The company will be concentrating much of its efforts on targeting the commercial sector rather than the residential market. It believes the savings on electricity costs will be biggest for owners of small commercial and industrial premises where daytime usage of electricity is high. For example, over a 40-year period, a 50Kwp installation in Leeds could save £1.355m and 717 tonnes of CO2.
According to managing director Philip Taylor, the company is attracting a great deal of interest and is already committed to invest £20m by March 2012.
“We are already in advanced contract negotiations with a number of well-known businesses and are in discussions with a variety of food processors, hotels, licensed premises, GP surgeries, retail outlets, manufacturing companies, facilities managers and ground rent portfolio landlords.”
OAREL is launching at a time when electricity prices are soaring and the government is committed to sourcing 15 per cent of the UK’s energy requirements from renewable energy sources by 2020.
OAREL has been formed to take advantage of the predicted growth for small-scale solar installations which, according to a report from PricewaterhouseCoopers will increase from 20,000 in 2011 to 680,000 in 2020.
Although businesses and homeowners can choose to invest in the systems themselves, thereby taking advantage of both free electricity and FiT payments, OAREL’s business premise is that many will not want to make the up-front investment or take the risk that the system does not generate the FiT payments anticipated.
OAREL will therefore be paying 100 per cent of capital expenditure for supplying and fitting the solar panels, plus maintenance and insurance for 25 years in return for a roof or land lease over the areas where the panels are mounted. For the period of the contract customers will have free access to all the electricity generated that they can use, with OAREL receiving the FiTs and export tariff income. At the end of the contract customers will continue to benefit from free electricity fed back into the grid.
In addition to targeting the commercial sector, OAREL will also be targeting residential properties and has forecast to be completing more than 500 domestic installations per month in the next two years.
Although homeowners tend to use less electricity during the day, mainly because they are out of the house, an average homeowner could still expect to save around 30 per cent on their annual electricity bill (between £150 and £200 per year). This could be even higher if they change their patterns of behaviour, such as using washing machines during the day or installing electric storage heaters. For example over a 40-year period, a 4Kwp installation in Leeds could save £108,400 and 57+ tonnes of CO2.
Customers will have the benefit of knowing that in order to maximise power generation and FIT income over the 25 years, OAREL will only specify the highest quality and most reliable components in its installations. In addition the company has formed an installation agreement with a number of European EPC partners who between them have installed in excess of 50Mwp across Europe. All are accredited under the industry’s Microgeneration Certification Scheme (MCS).
The company will be offering all potential customers a free consultation service to determine the suitability of the property for installing solar panels.
Philip Taylor added: “We are forecasting that within two years the company will have invested around £100 million in solar power generation systems and will be completing more than 30 commercial and 500 residential installations every month.
“With a predicted average return on investment of 14 per cent, we are currently in talks with a number of people who have expressed an interest in investing in the company.”
Philip Taylor is the owner of Oakapple Group and a former Yorkshire Property Personality of the Year winner, while Gary Douglas is the serial entrepreneur who co-founded the GHD and Jemella hair care businesses. They are joined by technical director Dave Cockayne who has five years experience of the sector having been involved in a number of solar power schemes in Spain, Italy, Germany and Austria. The finance director is David Marsh who has worked with Philip Taylor for the last 10 years, as he is also the finance director of Oakapple Group.