At the start of the year, Philip Dennis Foodservice made a bold move towards improving both their financial and environmental performance by installing an extensive solar system across their warehouse and cold storage facilities. Recognizing the immense potential for cost savings and sustainability benefits, they partnered with us to implement the project.
System Design
The installation took place at Philip Dennis’ two-site facility, consisting of a standard distribution warehouse and a cold store, which accounts for the majority of the site's electricity consumption. we at Spirit Energy designed the system to maximize efficiency by covering both building roofs with solar panels. The design incorporated 695 kWp of capacity, with 367 kWp on the warehouse roof and 328 kWp on the cold store. The system, which includes 1,636x 425W Trina solar panels, is estimated to generate 720,000 kWh of energy annually. To ensure optimal performance, the system is equipped with six 100kW inverters, which have been slightly oversized to capture more energy in winter months when sunlight is weaker.
Financial Benefits
Philip Dennis is projected to save over £85,000 annually on their electricity bills thanks to the solar array, which is expected to pay for itself within five years. With an Internal Rate of Return (IRR) of over 23% and a Net Present Value (NPV) of £1.8 million, the financial returns are impressive. Over 20 years, the company expects to save more than £2.4 million on electricity costs. Additionally, the system generates more energy than the company needs, allowing them to sell excess electricity back to the grid for a fixed rate, further increasing their financial gains.
The system is designed with future growth in mind, offering flexibility should their electricity usage rise. For example, Philip Dennis could introduce electric vehicles to their fleet and use the excess solar energy to charge these vehicles at a reduced cost during the day.
Environmental Benefits
The installation is not only financially beneficial but also makes a significant contribution to Philip Dennis’ sustainability goals. The system is expected to offset over 2,877 tonnes of CO2 over 20 years, equivalent to planting 16,440 trees or taking 4,294 flights from London to New York out of the skies. As a company focused on reducing its carbon footprint and aligning with emerging ESG regulations, Philip Dennis is proactively positioning itself to meet future net-zero requirements while reaping the rewards of cleaner energy.
How Solar Can Be Financed with No Impact on Cash Flow
The financial structure of the solar project is particularly advantageous. For businesses like Philip Dennis, solar installations can be fully financed without upfront capital, offering savings without any immediate out-of-pocket costs. Through a Power Purchase Agreement (PPA), the company was able to install the system without paying a deposit, yet still benefit from substantial electricity savings. This model ensures no negative impact on cash flow, as Philip Dennis pays for the energy generated by the solar panels at a much lower rate than their previous electricity bills.
Testimonial from Managing Director, Peter Dennis
Peter Dennis, Managing Director of Philip Dennis Foodservice, shared his thoughts on the project:
"As we've invested in solar panels for one of our sites in the past, we already knew just how beneficial the technology could be. Given our high electricity usage, installing even more just made absolute financial sense. We're committed to improving our sustainability, and we believe that renewable sources of power are a big part of this. Investing in more solar has helped us get closer to our Net Zero ambitions and drastically reduced our carbon footprint. Our reduced reliance of the grid has protected us from energy price hikes that have hurt so many others in the last few years, and it is sure to protect us against inevitable price rises in the future. The decision to work with Spirit Energy as our solar installer was an easy one; they were proactive in approach, gave sound technical advice without any pushy selling, and designed a system to suit our needs. We were having our roof replaced at the same time, and Spirit worked seamlessly with our roofing contractor to deliver the project on time, on budget, and with minimal disruption to our business. I would have no hesitation in recommending them to anyone looking to get solar for their business".
-Mr Dennis, Managing Director at Philip Dennis
Conclusion
Philip Dennis Foodservice's investment in solar energy is a prime example of how commercial solar can yield substantial financial returns while helping businesses meet their environmental goals. With projected savings of over £85,000 per year, a five-year payback period, and significant reductions in carbon emissions, this project is both an economically and environmentally sound decision.
