On 31 March 2015 the managing director of Watermill Press hit the switch to his new solar-power system, an array of 750 bluish-black panels raking across the 3,000m2 roof of his factory. This, he reckons, is the biggest solar panel scheme in Bradford city, but it’s not all fun in the sun in West Yorkshire – seizing the solar opportunity throws up operational challenges and upfront costs.
The challenge
For businesses hot on corporate social responsibility and issues of carbon footprints, pollution and climate change, solar energy use is an option rising evermore prominently on the ethical horizon. And if you’re Watermill Press, there’s an added business-credibility incentive.
“We get quizzed more and more frequently by our blue-chip customers about the environment and carbon footprints, so taking the solar option is a wonderful selling-point and another way of differentiating yourself from the crowd.”
And then of course there’s the economic argument. For a company like Watermill Press, one of the UK’s largest dedicated plain label facilities that last year made more than 100 million pallet labels and over a billion case- and traded-unit ID labels, electricity is expensive.
So why not cut bills by switching to solar power, especially if your company’s “traditional square box industrial unit” means a substantially sized installation is possible? This time last year Watermill Press started seriously looking at the solar option. It was already using green electricity supplier Good Energy, and paying around £30,000 a year in bills.
“We looked at wind turbines, but there were big planning implications for our site while the energy generation would not have had a big impact on the kind of consumption we needed. We also looked at biomass boilers but were put off by lots of negative press on reliability and the service requirements of the boilers. Solar won hands down; there didn’t seem to be a downside.”
There could have been plenty of downsides, however, if Deacon had chosen the wrong contractor, which is why he drew up a tender list and then shortlisted three suppliers to give detailed, in-depth presentations backed up by third-party testimonials and word-of-mouth feedback.
“For most businesses this is a once-in-a-lifetime experience and the technology behind solar power is new and unknown . You are therefore very much in the hands of the experts, so it is vital to get the right contractor.”
The method
Leeds Solar, eight miles away from Watermill Press’ Bradford base, won the competitive tender and that was all it had to win. Unlike wind turbines, there were no planning hurdles: solar panels on most commercial buildings are deemed ‘permitted development’ by local authorities.
On to the Bradford site came the hard hats of Leeds Solar, but before those 750 panels could go up, the roof had to be reconditioned. The truss-and-beam profile was strengthened and the gutters replaced before roofing material with a 25-year guarantee went on top.
“We made sure the roof was in absolutely tip-top condition, and this prepping was the longest job, taking four to five weeks. The panels took only two weeks to put up, and then we had internal wiring to connect a bank of inverters that capture the electricity and turn it from DC to an AC supply.”
The only significant IT requirement was monitoring software, so Deacon’s team can see what it is generating, using and exporting back to the grid. Like other solar converts in the region, Watermill Press has to declare what it generates to its local distribution board, the Northern Powergrid.
And like solar converts all over, output and capacity of systems are important to the government when it comes to totting up feed-in tariffs (FITs) to work out how much it will pay for electricity generated by the likes of Watermill Press.
The FIT system pays the printer for everything it generates and whatever it exports back to the grid. The initiative, launched several years ago to coax more people like Deacon to take up renewable energy, compensates them via subsidies for installation costs.
Those costs for Deacon’s company totalled about £100,000, four fifths of which went on the solar system, with the remaining £20,000 paying for roof work and wiring by Hodgson Ellis Electrical. When it came to working out performance and the payback period, it worked out at 100MW per year, equivalent to powering 25 houses for 12 months, with a payback period of four years.
The result
However, in the seven months since Deacon flicked the solar switch for the first time the system has overperformed by around 15%, meaning the estimated payback time for the £100,000 investment is closer to three-and-a-half years thanks to reduced energy bills and FIT payments.
“Since the end of March, we have been generating 110%, in other words we are covering all our consumption in the factory and exporting the extra to the grid. This will drop over the winter, but over a 12-month period, the system should produce about 80% of the factory’s electricity, taking a huge bite out of that annual energy bill while saving 52 tonnes of CO2 a year.”
The one cloud on the solar horizon is that FIT scheme. It comes to an end next year, which is bad news not only for those following Deacon’s path, but also for Deacon himself. Although the FIT will end only for newcomers to renewables, meaning that Watermill Press will still be entitled to its subsidies, winding down the scheme could all but kill off the solar sector, he fears.
“In the last two weeks three or four solar companies have gone bust; my worry is future deployment will be choked off and we will lose skills. Solar is a long-term option – we’re on a 20-year fixed contract – and our installation needs maintaining, but who will do it? I’m worried this sector is collapsing.”
It will also stretch out payback periods, already long enough to make some printers stall, for newbies he reckons: “A four-year payback makes sense but it’s at the limit of what a business will take for a capital investment. If payback periods become eight to 10 years, I can’t imagine a lot of companies wanting to take that on, but that’s what it will be, I suspect, when the FIT goes.”
For Deacon this is not just business, but political disaster: “The system worked very well for many years and helped put the country ahead of targets for the amount of energy generated from renewable sources. FITs have been very successful, but now the sector is about to fall off a cliff.”
It hasn’t dampened his enthusiasm for the early success of his solar gamble: “In the first few months we have generated more than we’ve consumed, which is what the contractor designed the system to do. If I’d known how successful it would be I would have covered every inch of the roof instead of the 70% of the area that now holds panels.
“Being on a 20-year fixed contract also helps; in 10 years’ time electricity could be two or three times as expensive, making solar an even better deal,” says Deacon, whose company is also looking at reinsulating buildings to cut gas usage and has also just bought fully electric cars for its three directors.
“The panels themselves, meanwhile, are additional assets sitting on our building, adding value to the company.”
VITAL STATISTICS
Watermil Press
Location Bradford, West Yorkshire
Inspection host Dale Deacon
Size Turnover: £7.5m; staff: 26
Established 1994
Products Product identification labels for clients in the food and soft drinks industries including Marks & Spencer, Britvic, Princes Food and the Robert McBride Group
Kit 10 AB Graphic International Omega label converting lines
Inspection focus Converting your business to benefit from solar power generation
TOP TIPS
Choose your contractor carefully. Take up references and testimonials and make sure the supplier is “very very knowledgeable and has a track record of similar projects to the one you want in terms of size and power generation,” says Watermill Press managing director Dale Deacon.
Make sure the roof is in good shape. “The last thing you want with a big system on an industrial roof is to put up panels only find you have a leaky roof, which you can no longer access because it’s covered in panels,” advises Deacon.
Don’t dismiss the idea of solar panels if you have to borrow money. “We were lucky and had cash reserves but even if we didn’t, the technology made such strong commercial sense for us we would have borrowed money, especially as costs of the systems are coming down.”
Check projected pay-back periods. Bear in mind that the government’s feed-in tariff (FITs) scheme is due to be scrapped next year and this is likely to stretch out pay-back periods. According to Deacon’s reckoning, abolition of FITs “will have a big negative impact on the solar industry”.
Market solar power well. Target customers and other stakeholders. For most print businesses corporate social responsibility and carbon footprints are big issues, so promote what you are doing and what you will achieve in terms of reduced sustainability, and play up how it differentiates your business from rivals.
