How many solar panels do you need? (Warehouse Totaal)

Solar panels are becoming an increasingly common sight on warehouse and distribution center roofs. There is no question that they make a valuable contribution to improving sustainability in the logistics sector. But is it really necessary to cover the entire roof with solar panels, or can you generate sufficient energy with a smaller number?

At the Greenport Venlo business park, Nunner Logistics has moved into a new 110,000m² warehouse and the entire roof is being covered with solar panels over the course of this year. With a capacity of 13.1 megawatts when it is finished, this will be one of the biggest solar roofs in Europe.

The amount of power generated will be enough to supply 4,500 households with electricity, which is much more than the logistics service provider itself needs. As a result, this will be an energy-positive warehouse rather than an energy-neutral one.

Warehouse roofs are an ideal location for solar panels. They are often very large surfaces – and getting bigger all the time due to the rise in XXL warehouses – where few other technical systems are installed. “That’s a key difference with factory roofs, which are often home to many more building-specific installations,” says Mari van Kuijk, managing consultant and partner at logistics consultancy firm Groenewout.

BREEAM credits

Nevertheless, many warehouse roofs remain largely underutilized, with only a small number of solar panels installed. One reason for this can be found in the BREEAM certification requirements. BREEAM is based on an independent method of assessing the sustainability of buildings. It is important for property developers, because BREEAM rates not only the sustainability but also the quality of a building.

This means that the property market remains interested in a BREEAM-certified warehouse even if it is a decade old. Van Kuijk: “Property investors can earn credits with each sustainability-related investment they make, such as an investment in solar energy. However, around 100 to 150 solar panels are usually sufficient to gain the necessary number of BREEAM credits for solar energy.”

The BREEAM certificate is not the only reason for companies to install solar panels, however. Another key driver is the SDE+ subsidy scheme which guarantees that companies with a solar roof benefit from an attractive price for all the electricity they supply back to the main grid for a period of 16 years. That subsidy can make it worthwhile to install more panels than are strictly necessary for the company’s own use or for the BREEAM certificate.

“SDE+ enables companies to calculate the return on their investment in solar energy. After all, no one can predict what will happen to energy prices in 10 or 15 years’ time. Without the SDE+ guarantee, no property developers would be willing to take the risk regarding the longer-term trend in energy prices,” explains Van Kuijk.

Preventing risks

Other factors can influence the decision to not make use of all the available roof space, such as the time and energy involved in managing and maintaining the solar panels, and also the extra risks associated with placing an electrical installation on the roof. In theory, a short circuit could indeed cause a fire. But the right constructional and electrotechnical measures mean that risk remains very small, according to Ecorus, the solar energy specialist that is installing the panels on the warehouse roof for Nunner Logistics.

“The most important factors are the roof construction, and the choice of roof insulation and roof covering materials. Besides that, the quality of the electrotechnical installation is essential. Using the same brand of both UV-resistant, double-insulated cables and connectors that fit together seamlessly reduces the chance of a short circuit. And ideally, cables shouldn’t pass through the roof, but if there’s no other option then the cable duct should be fitted with fireproof material,” advises Bob van der Linden, head of sales logistics at Ecorus.

In reality, the fire risk shouldn’t be a concern at all. Van Kuijk emphasizes that the risk of fire is mostly an issue at residential properties, where solar panels are not always installed by qualified technicians. “In the logistics real-estate market, the organizations are professional, and a high-quality installation is in their own best interests too – particularly if they’re responsible for managing and maintaining the property themselves. The risk of fire is reduced by regular maintenance, but that doesn’t always receive the attention it deserves in the consumer market. Moreover, the fire service and insurance firms take a keen interest in the fire risk at companies.”

Corporation tax

If the warehouse is owned by a property fund, tax considerations can also play a role because, under Dutch law, a property fund is classed as a fiscal investment institution that is exempt from corporation tax. That status can change, however, if the fund purchases or leases solar panels and supplies electricity back to the grid. In that case, the fund is regarded as an energy producer and hence a commercial enterprise, which can mean that it has to pay corporation tax after all. The extra tax burden far outweighs the extra income from the solar panels, so this can be a reason to limit the scale of the solar roof to ensure that it only produces enough energy for own use. Van Kuijk estimates that solar panels need to cover no more than 20 to 25% of the roof in that case.

Leasing the roof

Another solution is to lease the roof space to a company like Ecorus rather than investing in your own solar panels. That company then takes care of the necessary investment, management and maintenance of the system in exchange for the subsidy and the excess electricity. Van der Linden: “In exchange, the owner of the roof receives rental payments for the roof space. As an added bonus, the property owner is free from all risks associated with the ownership and operation of the system.”

The only prerequisite for this approach is that the property owner must give the lessee ‘surface rights’ to the roof for the duration of the lease agreement; only then is the lessee considered the legal owner of the solar installation on the roof, and that is an important requirement from the bank’s perspective when a loan is required to finance the installation.

This article has been published in Warehouse Totaal, may 2020. If you have any questions please contact Mari van Kuijk.