Install up to 900 Kilo-Watt Peak of solar panels on alstria's buildings.
Solar energy is a natural fit with office properties which are usually operated during the daytime when solar energy is available and empty at night when it is not. Rooftops offer a natural home to solar energy generation.
Moreover, producing energy at or close to the point of consumption saves a substantial amount of energy as it reduces the loss between the energy produced (primary energy) the energy consumed (consumption energy).
As such, solar panels need to become a major tool in the decarbonisation toolbox of office buildings.
The answer to this question finds its roots in the complex German legal system that regulates energy production and resale. As surprising as it might sound an office landlord cannot efficiently resell the energy produced by the building to the actual users of the building which is under no obligation to buy it. As such the landlord has to resell the energy produced to the grid at a fixed price called the feed-in tariff which is currently at EUR 0.07 per KWh. This is how the math works for an estimated solar panel lifetime of 25 years:
- Cost of 1 kWp = 1.100 EUR
- Average annual production = 855 kWh/annum
- Annual revenues = 46 EUR/kWp (Feed in tariff less maintenance costs of 0.02 EUR/kWh)
- Lifetime revenues = 1.142 EUR
The 42 EUR of profit that is projected over a 25 year period would not be enough to cover for alstria's costs of capital. It would represent a return of around 1% per annum which is substantially below what we would expect. As such, we would not undertake this investment if we would only consider the financial element.
It would not take much to render the investment in solar panels financially viable. While we are currently forced to sell the energy to the grid at the feed-in tariff, the building users are buying energy from the grid at an average price of EUR 0.24 per KWh.
If building user had to buy in priority from the landlord the energy produced by the building which they occupy at a price of EUR 0,16 per kWh (plus eventual taxes and duties), the investment would meet our returns expectations. The user would also be being the energy at a cheaper price than what is currently available on the market.
This could be achieved by a (simple) change in legislation.
It costs around 1.100 EUR (net of VAT) to install 1 kWp of solar panels. alstria would therefore install a maximum of EUR 1,25 m (including VAT) worth of solar panels under this program.