ESG consulting
Consulting services and advice to help you manage Environmental, Social and Governance (ESG) considerations, risks and opportunities.
Maximising the value of solar PV projects
As a renewable energy source, solar power has the potential to provide a number of benefits, including financial, environmental and social impact. But, in order to fully realise these benefits and maximise the value of solar photovoltaic (PV) projects, effective asset management is vital.
RPS’ Sustainable Business & ESG Associate Director, Will Emtage, shares an example of how he worked with a client to provide strategic asset management - including reviewing performance and benchmarking – and how this input helped to increase output and revenue from their solar portfolio.
Who was the client?
Wholly owned by a global energy company, the client was a £20M impact fund invested in a UK wide portfolio of 270 commercial scale solar PV installations, both ground-mounts and roof-top, predominantly focused on schools and education centres.
What were they trying to achieve?
The client’s objectives were focused on having an impact in two key areas – environmental and social. These focused on displacing reliance on carbon-intensive grid-sourced electricity and providing electricity to participating schools at no charge. By reducing the need for expenditure on grid imported electricity, this allows schools to allocate cost-savings to drive improved educational and socio-economic outcomes.
Ongoing portfolio costs are satisfied through Feed-in Tariff revenue that scales in proportion to the level of solar electricity metered. Any surplus revenue that remains, after costs are subtracted, is then distributed annually to community organisations across the UK and screened through a set of evaluative Environmental, Social and Governance (ESG) criteria. This drives a second tier of environmental and social impact.
How did you help them?
Based on prior expertise in renewables, I took over advisory and asset management responsibilities of this solar portfolio. To kick it off, I identified a range of factors that constrained financial performance and restricted the level of environmental and social impact delivered to stakeholders.
Using this information, I developed and implemented a series of new KPIs that required performance to be benchmarked on an ongoing basis. A bespoke data system was developed for the client to monitor, in real-time, performance of both the individual installations and the combined portfolio. The system also incorporated weather conditions, providing a more accurate assessment of performance.
What were the key outcomes?
Enhanced monitoring of the portfolio enabled any issues and under performance to be easily and quickly identified and resolved, significantly improving the cost-efficiency of operations and maintenance. In three years, these efforts drove a 24% improvement in underlying solar PV output (with no new assets installed), and a 30% improvement in annual portfolio revenue versus historic levels.
In terms of targeted environmental and social impacts, the improved performance enabled over £360k in aggregate annual cost savings for participating schools (equivalent to 24,033 textbooks1) and avoided 530 tCO2e in annual carbon emissions2, despite a 60% fall in on-site consumption during the COVID-19 lockdown periods. Additionally, the surplus revenue now enables almost £0.7m to be distributed to ESG-aligned community enterprises each year, driving wider second tier social and environmental impacts.
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Maximising value in your solar projects
Whether your principal focus is financial return, or the delivery of integrated ESG impacts, we can help ensure you maximise the value for every pound, dollar or euro invested in your existing or planned solar projects.
We can run a low-cost diagnostic on your existing portfolio to flag potential under-performance issues. If you are planning a portfolio, now is the time to embed sophisticated performance management protocols that go beyond typical forecasting techniques currently offered by most providers on the market.
Footnotes
1 Assuming £15 per textbook
2 Based on the then BEIS emissions factor of 0.235 kgCO2e/kWh of Solar PV consumed
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