a Feed-in Tariff payment of around 11p per kWh for a total of 25 years, the approximate working life of the panels.

The case for PV

Kieren Drane, operations manager at G’s Growers, explained that the company has been producing fresh vegetables for some 60 years. It is committed to reducing its carbon emissions by 30% by 2020 and has achieved ISO14001 accreditation. He said: “We were looking at ways to both improve sustainability and at the same time save costs. Incorporating solar at our cold store in Ramsey was an ideal application for solar PV: the store was a high energy user, particularly in the summer, and had a large roof.”

“The subsidies certainly helped make the business case for the application, providing an additional stimulus to make the investment.

“None of our electricity is exported, it is all used on site, accounting for between 16% and 20% of the site’s consumption, averaging at 18%. The offset cost savings are very significant, as are the carbon emissions savings.”

Solar specialist Lark Energy Commercial installed the project. Managing director, Jonathan Selwyn, said: “This project is an excellent example of how solar can bring clean power to an energy intensive site, significantly reducing costs and carbon emissions. We also had to convince UK Power Networks, the distribution network operator (DNO), that the project would not have a detrimental impact on an already overloaded local grid. To do this, we agreed to install remote management hardware for the DNO which could turn off the system’s export capacity in an emergency, the first time such a system had been used in the UK.”

G’s Growers is planning to install a further 240kW on an adjoining building to further reduce the site’s carbon footprint, and save more money. Drane continued: “I would certainly recommend other food producers to consider solar PV. Many plants, not just cold stores, typically have large ‘sheds’ ideal for mounting solar panels. With energy use in the building transmission loss will be minimised, allowing a significant offset of imported electricity as well as securing an additional income stream.”

Cloud on the horizon

The installation does, however, come at a time when government is looking to significantly cut support for solar and other renewable technologies. In July it announced plans to close the Renewables Obligation (RO) support scheme early for solar farms and commercial rooftop projects of less than 5MW. The Feed in Tariff support scheme is also under review and larger scale commercial applications, such as G’s Growers, may well be included in any proposed cuts.

The government is justifying its approach on the grounds that solar has proved too popular and deployment has greatly exceeded its forecasts. As a result, the contribution to solar support through energy bills has been greater than expected.

The industry argues that the impact of solar support on bills is greatly exaggerated. It currently costs just £10 per year on consumer electricity bills, less than £1 per month. If the government made no changes, it would add just a further £2 a year to bills by 2020.

Instead, and in the words of the Energy Secretary, solar should be seen as a great British success story. It already provides 8GW of power, enough for 2.6m households annually. It produces energy when industry, schools and hospitals need it. It supports 30,000 jobs and contributes £10bn to the UK economy.

The timing of the government’s action is also perplexing. Falling costs and increasing efficiency means that the industry is close to being subsidy-free. Removing support too soon will cause the loss of skilled jobs and halt the cost reduction trajectory. Selwyn said: “The solar industry is making rapid progress in reducing costs, and will become the first energy source to be subsidy free by 2020.

The country desperately needs new power generation. The government’s surveys suggest that 80% of the public want more solar. It can deploy very quickly and, together with the great strides being made in other renewables and battery storage, could well provide the future baseload required at a fraction of the cost of nuclear. It is on track to be the first subsidy-free energy source before the next general election.

“We would urge the government to provide stability and certainty for the industry as we make the final journey to zero subsidy. This will enable us to continue to provide significant new clean energy capacity and maintain the many thousands of jobs in the sector.”

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