Could your business generate its own electricity?

03 December 2018

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Could your business generate its own electricity?

In a bid to help lower energy costs, reduce environmental impact, and even create new revenue streams; an increasing number of businesses are starting to generate their own electricity. Utilising wind, solar and biomass technology, businesses from a range of different industries have been able to generate electricity to be used in-house or sold back to the grid.

If you believe your business could benefit from generating electricity on-site, we’ve put together this introductory guide, which delves into the benefits of the process and shares a few tips to getting started.

The benefits of generating your own electricity

Businesses generating their own electricity can enjoy a wide range of different benefits, including financial and environmental perks. There are a number of reasons why a business may look to invest in the technology used to generate electricity, including: 

Lower electricity costs 

Perhaps the most obvious and popular reason, generating electricity on-site can help cut overall energy costs. This is great for businesses which use a lot of electricity on a daily basis –they could really put a dent in their overheads. 

reviewing business impact

Increased revenue 

A continuation of the above benefit, if a business starts to develop more electricity than they require, they could sell the  excess back to the grid. Whether a little or a lot, this could be a simple-yet-rewarding source of extra revenue. 

Price protection

The energy markets can experience periods of  unpredictability. So, having a source of electricity which isn’t subject to the volatility of the energy market provides a little insurance. 

Reduced carbon emissions

Harnessing renewable energy sources such as solar and wind can help reduce your business’ carbon footprint. Not only is this great for the environment, but it could help your business qualify for sustainable business awards, recognition and grants.

How to generate your own electricity – first steps

For many businesses, the prospect of generating electricity may be exciting, but also daunting and a little confusing. There are a number of different methods and processes to consider when you approach generating electricity as a business. Before progressing with electricity generation, consider these factors to help you identify the best method for your business.  

presenting a business case

Stakeholder ambitions

The decision makers and stakeholders within your business may take a more long-term stance on the overarching energy usage strategy. It is important to have their input before proceeding with the best plan of action.

Overall targets

The best place to start would be to identify which of the five benefits listed above have influenced your decision to generate your own electricity. Whether you’re inspired by environmental ambitions or are keen to reduce your business’ overheads – the long-term targets could impact how you implement your electricity-generating plans.   

Business location and physical size

Naturally, the location and physical footprint of your business will impact how you can and should generate your electricity. For example, businesses which are located (or own land) on high ground or by the sea may be best to invest in wind turbines to take advantage of the high volume of this renewable energy source.

It is also worth noting that your location may be better suited to harnessing the elements than you realise. Whilst the UK isn’t blessed with a tropical climate, there is still enough sunlight hours to generate significant volumes of electricity via a photovoltaic system. A specialist solar power installation consultant will be able to give you a more precise estimation of your location’s electricity-generating potential.

 reviewing energy initiatives

Government incentives

In a bid to encourage businesses to meet certain sustainability targets, the government offers incentives for businesses reducing their energy consumption. Research the incentives your business may be entitled to and identify your clearest path to achieving these. 

On-site restrictions

Although restrictions on implementing renewable energy sources and supporting technology have been lifted by the government to further incentivise environmentally-friendly practices, there could still be certain restrictions. Large structures such as wind turbines, in particular, will be subject to planning permission and environmental reviews. This means it is important to review the viability of your plans being accepted before investing significant time and resources into the project.

Bringing the project to life – different methods of generating electricity

Once all stakeholders and decision makers have agreed upon a clear idea of the project’s ambitions, it is time to identify the most suitable method of generating electricity. Here are some of the options for UK businesses. 

Solar panels

The most widely known renewable energy generating technology, solar panels have a small physical footprint and require minimal upkeep and maintenance. Soaking up rays from the sun means solar panels have little environmental impact. However, there is  a limited volume of solar power a business can use, based on the size of the premises, so it is best suited to complement a wider electricity-generating strategy.

Wind turbines

Similar to solar panels, this technology turns the natural elements into electricity. However, the physical footprint is larger, and planning permission will have to be sought before a wind turbine can be constructed.

business wind turbines

Heat pumps

There are two different types of heat pumps available: air source and ground source. The  first absorbs naturally-occurring heat from the outside air, whilst the  second sources the heat retained in the ground. This form of electricity generation is great for powering the heating in your premises and heating up water.

 business team discussing electricity

Combined heat and power (CHP)

Sometimes known as cogeneration, CHP is the process of maximising the amount of usable energy when generating electricity. Traditionally, when electricity was generated, wasted heat would be emitted into the atmosphere. CHP is a process of harnessing that excess energy and turning it into useful heat. This means that for the same amount of fuel combustion, more energy can be produced.

By harnessing this excess energy, and turning that into electricity, this technology vastly improves energy efficiency – providing eco credentials and reducing overheads in the process. According to government guidelines, the process of CHP can reduce carbon emissions by up to 30%. 

Looking to control energy costs? We offer a range of flexible gas contracts for large organisations.

Find out more about what we can do for you

productive business energy meeting

Selling your electricity back to the grid

If your electricity generation scheme has been so successful you have surplus, it is currently possible to sell it back to the grid.

If you’re generating power on a commercial scale (more than 250KW), Contracts for Difference (CFD) is the government’s official energy buyback scheme, but you will need a Power Purchase Agreement (PPA). For smaller installations under 250KW, the Feed-in Tariffs (FIT) scheme is a more suitable option – however, this scheme looks set to close to new applicants from 1 April 2019.

  • CFD – The Contracts for Difference (CFD) scheme is an agreement between the business generating electricity and the Low Carbon Contract Company – a government-owned organisation. The agreement between the two parties guarantees that the electricity-producing business will receive a fair price for their electricity – by providing the difference in price when the market is struggling.
  • PPA – A power purchase agreement (PPA) is a contract between the organisation generating electricity on-site and a purchased i.e. an energy company such as SEFE Energy or a trading house. This option offers your business a guaranteed revenue stream, while allowing corporate customers to capture the best energy price on the market, reduce costs and increase their sustainability credentials in the process.

At SEFE Energy, we provide PPAs for our customers, offering you a great price on the electricity you produce whilst making the process seamless and simple. Furthermore, we can help protect you against the prospect of a fluctuating market with a fixed long-term contract.

All you have to do is get in contact with our Clean Energy team on 0161 829 0108, and we’ll take it from there.

  • FIT – The Feed-in-Tariff (FIT) scheme is a contract set up between the business generating the electricity and their energy supplier. The supplier will pay the business according to the amount of electricity they produce.    

Of course, every business’ approach to generating and using electricity will be different – but these introductory steps should provide a helpful basis when you commence your business’s own campaign of electricity generation.  

SEFE Energy is a leading and award-winning business energy supplier, helping thousands of small businesses manage their gas and electricity contracts. To find out more about what we can offer your business, visit the homepage or get in touch via the contact us

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