[00:00] – Introduction

[00:15] Alec – Hello and welcome to the SME Business Show with me, Alec Drew. Each show focuses on one particular topic and so we invite an expert from that business sector to share their knowledge, insights and tips to help you to get the most out of your business. Today’s topic is solar energy for business and I’m delighted to be joined by Steven Bray, Managing Director of Alternative Energy Ireland.

[00:38] Alec – Hi Stephen.

[00:39] Steven – Hi Alec, thanks for having me, it’s great to be here.

[00:41] Alec – Let’s just talk about the sort of entrance level for people’s spend if they’re to consider or solar energy as an option?

[00:46] Steven – Yeah, it’s actually relatively low. So a business spending two to three hundred euros and upwards per month on electricity, we can design a system to suit their business, which will have quite an attractive payback period.

[00:57] Alec – And in terms of, what sectors are using solar energy?

[01:01] Steven – We’re active in lots of different sectors. Generally, any sector where they consume electricity during daylight hours are suitable for solar. Some examples where we’re active would be in hospitality sector. They’d be manufacturing sector, retail sector, and like offices, there’s a really wide range of sectors where solar energy is very suitable for.

[01:22] Alec – And of course, we won’t forget our friends down the country in the agricultural sector.

[01:26] Steven – We’re very active in the agri-sector.

[01:27] Alec – And is there any particular area of the agricultural sector that’s relevant?

[01:31] Steven – Yeah, actually, a good question. In the agri space, the dairy farmers, especially those that have moved on to robotic milking, where they replaced labour with robots to actually milk the cows automatically. They have a higher consumption of electricity. And typically the farms will have roof space to accommodate the solar array to take them. Other ones in the agri space would be grain millers. We’ve done some job, some installs for some quite large grain millers throughout Ireland. Chicken farms and also pig farms will be suitable as well.

[02:02] Alec – I think that covers quite a lot.

[02:03] Steven – Yeah, yeah. They all use a lot of electricity.

[02:05] Alec – In terms of, we’ve a rural and city divide, in terms of the city, a lot of businesses wouldn’t have a lot of roof space available to them. How can they get involved?

[02:16] Steven – Correct, yeah. The extreme example, let’s say Dublin city centre, buildings are generally a small footprint, very tall, high energy consumption, very small roof, often cluttered with plant. They’re not an ideal candidate for us, we have very few jobs done in that part of the city and it’s the same throughout any city in Ireland really. Typically once you move out away from the cities, towards the edge of the cities even at work, the buildings get a bit lower, the footprint gets a bit wider, the roof space gets a bit larger, and it leaves some space for the solar array up there. So ideally we’d be looking for as large a roof as possible to suit the energy demand, and that’s something that we’d need to look at on a case-by-case basis.

[02:55] Alec – However, there are other options if you have land around your building. You may have a small roof space, but you have land around your building.

[03:02] Steven – Absolutely, yeah. there’s two other options that just jumped to mind. One would be a ground mount system, where if you have an area of land, like grass, tarmac, concrete, can be any surface adjacent to the building, we can put a solar array there. And another one people are looking at, and we’re seeing more and more of it starting to come in, is carports, where it provides shading and some rain cover, but also makes use of the footprint, like a double use of the footprint of the car park. As long as it’s got clear skies above. So the carports are becoming more and more popular as well.

[03:32] Alec – What’s the sort of average cost and payback if we’re to consider looking at solar energy as a replacement for our existing setup?

[03:38] Steven – Costs can range quite substantially. It depends on the consumption. But a small business could be looking at somewhere around 10,000 euro. A large pharmaceutical plant could be 2 million euro. But the average business that contacts us is in the region of 40 to maybe 80,000 euro of a sale. Payback doesn’t vary as wildly. payback can be anywhere from three and a half, four years, up to maybe six or seven years in some cases if it’s a more complicated installation.

[04:04] Alec – And are there any sort of grants available?

[04:06] Steven – Yes, there are grants actually only have to been launched recently, relaunched actually for businesses. So how they’ll work is they’ll typically cover about 20 to 30% of the cost, which gets the payback down to that three and a half year kind of point for some people. It typically shaves a year off the payback and improves the return on investment. Which, yeah, there are grants available for businesses now.

[04:26] Alec – And in terms of, we’re talking about a lot of upfront costs, so are there finance options available?

[04:32] Steven – Yep, there’s a couple of different ways you can pay for solar. One is pay for it off your own balance sheets, pay for it with your own cash reserves, and you get maximum payback, maximum savings, because you’ve no interest to pay on any loan. Second option would be take out a loan, take out a finance package to cover the cost, and all you’re missing then, you have to remove the cost of interest from the savings, and that’s what the remaining funds is what you’re left with, or the remaining savings are what you’re left with. And the third option we have is a solution where we actually don’t sell the solar system to the business, we sell the electricity from the solar system to the business. It’s quite a different sale. We own the solar kit on the roof, and we would sell the electricity to the business owner in the building below that roof, through a mechanism called a power purchase agreement or a PPA. The benefits for the businesses, there’s no upfront cost. There’s nothing on balance sheet. There’s no overheads. The kit belongs to us. So the full maintenance of the kit, the full installation of the kit, the purchase price of the kit, everything is covered by us. All the business needs to do is give us a commitment to purchase in the electricity office for a period of time. That can be anything from 10, 15, even 20 years in some cases if businesses want that security. The big thing it gives is price certainty. So you know once you put that kid on your roof on day one what your energy costs are going to be for that portion of your electricity for the next 10, 15, 20 years. Whereas we all know the market varies quite wildly. I know 2022 was an extreme example with the energy inflation that took place. But those things are mitigated if you have a PPA or a solar kit paid for under any mechanism on the roof because you’re generating that power behind the meter. So it’s on site and it’s behind the meter and there’s no external factors can affect the cost of that electricity. Competitive electricity cost and price certainty with solar energy

[06:25] Alec – I mean we’re all very conscious in terms of business costs so if we went along that route, are we talking about an electricity cost that would be in excess of what I might be buying off the grid or is it actually very competitive?

[06:36]  Steven – Yeah, it’s typically less. I can give an example today, for example, purchasing electricity from the most of the mainstream suppliers, you’ll pay somewhere around 35 cents, maybe 30 cents would be an attractive price for electricity right now. And we can do PPAs where we sell the same electricity to customers coming from the solar system. So it’s green electricity as well as renewable electricity. We can sell that for somewhere in the region of about 18 or 19 cents.

[07:04] Alec – That’s a substantial difference.

[07:05] Steven – Yeah, with no upfront cost.

[07:07] Alec – Now naturally the rates of electricity fluctuate up and down, so I’m gathering that the system that you’re offering runs in tandem with that.

[07:15] Steven – Yeah, absolutely. There’s a mechanism where we can vary the price from the PPI slightly up and slightly down when the market rises and falls each year.

[07:24] Alec – All right, you’ve converted me and I’ve decided I’m going to go down this route. What sort of time span should I be expecting to, from my signing on the dotted line to having the whole system up and running?

[07:33] Steven – The sector is very busy, it’s not just us, the whole sector is quite busy at the moment. So unfortunately it’s measured in months. If you were to sign today and you had a mid-sized business, let’s say in Ireland, we would not be on site for about seven or eight months. and most of that seven or eight months is actually spent in with ESB networks gaining approval for the design of the system and seeking official approval to be able to proceed and put a solar system because it is connected to the national grid. ESB networks have a vested interest in the stability of the grid and they, just with the backlog, the ESB are struggling to turn these around in anything less than five or six months. So with that it only enters our domain after five or six months and at that point in time our Alternative Energy Ireland’s lead time is about two months.

[08:23] Alec – All right, so we could be up, but once we understand exactly what’s happening with the ESB. Okay, I’ve decided to install the system. The system’s up and running. What sort of lifespan should I expect from the system?

[08:33] Steven – Typical lifespan of a system is 25 to 30 years if you carry out the maintenance regularly.

[08:38] Alec – And so therefore, are there a lot of moving parts? Is it expensive to have maintenance carried out?

[08:42] Steven – Yeah, thankfully there’s not one moving part in the solar system. So it leads to quite a reliable system. So no moving parts, but yet there are software updates, there are basic electrical checks and cleaning the panels. We get plenty of rain in this country, but professional cleaning is recommended once a year with all systems to ensure the peak performance is maintained in the system.

[09:08] Alec – How will I know that the system is operating to its maximum efficiency?

[09:11] Steven – Good question. There’s an app, like there is for everything these days, there’s an app that comes with the solar system. You’ll have an app on your phone as a customer. We have a more detailed app on our end from a technical review perspective. So if there are any faults, you’ll get an alert. We’ll get an alert probably before you just to advise that there is something potentially amiss. And with the solar system we sell, it’s from a Dutch company called Autarco and they have a vested interest in the performance of your system because they actually give an output guarantee with the solar system. It’s in their interest and Alternative Energy Ireland’s interest that your system is performing at its peak output, otherwise the kilowatt-hour guarantee is at risk of being exposed.

[09:53] Alec – And if I’m not mistaken, I think Autarco are one of those unusual companies in the sense that they have it all underwritten by Lloyds of London.

[10:00] Steven – Correct, yeah. Lloyds underwrite the guarantee as well. So people often say the guarantee or the warranty is only as strong as the company, but there’s very few insurance companies around as long as our friends in Lloyds of London. So they underwrite the guarantee if Autarco aren’t able to pay the shortfall.

[10:17] Alec – All right, so that’s a very, very strong guarantee.

[10:20] Steven – It’s guaranteed savings and it de-risks the entire investment because people are buying solar. It’s more of an investment.

[10:27] Alec – Yes, in the long term investment.

[10:28] Steven – It’s a long-term investment with a quick payback. The system will generate power for the next 25 or 30 years. So Autarco and Alternative Energy Ireland are more concerned with the output of your system than you should be as a customer.

[10:41] Alec – Very good, I like that. Ireland’s not known for its sunshine, so how do we fare out, sort of compared to other countries?

[10:47] Steven – Yeah, correct. Ireland doesn’t get its abundance of sunshine, but what we do get is we get, at the beginning of the year we can tell very accurately across the year how much sunlight we’re going to get in Ireland because from year to year it doesn’t change very much. From day to day it changes an immense amount, but the law of averages always pans out and across the year we can tell just how much power we’re going to get. The only difference with us and, say, Spain would be they’ll get a slightly higher output across the year from the same system, but we only promise you the savings you’re going to get based on Irish conditions. So they’re not based on, you know, optimum lab conditions or sub-Saharan African. They’re based on what the Irish conditions are going to be. So any savings we promise you, they’re guaranteed.

[11:30] Alec – I suppose I’ve heard there are options to sell electricity back into the grid. Maybe talk to me a bit about that and how that works.

[11:36] Steven – Yeah, it’s relatively new in Ireland. It’s been around quite a while across Europe. It’s a mechanism whereby you take a business that’s closed on a Sunday, for example, if they’re producing, the solar system will generate seven days a week, obviously. So on the Sunday that the business is closed, they’ll have a very small base load. And what will happen is the solar power will cover the base load. The meter won’t be spinning. But any excess power that’s generated by the solar that doesn’t go into the baseload in the building goes out to the grid. So a typical example, you’re generating a thousand units of electricity and the business only needs 700 units of electricity at that moment in time. 300 units of electricity will spill out to the grid. And you, your energy provider, your whoever you’re with, whichever energy provider you’re with, they’re obliged now as of 2023 to purchase that power from you at a rate that’s set by them. So it makes it interesting when you’re shopping around for electricity now as a business owner, you’re looking at two metrics, not just the purchase price of electricity, you’re actually looking at the sale price of electricity back to that energy provider at the same time. And you need to find out what the best overall package is for your business to, to, to purchase that power back from you. But that’s something that’s, that’s in town now. And it, um, it stopped, it removed, it mitigates the requirement for bat, excuse me, for batteries on site because, uh, excess power goes back to the grid. The grid doesn’t cost you anything to maintain each year, whereas a battery would come with a cost.

[13:04] Alec – So batteries can be quite expensive.

[13:06] Steven – Yeah, absolutely. The world is moving to a massive requirement for batteries. We’re electrifying the transport network. All the cars and vehicles are looking for batteries. Grid operators are looking for batteries. So battery prices are quite high at the moment relative to the cost of solar. So our recommendation for 95% of businesses is to contact us. Is a non-battery system and use the grid as your battery.

[13:32] Alec – We have a long-term investment, we’ve kits that we’re going to use for the next 25 or 30 years. Do they come with any sort of warranty?

[13:41] Steven – Yeah, absolutely. Every component in the system comes with a warranty and it varies from a minimal of five years up to 20 years in some cases. With any system coming with warranties that long, you can appreciate they’re quite reliable, the systems. So the systems are coming with parts warranty for those periods. But then the Autarco brand we do, it offers something very unique, which I mentioned earlier. It’s the output guarantee. That’s something nobody else in Ireland has for any business owners, considering solar. So that guarantee comes for a minimum of five years and it can be extended to up to 15 years, where the output from the system, combined output from the system across the year, is actually guaranteed for the business owner.

[14:20] Alec – In the unlikely event that the system actually breaks down, What plans are in place to get us back up and how quickly is that likely to happen?

[14:27] Steven – In the event that it does happen, the first thing that will happen is if the solar system is taken out of action through a random fault with a component, the grid is there. We don’t remove the grid connection. So your national grid connection will stay there and all that will happen is your solar power will come out of play and the grid will pick up any of the shortfall, just like it’s done for the last number of years that you were connected to the national grid. So, and that’s seamless. There’s no blinking lights. There’s no manual reset of anything to take place. That just happens automatically. Then we’d spring into action and we’d look to get our team out to replace the component. Or a lot of the times we can actually fix these things remotely as well.

[15:04] Alec – The odd time that there’s a power outage altogether, what happens?

[15:08] Steven – Yeah, in the event of a power outage, the solar system must turn off as well. That’s something that’s written into the electrical code. So when the grid comes down in the area, which is thankfully rare enough these days in Ireland, when that happens, the solar system must come out of action also. And when the national grid or when the power comes back onto the building, within about 30 seconds, the solar system will be back generating again. It self-resets itself.

[15:34] Alec – I understand, Stephen, that there’s been some exciting news this year in terms of alternative energy Ireland being purchased by one of the big players in the energy market. Maybe tell us a bit about that and what it brings to the offering you have.

[15:45] Steven – Yeah, absolutely. Very humbled to be purchased by Certa Ireland, who are a DCC company. DCC would be one of the largest companies in Ireland. They acquired the company in 2023 and they’re going to help bring the business to places I could never have imagined when I set it up 17 years ago. Huge scope for additional clients. They have huge disciplines and they have a lot of experience scaling businesses up. So, we’re in the process of doing that at the moment. So, it’s very exciting for our business.

[16:13] Alec – And they’ll have the sort of financial cloud for this PPA offering that you’re talking about?

[16:18] Steven – Absolutely, yeah. The huge, huge financial cloud. I think their last financial year, they turned over 22 billion euros. So, you know, our little company is not going to drain their coffers fairly quick.

[16:29] Alec – Where can people find out more about Alternative Energy Ireland?

[16:32] Steven – I’d recommend if you want to do some basic research, start on our website, it gives you some of the headlines, aeicommercial.ie. After that, either submit an inquiry off the website and we’ll get in touch or give us a call 01-4433996 and one of our consultants will be more than happy to talk to you about your business, how you use your energy and we can get a proposal together either by visiting site or we can even get an outline proposal together without visiting site if people just want to explore this as an idea and see if it makes sense for them.

[17:01] Alec – Special thanks to our guest today Stephen Bray, Managing Director of Alternative Energy Ireland for coming in and sharing so many valuable tips with us. If anything we talked about resonated with you, why not reach out to us across any of the social media channels, the SME Business Show. Thank you for your company and please remember to join us again soon.