One way to lower energy costs is to produce your own energy. However, until recently, doing so has been expensive.
Now, as the latest generation of solar, wind and digester technologies combine with power storage, is on-site energy generation within reach of every business?
The answer seems to be yes. Renewable technologies are already providing on-site power solutions to manufacturers, retailers, and other businesses, and are proving adaptable solutions for businesses concerned with cutting their power bills or considering a combination of power and heat solutions.
David Lewis, managing director at energy management company Matrix, an E.ON business, explains: “On-site generation solutions vary in scale, complexity and cost,” and can be engineered to fit the specific requirements of each and every business.
An on-site solar photovoltaic (PV) solution, which gathers solar energy and cuts reliance on expensive power imports from the grid, is a great solution for many companies that are seeking to cut their power bills. What’s more, as with many on-site energy generators, any surplus can be sold to the grid, boosting revenues.
However, in the UK’s often sun-deprived climes, many organisations interested in generating large quantities of their own power and heat would be best served by investing in a combined heat and power (CHP) solution.
Already, Newcastle United and Coca Cola have made such investments. However, such kit – miniature power plants, essentially – doesn’t come cheap.
Mr Lewis cautions: “For this type of installation to be cost-effective the heat and power produced needs to be fully utilised, or the potential financial benefits of the solution will be reduced.”
As you might expect, costs for on-site power generation vary according to technology and type of site, which means the choice for any business will come down to their own particular cost-benefit calculation.
As Mr Lewis notes: “A typical business will expect any such investment to have a fast payback of around three-years.” In many cases, even the most modern on-site generation solution cannot meet this threshold, and therefore alternatives should be considered.
The demand persists though, and to meet it, the energy company E.ON can offer some of its business customers financing for CHP generation technology on their sites and enabling them to sell any resultant electricity and/or heat they don’t need back to the grid.
The businesses can even use this method to help pay off the initial investment in the low-carbon technology, which currently takes between seven and 15 years.
“The magnitude of the savings will vary from site-to-site and according to the type of site activity,” says Mr Lewis, as every business has different energy demands across a single day.
However, E.ON has already worked with businesses from schools to shops and factories to install a range of on-site systems.
Among the long-term benefits businesses can expect from producing their own energy are lower operating costs that can have a tremendous impact on the bottom line – useful for energy-intensive businesses such as manufacturers.
Another bonus is long-term energy security in the face of expected rises in wholesale and distribution energy costs.
The higher the load expected from on-site power generation, the more important its proper management becomes.
For instance, should a business’s energy CHP plant produce excess energy that isn’t sold on, it will simply go to waste, and it’s unlikely the business will see any savings at all.
As a result, despite the promise of the range of products on the market, it pays to take on expert advice both before investing in such technology, but also in its long-term management.
“As with much technology, one can always defer the decision to buy,” says Mr Lewis. While businesses certainly shouldn’t leap into investing in technologies they don’t fully understand, he does warn against any complacency in potentially slashing their energy expenditure.
“The longer any investment in technology is delayed,” he notes, “the longer the customer is foregoing potential financial benefits.”