Author
Ralph Wood

Ralph Wood

Associate

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Author
Ralph Wood

Ralph Wood

Associate

Read More

29 September 2021

Under Construction - Q4 2021 – 1 of 5 Insights

Logistic real estate: rooftop power stations of the future

  • Briefing

Demand for warehouse space, fulfilment centres and distribution facilities – the 'modern warehouse' – continues to exceed supply against a backdrop of shifting consumer retail patterns (changes accelerated by the COVID-19 pandemic but long in the making).

Inside, the modern warehouse is a different animal to warehouses of bygone years: LED lighting; connectivity; and sophisticated automation. From the outside though, much looks the same: big; bland; and rectangular. Aesthetically the modern warehouse is a building which leans heavily on the adage 'it's what's on the inside that counts'. But surely the ugly duckling of buildings is due its moment in the sun?

Solar photovoltaic (PV) installations are being viewed with greater frequency as a good use for large, unused, commercial rooftops. The clean electricity generated can power a building's own operations or be sold to the grid. Such installations can help an organisation meet its Environmental, Social and Governance (ESG) objectives and reduce its net emissions in a society focused on Net Zero. Solar PV panels are even compliant with the British climate, generating electricity in daylight not just sunlight. Clearly solar PV installations are attractive and straightforward in theory, but perhaps not so straightforward in practice.

Questions which should be frequently asked and properly answered include:

  • How does the structure support additional weight?Overloading of the structure may be a greater risk on retrofits of existing buildings than on new builds, but in any event particular care is needed so that the weight of the solar PV panels does not disrupt the roof's load sharing system and cause localised overstressing. A structural assessment should be procured from a structural engineer or other competent person. Accessibility for cleaning and repairs should also be carefully considered.
  • How are the works procured?In the past there has been a trend for engineering, procurement and construction (EPC) contracts to be used in the context of solar PV installations. However, the JCT suite of building contracts are a useful alternative; for example, when only connecting to the grid as opposed to works involving some facet of engineering such as the integration of a battery storage component with existing building systems. Careful thought should also be given to any interested third parties, such as any existing tenants or landlords, and what may be required to protect their interest; for example, collateral warranties or an access regime to minimise disruption.
  • Who is responsible for maintenance and repair? Solar PV panels typically benefit from two guarantees: a power warranty and a product warranty. The power warranty promises the expected output over time, being mindful of a gradual decline in efficacy, and the product warranty covers defects in the equipment and often environmental damage. Cover will vary by warranty and it is important to be aware of the allocation of responsibility for such issues in order to avoid hidden costs. Poor installation is another risk – water ingress and wind damage are common problems following solar PV installations. To mitigate those risks: select contractors or installers with MCS certification or relevant experience of PV installations and other building-integrated systems; and ensure there is adequate contractual recourse in the event of defective workmanship. Practically, solar PV panels are low maintenance – very durable and without the complexities of moving parts; however, periodic light surface cleaning is recommended to prevent obstruction.
  • How are the works funded?Global production and technological advances have driven down the cost of solar PV panels since Bell Labs first demonstrated the first practical silicon solar cell in 1954. Solar PV panels are now affordable and require little or no subsidy, which caused a reduction in the funding schemes available. The Feed-in-Tariff (FIT), under which you could receive payments from the UK government for each unit of electricity produced, closed for applications in 2019; however, the FIT has been replaced by the Smart Export Guarantee (SEG) which came into effect in 2020. Under the SEG the sale of surplus energy back to the grid can guarantee payments, with tariffs set by suppliers rather than the UK government in an effort to encourage market-based pricing in the sector. Eligibility for such schemes will vary by scheme and should be considered on a case-by-case basis.
  • What consents are required?Building Regulations apply in the normal way. However, in most cases, a rooftop solar PV installation on a commercial building will not require planning permission as a 'permitted development' under the relevant statutory instrument – The Town and Country Planning (General Permitted Development) (Amendment) (England) Order 2012. One notable exception is on flat roofs where the frame will need to be angled towards the sun and is likely to protrude from the roof more than the permitted two hundred millimetres. It is important to check whether all the limits and conditions are satisfied in order to benefit from the permitted development rights; for example, planning permission is not required provided that the solar PV array is fixed more than one metre away from the external edges of the roof. Advice could be usefully sought here from planning law specialists or your local planning authority.
  • Are there any other risks?The risks associated with emerging applications of newer products must be appreciated. For example: solar PV panels cannot be turned off when exposed to light presenting an electrocution risk during emergencies such as a fire; the panels may also prevent emergency access to the roof structure with some reports stating that the panels act as an umbrella against fire hoses. In this industry fire safety is at the forefront of minds, but a full risk assessment should be carried out on a project-by-project basis.

In this series

Real estate & construction

Collateral warranties and the Construction Act

Quick read

by Rebecca May

Real estate & construction

Delay damages and enforceability of a cap

Quick read

by Daniel Hutchings

Real estate & construction

Building Safety Levy

Briefing

by Rona Westgate

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