closing the deal - selling solar to commercial customers
DESCRIPTION
Presentation by Rajiv Bhatia of Alternergy on how to sell solar PV to commercial customers. UK solar rooftop market, challenges & opportunities, return on investment, selling to the customer, installer success factors.TRANSCRIPT
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SELLING TO COMMERCIAL CUSTOMERS
Alternergy & Zeversolar Installer Event
Rajiv Bhatia, Alternergy Ltd
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Established in 2006, Alternergy is a top 3 UK solar distributor and the
highest ranking supplier dedicated solely to PV technology
ALTERNERGY –
QUALITY GREEN ENERGY SUPPLIERS
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“We want to move the emphasis for growth away from large solar
farms and instead focus on opening up the solar market for the UK’s
estimated 250,000 hectares of south-facing commercial rooftops”
- Greg Barker, April 2014
UK GOVERNMENT PLEDGES SUPPORT
FOR UK ROOFTOP MARKET
• 250,000 Hectares of commercial roof space available
• Rooftop installations up to 1MW will no longer need planning
permission
• DECC pledges to explore how Green Investment Bank funding
can help support PV in community projects
• The Government aims to install 500MW of solar on it’s own
buildings before the next election
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UK ROOFTOP MARKET
PROVIDES GREAT POTENTIAL
Solarbuzz predicts 0.5-1GW over next 2 years
Source DECC
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• Government pledges up to 1GWp solar on it’s own land which will
“engage with full range of industry players, large and small”
250MW commercial rooftop by next election
Solar Strategy - a definite move away from Solar Farms to Rooftop
solar
Industry and commerce operating as independent generators, to
create a “Big 60,000” – solar PV can be at the centre of this change
• Opportunities for new business models
Combination with energy storage
Generate and use electricity in situ – distributed energy
Energy efficiency
Consult DNO if they require a mechanism to limit maximum export of
energy into the grid i.e. larger systems could be installed
• Potential customers: retailers, supermarkets, shopping centres, car parks,
hotels, offices, civic buildings, farms, IT server centres, depots
COMMERCIAL SOLAR –
ATTRACTIVE TO NEWCOMERS?
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Challenges
• Landlords and Tenants
• Roof Warranties & Liabilities
• Asbestos
• PPAs (DNO/Tenant)
• Obstructions and shading
• Maintenance costs
• Relatively small projects
• Financing
• Changing Government
policy
CHALLENGES VS OPPORTUNITIES
Opportunities
• Higher PPAs and subsidies
• No/ low planning risks (up to
50KW, maybe 1MW)
• Simpler design, faster installation
• Higher ROI (FIT & self
consumption)
= Better deal for owners & tenants
= Better margins for installers
= Long term sustainable business
model for all!
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RETURN ON INVESTMENT
15.40% 600 650 700 750 800 850 900 950 1,000
£800 16.60% 18.40% 20.20% 22.01% 23.83% 25.69% 27.57% 29.49% 31.45%
£900 14.19% 15.80% 17.40% 19.00% 20.60% 22.21% 23.83% 25.48% 27.15%
£1,000 12.24% 13.71% 15.16% 16.60% 18.04% 19.48% 20.92% 22.37% 23.83%
£1,100 10.61% 11.97% 13.31% 14.63% 15.95% 17.26% 18.56% 19.87% 21.18%
£1,200 9.21% 10.49% 11.75% 12.98% 14.19% 15.40% 16.60% 17.80% 19.00%
£1,300 8.00% 9.21% 10.40% 11.55% 12.69% 13.82% 14.94% 16.05% 17.15%
£1,400 6.93% 8.09% 9.21% 10.31% 11.39% 12.45% 13.50% 14.54% 15.57%
£1,500 5.98% 7.09% 8.16% 9.21% 10.24% 11.25% 12.24% 13.22% 14.19%
£1,600 5.12% 6.19% 7.22% 8.23% 9.21% 10.18% 11.12% 12.06% 12.98%
£1,700 4.33% 5.37% 6.37% 7.34% 8.29% 9.21% 10.12% 11.01% 11.89%
£1,800 3.62% 4.63% 5.60% 6.54% 7.45% 8.34% 9.21% 10.07% 10.91%
£1,900 2.96% 3.94% 4.88% 5.80% 6.68% 7.54% 8.39% 9.21% 10.03%
£2,000 2.34% 3.31% 4.23% 5.12% 5.98% 6.81% 7.63% 8.43% 9.21%
£2,100 1.77% 2.72% 3.62% 4.48% 5.32% 6.14% 6.93% 7.71% 8.47%
£2,200 1.24% 2.16% 3.05% 3.90% 4.72% 5.51% 6.28% 7.04% 7.78%
£2,300 0.74% 1.65% 2.51% 3.35% 4.15% 4.93% 5.68% 6.42% 7.14%
£2,400 0.27% 1.16% 2.01% 2.83% 3.62% 4.38% 5.12% 5.83% 6.54%
£2,500 -0.18% 0.70% 1.54% 2.34% 3.12% 3.86% 4.59% 5.29% 5.98%
Co
st
Pe
r K
ilo
Wa
tt
Electricity Yield: Kilo Watt Hours Generated Per Kilo Watt
100 kW System
FiT: 10.71p | ROI: 15.4%
250 kW System
FiT: 6.61p | ROI: 9.4%
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Based on:
50% Self Consumption only
Energy Inflation of only 4% pa
Energy Yield of 850 kWh per kW
8 pence per kWh electricity cost from DNO
• Higher Self Consumption of 80%, higher energy yield of 900
kWhrs and an energy inflation rate of 6% would provide an
ROI of:
20.1% (100 kW) and 14.3% (250 kW)
• Increase in value of property for the building owner
• Security of supply for the tenant/ user i.e. energy costs are
kept low
• Protection against future blackouts and brownouts from 2016
when power plants start getting decommissioned
RETURN ON INVESTMENT
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• Find a superhero! Engage management - Rising energy prices are the number
one concern for European households
• Think of the customers objectives
minimal energy bills
maximum financial returns (demonstrable ROI) – we can help
low carbon/ eco friendly/ corporate social responsibility?
• Counter arguments
Energy prices are rising rapidly
NIMBYism should prevent fracking - hugely contentious; will not save us
Middle East and Russia are not stable energy producing areas
Nuclear is still not an agreed option – massive lifetime maintenance costs
Security of Supply – power plants being decommissioned 2016 onwards
• Ask the customer: What would you need in order to make a decision today?
Draw out their objections
• Quality products will last 20/25 years - security & reputation – Would you buy a
Dacia car if you could buy a BMW for an extra 10%?
SELLING TO THE CUSTOMER
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• How do I measure ROI?
• What happens if something goes wrong?
Contract should cover this
Who is responsible? – Landlord, Tenant, Installer?
Insuring the System – Critically important
• What happens if I want to sell the building?
• Provide roof warranties and insurances
• Roof Condition: What happens if we need to fix the roof?
• Monitor performance
• Provide yield and installation warranties
• Learn how to make successful Ofgem application
THE DEVIL IS IN THE DETAIL
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INSTALLER SUCCESS FACTORS
• Diversify product portfolio for lots of roof types
• Health & safety - ensure it meets European standards
• Optimisation - make suboptimal rooftops accessible
• Monitoring - work with smart technology
• Work with partners who are reliable, with a UK track record
• Use quality products with a secure warranty
• Get the message out there
• Talk to us! We are experienced in delivering commercial
systems and can help you through the process
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We put the needs of the installer first. We will go the extra
mile to demonstrate our commitment to you because we think
that’s important.
“ ”