Alpha-Financials Environmental recently completed a feasibility study for an Italian Facilities Management Company, investigating the financial viability of installing up to 3.5MW of solar panels on a rooftop of a commercial building in the UK. The cooperative business model between this Facilities Management Company and a commercial building letting company proved lucrative at home. Since these buildings are let to companies such as DHL and Amazon as “zero-carbon”,  hence complying with their desired ESG targets. Now they turn their attention to the international arena.

In order to complete an investment appraisal of duplicating this business model it the UK, Alpha-Financials Environmental was engaged to research all the fundamental questions about the energy market.

Questions addressed in the feasibility relate to:

  • How is the UK energy market structures?
  • Which legislative changes are on the horizon?
  • What different subsidy schemes are available?
  • What are the best tariffs on the market for import and export and what are the conditions?
  • Who are the District Network Providers and Electricity providers?
  • What are the technical requirements?
  • How does the VAT and other taxes such as corporation tax work?
  • Pitfalls in setting up a UK company?
  • Predictions for electricity prices?

The report addressed the client’s questions relating to a trident of topics

  1. Market: How does the UK electricity market work? Who owns the electricity network and who distributes, which led to a detailed explanation about the National Grid Transmission Network and the Distribution Network Operators (DNOs)? How is the market regulated and what mechanisms exist? This resulted in a deep-dive into the Smart Energy Guarantee scheme. When questioned about the planning regulations, the new Dec 2023 regulations concerning the Permitted Development Rights which lifted the 1MW limit on solar panels for commercial rooftops was highly relevant.
  2. Contracts: The client’s need resulted in research into the tenant-supplier contracts as well as examples and explanations about the pitfalls of Power Purchase Agreements (PPA). Hence a thorough analysis of the composition of commercial electricity prices with all its parts such as the unit cost, standard charge, Climate Change Levy (CCL) other levies as well as the VAT regulations, were provided. The desire to understand the incorporation of companies in the UK, from accounting requirements to corporate tax and VAT, were addressed with the help of our mother company Alpha-Financials Ltd.
  3. Technical: The questions related to this topic ranged from, which certificates are needed, to which technical standards for design, installation and maintenance exist? Here certificates like the microgeneration certificate scheme (MCS) and the Flexi-Orb were explained.

The quality of a feasibility study like this stems from a combination of elements starting with (i) customer engagement, to ensure the needs of the client are understood correctly. Several “client-checks” throughout the project are not only beneficial but crucial to ensure one stays “on-track”. Also having the (ii) extensive network allows us to gather information, advice and ask the occasional “reality-check” from those working on a day to day basis in the field. Finally, (iii) persistence in following up on information requested from agencies and other companies seems to pay off overall.

These all combined make for a feasibility study which pleased our customer, and that is all we want to hear.

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