Buildings-based solar installations

Steve Gummer and Steve Cirell set out the key considerations for solar installations covering buildings.

This year under the Green Steve’s programme we are going to focus on two key areas, the first of which is solar energy.

Introduction

The intention is to explore solar PV projects and take a deeper dive into the issues involved and how to steer a successful project through delivery. As the energy crisis last year bit deeper, many more local authorities looked at the potential for solar and these papers are intended to assist them in formulating plans and driving them forwards.

The first paper in the series considered Government policy and its importance in retaining the UK’s leadership role, as well as giving the markets confidence to invest in the green agenda. The second paper looked at the other end of politics i.e. strategy at the local authority level. This is where real-life projects are forged and brought into delivery.

The last paper in the series and this one, move on to more detail about solar installations, the last one covering solar farms and this one covering buildings. Whilst the basics are the same for any type of solar PV installation, there are quite a few differences between these two, justifying a paper on each.

The third paper in the series covered the science of solar PV and also the irradiance and the six key factors that determine its levels. This paper will take those factors as read, but a refresher is available here.

Which buildings are covered?

In defining buildings-based solar PV, we mean any normal civic building (whatever its use, which could range from office, community centre or depot), social housing and car ports. Each of the three are slightly different and are covered below.

Civic and commercial buildings

It was mentioned in Paper 3 in this series on solar farms that there are some key differences where buildings are concerned. Some of these are practical (see below) but some are strategic. Normally, solar farms and buildings schemes have a different purpose. Solar farms are to generate electricity in a semi-rural location and to pipe it into the grid for onward transmission to a user, normally to derive a financial reward and a carbon offset.

On the other hand, buildings projects are normally driven by factors of regeneration and energy efficiency. The electricity generated is almost always used on site and often a carbon offset is not available.

Practical issues

We have previously explained the fact that solar power is derived from irradiance i.e. the daylight generating electricity via the movement of electrons in a solar panel. However, the amount of irradiance will vary depending on those six key factors. With building-based solar installations there is less flexibility with two of the key factors: orientation and tilt.

Whereas ground-mounted solar PV can be pointed any way desired in terms of orientation, a building by definition has a roof and the panel is normally attached to that roof. This means that orientation is not so easily controlled. Moreover, the roof already has an angle in its construction and the panels have to match that angle for planning purposes, meaning that this might not be optimal either.

This effectively means that north-facing buildings are not suitable for the fitting of solar panels. The tilt issue is less serious, although radically steep or very shallow roofs will not offer the same amount of efficiency.

Components

The same components are in operation here: panels, racking, cabling, inverters and metering. As indicated above, the panels are normally on the roof, whereas the inverters and metering are normally fitted inside the building.

Grid connections

If a building has plug sockets and lights, it must have a grid connection. However, it is not that straightforward in terms of connecting solar panels and the relevant Distribution Network Operator still needs to grant consent to connect a system to the grid.

The complication is not so much in the generation element as in the export element. It is rare to match solar generation perfectly to the use of the building and so, there will normally be ‘spill’ i.e. excess electricity that is not used on site and is fed into the grid. To achieve this, the export capacity of the existing grid connection has to be sufficient. So, an application to the DNO is still required.

Planning consent

There is also an advantage over solar farms in terms of planning. Whereas a ground-mounted installation always requires a specific planning application and consent, buildings are covered by Permitted Development rules. Under these, consent is deemed to be granted if certain conditions are met.

The law on Permitted Development is under the General Development Order, which repays careful scrutiny. These rules have been changed several times recently, such as by the Town and Country Planning (General Permitted Development etc) (England)(No 2) Order 2023, which removed the previous capacity limit of 1 MW for the solar installation.

In general terms, an installation of any capacity will be permitted on a non-protected building if the conditions are met, such as if the solar panels are fitted in such a way that they do not extent over the gutters or higher than the ridge tiles and one or two other matters.

There is still a pre requirement to notify the local planning authority in advance of a Council’s intention to fit solar PV using Permitted Development rights.

Business case

The business case on buildings-based solar is universally positive. This is because the net cost of generating electricity from a solar panel for use on site is considerably lower than the cost of purchasing electricity via a commercial supply contract. Most local authorities are now paying at least 30 pence per kWh for their power and prices are inexorably rising.

It is for this reason that the power is, therefore, normally used in the relevant building to which the panels are attached. However, there is not much point in radically increasing capacity over and above the building’s needs and so any such scheme is looking to identify the ‘sweet spot’ where the maximum value can be extracted.

If a high percentage of self-consumption can be achieved, it is perfectly acceptable for the balance to be put into the grid (and for which a small payment can be attracted). This way, the capital costs are kept under control and the export issues mentioned above are minimised.

Battery storage

Of course, battery storage also works well with buildings, but this does depend on the type of building and its use. As indicated in Paper 3, batteries add to the capital costs and so are only relevant where they are needed and can improve the business case.

This means that a 9-5 office operation would not benefit from the addition of batteries, but a 24 hour workshop or emergency centre might. In the latter case the batteries charge during the day and then keep the services running overnight. In the former example, there are no services required out of daylight hours and so battery storage will not add value.

Council housing

There are still around three million Council houses in the UK that are owned and operated by a local authority (as opposed to those transferred to other social landlords). This is a huge amount of roof space that has so far been largely ignored by Councils.

A standard Council house will host between 2-4 kW of solar panels, with larger properties being able to take more and flats and other buildings less. As such, it might be surprising that more local authorities have not undertaken social housing schemes.

The reason is tenants. A large body of local government law covers housing and related matters. Under the Electricity Act 1989 consumers are heavily protected in matters of electricity supply (where commercial customers are expected to fend for themselves).

In the early days, a local authority that was quick off the blocks (whilst Feed in Tariffs still existed) could comfortably fit solar PV on its housing and make a business case just from the Government’s financial incentive payments. Usually back then the electricity was given to tenants free of charge, which evaded all the difficulties of selling to tenants. After FITs had gone and before battery storage emerged, there was no way to make a business case without selling the power to the occupants of the dwellings and Councils shunned the regulatory difficulties. These were based on the necessity for a full electricity supply licence to be obtained before it is possible to supply electricity to consumers.

With the emergence of battery storage, other options have now arisen and there are several different ways a housing scheme can be structured:

• In front of the meter. Here, the panels are fitted by the Council, but it has to partner with a registered electricity supply company, which enables the electricity to be sold to the tenant in the normal way;
• Behind the meter. To avoid the complication of a supplier being included in the arrangement, the Council fits the solar as a service (not covered by the Electricity Act) and makes the power available to the tenant on a different circuit. This means that the power has to be separately billed (meaning the tenant gets two different bills – one from the normal supplier for grid supplied power and one from the Council for the solar power).
• Electricity trading with battery storage. Here, the power is not supplied to the tenants at all and is simply used to charge up batteries with the power being discharged into the grid at peak times under complex but lucrative electricity trading contracts. The disadvantage of this option is that there is no housing or tenant benefit as such from the project.

The business case will differ depending on which way a Council decides to do it, but all three offer good opportunities.

Of the issues considered in the section above on civic and commercial Council buildings, most are the same here. An application to the DNO for grid permissions is still required. Permitted Development rights will apply to housing under planning the same as other buildings.

There are a number of special issues for housing, such as the relevance of the Housing Revenue Account. However, schemes are permissible under the General Fund to avoid such problems. Similarly, it is relatively straightforward to devise a plan to deal with Right to Buy applications. Grant funding, such as under the Public Sector Decarbonisation Scheme may also be available for such projects if this can be secured.

Car ports

The final section is car ports, which are solar panels situated above car parking spaces. Of course, local authorities have hundreds of car parks and many are suitable for this type of development. Again, most of the issues from the solar farms paper and the civic and commercial buildings section above, will apply here too.

Car ports differ from buildings and housing, having some characteristics of ground-mounted installations and some of buildings-based schemes. Which will apply will depend on the nature of the car park concerned. Park & ride sites are usually rural, meaning no use on site available and the power being inserted into the grid (like a solar farm). Where a car park is urban and next to a large civic office, it can be connected up in a very similar way to if the panels were on the building’s roof.

If a car park is rural, the power will need to be supplied into the grid using one of the three ways mentioned in Paper 3 for making the business case (private wire, sleeving or electricity trading). If a car park is situated next to a building, that is by far the best solution. There, the installation is connected via direct wire to the building and the electricity used therein, for the best – and easiest – business case.

Grid connections for a rural – and large – car park are the same as for solar farms. For urban settings it is the same as other buildings. The latest rule changes mentioned above mean that permitted development rights are now available for car ports on off street car parks at ground level.

There are also other advantages from car parks which do not apply elsewhere. These include creating the revenue from a scheme to re set the car park (re design its spaces or resurface and improve it); the potential for sponsorship and advertising; the fitting and supply of EV chargers included; and the obvious improvement of both lighting and security, particularly for female and vulnerable groups using a car park at night.

The one disadvantage of car ports is that the costs are higher than for both ground-mounted and buildings-based installations. However, this is merely because of their novelty and costs will fall as more schemes come forwards (as has been the case with other solar projects).

Two examples from local government are Leeds City Council, which opened Britain’s first predominantly solar-powered park & ride car park at Stourton in 2020. Its canopies host 1.2MW of PV modules over 480 parking bays, plus a 950 kWh battery. An early urban example is a car park development by Nottingham City Council at the Harvey Haddon Leisure Centre, where Edie reported that the Council had fitted a canopy over 40 car-parking spaces, featuring 448 solar panels, which will deliver up to 55.7MWh of electricity per annum.

Offsetting

The final topic under this banner is offsetting. As mentioned before, most local authorities with stringent climate change targets are interested in offsetting any new renewable energy generation that might qualify and reduce the Council’s carbon footprint.

Here the rules differ, depending on the nature of the installation. In short, for a building owned and occupied by the Council, fitting solar panels to the roof will not result in a carbon offset. For commercial property and housing, it will.

The reason is that where the Civic Hall is fitted with solar, the Council’s electricity usage in the building reduces and so does its electricity bill and its carbon footprint. Accordingly, that benefit cannot be double counted.

However, where the Council owns – but does not occupy – a building, does not arrange the electricity supply and does not pay the electricity bills, it will be able to claim the offset as this is new renewable energy generated by it and reducing an equivalent amount of electricity from the grid.

Conclusions

Having outlined both ground-mounted, buildings-based, social housing-based and car park canopies, local authorities are now in a position to determine which, if any, of these potential projects would be possible for development in their areas.

It can be seen that there are scores of tracts of Council owned land that would be ideal for solar farms; hundreds of civic buildings where solar panels could be fitted to the roofs; thousands of car park spaces currently open to the elements which could be improved and help the climate emergency plans; and millions of Council owned dwellings that could host solar panels for the benefit of both the Council and tenants.

Most are viable and many Councils are looking at such potential. As usual, time is ticking and those that proceed now will reap the earlier benefits. Bearing in mind that it is relatively inexpensive to determine feasibility for such projects, it is surprising how few such projects have yet been completed.

Hopefully this Green Steve’s mini series will help!

As part of our commitment to helping local authorities innovate in the green space, our infrastructure and energy partner, Steve Gummer has teamed up with Steve Cirell, a Solicitor and Consultant who independently advises local authorities on climate change and renewable energy to produce a series of thought pieces about what local authorities could be doing to further the green agenda. We hope you have enjoyed reading the forth in this series and for more please visit our Green Goals web page and follow us on LinkedIn.

For further information, please contact Steve Gummer, on 020 7405 4600.

Steve Gummer is a Partner at Sharpe Pritchard LLP.

This video is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email This email address is being protected from spambots. You need JavaScript enabled to view it.