SEGRO – Retrofitting PV Roof Panels

16/12/2015

SEGRO is achieving strong progress on its 2020 sustainability goal to increase renewable energy generating capacity across the Group, following the launch of a scheme in 2013 to fund PV (photovoltaic) panels on suitable buildings across the portfolio. This scheme offers occupiers the opportunity to purchase this renewable electricity at reduced rates compared to National Grid electricity. The renewable installations are wholly owned by SEGRO, which sells the power to the occupier, with the surplus going to the National Grid. In 2014, SEGRO installed an additional 1.3 million kWh of renewable energy generation capability across the portfolio, including PV arrays on its own offices at 258 Bath Road on the Slough Trading Estate and on a number of SEGRO buildings across London and Thames Valley.

30% lower electricity rates for occupiers

£600,000 extra income for SEGRO in 2014

35 SEGRO assets with renewable sources

8.3 million kWh of renewable energy in 2014

Situation

SEGRO owns, manages and develops modern warehousing, light industrial and data centre properties, principally concentrated in London’s Western Corridor and key conurbations in France, Germany and Poland. As part of the company’s 2020 sustainability strategy, it aims to increase renewable energy generating capacity across the Group. SEGRO is achieving this through technologies such as PV panels, ground and air source heat pumps, and solar thermal heating. Projects include direct investment, as well as support for occupiers that wish to carry out renewable energy installations in SEGRO buildings. This article focuses on how SEGRO has retrofitted photovoltaic arrays onto existing buildings.

Actions

Timeline of SEGRO’s renewable energy progress:

  • 2010: SEGRO evaluated the feasibility of installing PV panels at a number of properties. The payback period was generally eight to 11 years, with an overall return on investment of around 8 to 10%, making this a viable option. At SEGRO’s site in Frankfurt, 75,300 sq ft of PV panels were installed through a rental agreement with energy firm Juwi Solar, providing SEGRO with rental income and giving the occupier access to clean power at preferential rates.

 

  • 2011: SEGRO worked with occupiers and energy firms to complete PV installations at 18 properties. Feed-in Tariffs in Belgium, the Czech Republic, France, Germany and the UK provided an additional incentive for the company to rent or use roof space for renewables. In Germany, PV installations included 219,600 sq ft at Winsen Benzstrasse Logistics Centre in Hamburg with Juwi Solar and occupier Takko, and over 1,400 panels at Dormagen and Darmstadt with Pohlen-Gruppe. In the UK, installations on three properties in Slough, occupied by LG Electronics, Staples and AZUR Solar, generate 117,000 kWh each year.

 

  • 2013: SEGRO retrofitted additional schemes on a number of buildings, including The Heston Centre and X2 at Heathrow, IQ Winnersh near Reading, Bornem and Rumst in Belgium. Factors considered prior to installation included the building orientation, roof structure and existing occupier energy demand. The company also launched a scheme to fund PV panels on suitable buildings across the portfolio, setting aside funds for different business areas. Through the scheme, SEGRO offers occupiers the opportunity to purchase renewable electricity at reduced rates, with surplus energy sold to the National Grid.

 

  • 2014: SEGRO delivered the first PV arrays installed through its renewables funding scheme. The first project to go ahead through the scheme was a 50 kWp installation at Greenford Park in London, which supplies around 50% of occupier Wholegood’s energy requirements in the warehouse, contributing to its aim to be a carbon neutral business. This was followed by 50 kWp at 258 Bath Road in Slough, SEGRO’s new headquarters, which supplies around 60% of SEGRO’s energy requirements in the offices. This installation was delivered as part of a refurbishment project that achieved a BREEAM Very Good rating and raised the building’s Energy Performance Certificate (EPC) rating from G to C, reducing exposure to the Government’s Minimum Energy Efficiency Standards, which come into force in 2018. In addition, 130 kWp was added at 7B Fairlie Road in Slough, which generates up to 120,000 kWh per year, enabling occupier All Print Supplies to be virtually independent of the National Grid in terms of their energy requirements.

 

  • 2015: SEGRO set aside specific budgets across the Group to fund SEGRO-owned renewable energy projects, with over 750 kWp of projects due to be completed by the end of the calendar year. The company will also continue to work with occupiers to support their renewable energy projects where possible.

Financials

SEGRO pays the capital requirement for each renewable energy project and then either leases the system or sells the energy to the occupier. The scheme mechanics enable both SEGRO and occupiers to benefit

  • £600,000 of additional income generated for SEGRO from PV roof panels in 2014
  • Average energy cost savings for occupiers of 30% against their standard energy rate in 2014
  • Average payback on investment for SEGRO of around eight years.

Benefits

SEGRO’s renewable funding scheme is a scalable project that can be repeated across the portfolio, creating both commercial and environmental value:

  • Generating 8.3 million kWh renewable energy in 2014, including third-party owned systems
  • Producing enough renewable electricity in 2014 to power more than 2,000 homes for a year1 and cutting CO2 emissions
  • Increasing renewable energy generated by 10% in 2014 compared to 2013, supporting SEGRO’s 2020 sustainability goals
  • Contributing to improved EPC ratings and BREEAM sustainability certification for individual assets
  • Adding value as an asset management tool, cutting occupier energy costs, reducing occupiers’ reliance on National Grid supplied electricity and supporting occupiers’ sustainability goals, all of which has strengthened SEGRO’s relationships with occupiers
  • Preparing the SEGRO portfolio for increasing legislation on the energy efficiency of buildings and greater customer focus on energy efficiency.

1. Department of Energy and Climate Change: Energy Consumption in the UK (2015): Chapter 3

Challenges & Achievements

 

EUROPE

 

How to install PV across different countries?

 

SEGRO operates a cross-border technical group that meets quarterly to share technical knowledge, experience and ideas, with renewable energy a key area of research. Operating in nine different European countries, SEGRO also tailors its approach to renewables for each country, taking into account the different planning and regulatory frameworks. In the UK, supported by Government Feed-in Tariffs, SEGRO and occupiers own renewable energy installations outright, using the energy and collecting payment for power fed into the National Grid over a 20 to 25 year period. 

 

 

UNCERTAINTY

 

How to plan for renewables in a changing regulatory context?

 

Recent reductions in Government Feed-in Tariffs will make it more difficult for SEGRO and others to achieve returns on PV installations, affecting payback periods and the financial viability of renewable projects. For instance, when the Government previously announced reductions to Feed-in Tariffs from December 2011, this reduced the number of viable projects. However, over time the supply chain adapted their offer to meet the company’s viability criteria. SEGRO remains committed to increasing renewable energy generation, and will continue working closely with occupiers and PV partners to deliver projects that deliver commercial and environmental returns. 

 

 

EMBEDDING

 

How to communicate the renewables offer to occupiers?

 

SEGRO’s sustainability team worked closely with different areas of the business, including leasing, marketing, asset management and refurbishment, to explain the renewables scheme to them and secure their buy-in. They set out how the scheme could support each business area, e.g. helping the leasing team regear leases with existing occupiers, the marketing team promote available space, the asset management team improve occupier satisfaction and the refurbishment team improve a building’s sustainability rating. They also included maintenance costs within the PV appraisal process, with SEGRO taking on responsibility for maintenance. This means that the panels are a ‘no-hassle’ option for occupiers. SEGRO provides guidance to its roof-cleaning contractors on requirements for cleaning PV panels, which becomes part of ongoing services.

 

Find out more

Terry Clarke

Technical Sustainability Manager

SEGRO

 

www.SEGRO.com

“The solar PV system has helped us reduce our carbon footprint and reduce energy costs by around 60%.”

Kevin Wallace, Managing Director of All Print, SEGRO occupier on the Slough Trading Estate

“Our renewable energy scheme saves occupiers money and acts as a great incentive not only to attract new customers, but also to retain existing ones.”

Martin Kidd, Asset Manager at SEGRO