SELLING TO COMMERCIAL CUSTOMERS

Alternergy & Zeversolar Installer Event

Rajiv Bhatia, Alternergy Ltd

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

“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

UK ROOFTOP MARKET

PROVIDES GREAT POTENTIAL

Solarbuzz predicts 0.5-1GW over next 2 years

Source DECC

• 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?

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!

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

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Pe

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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%

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

• 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

• 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

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

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.

“ ”

rajiv@alternergy.co.uk