Can Retail Centre Photovoltaic Roofs Pay In Poland?

Lublin September 5, 2013

PPR Poland2014 is slated as the year when Poland will finally introduce feed-in energy tariffs for small utility green energy developments. A green certification system is introduced linked to the current black rate and paying a premium based on the stock market rate for green certificates.

 

“According the new energy law in 2014 anyone with sizable energy connections could install utility scale energy with the minimum of building or environmental permitting if it were installed over an existing parking apron”.

“Few existing retail centre roofs are actually suitable for the installation of PV panels in Poland however retail owners could see the benefit of PPR’s [Photovoltaic Parking Roof] car park canopy roof over an existing car park apron deck”.

What Are The Benefits of PPR’s?

Once installed and married with the grid a Photovoltaic Roof can be treated like any other fee paying client the “off taker” for the green energy is the local utility who provides a 10-20 years take off agreement. Having such a fee paying tenant adds valuable reliable revenue streams to Retail Centres, Office Parks, Hospitals and other installation.

Besides the electrical energy income stream, value can be measured in “White Certification” summer shading, shelter from the snow, rain or wind all of which have their benefits for building owner and building user, after all not everyone likes parking in confined lower decks parking spaces and people shop where they feel comfortable

PPR’s are a very green statement they are high tech and they can add to the success of any scheme because they benefit the environment.

Poland’s Potential PPR Market

More than half of Poland’s Retail Centres are in need of major refurbishment. Much of Poland’s retail shopping is defective because of poor design or poor works execution or simply because they have exceeded their designed life cycle and are no longer competitive with a new alternative shopping destination.

As future planning for re-positioning and refurbishment is intense many Retail Centres Planners now focus on providing “Core Centre Value” for example retailers overhead costs and the health, creature comfort and well-being of those who work and shop there rather than design and design glitz.

The PPR Opportunity

Many edge of town projects have large parking lots most easily able to obtain the necessary permits to install PPR’s over the existing parking aprons. Polish green certificates at least for Photovoltaic’s are not only late coming but will be short lived and anyone planning to take advantage of more than the going rate are well advised to have their projects ready at the beginning of the feed in tariff handouts rather than at the end.

First come first served projects always get the highest benefits and feed in tariffs tend to decrease at least on an annual basis. The car park apron developer can at least capitalize on an uncomplicated planning process as all of the necessary permits are already in place.

How Does The PPR Work?

The Photovoltaic Parking Roof [PPR] is a installation of solar panels over the existing car park apron. Installation can actually be completed within a few days even large projects can be realized in weeks rather than months.

The glazed PV panels are simply inclined and orientated to receive the optimum amount of sunshine from where they can produce the optimum amount of electricity. There are no moving parts, once installed PPR’s need little more attention than a seasonal cleaning to remove dust or snow and to maximize their electrical performance.

What Is The Cost of a PPR?

The cost of PPR’s is measured in power installed and approximately 130 Euro Cents per watt [1.3 Euro per watt], PV panel prices recently reached a rock bottom price because international trade set a “Trading Limit Against Subsidies” to prevent further fall in PV prices. A PPR Construction consists of PV panels supports and substructure. Electricity produced by the panels are fed through a series of line collectors called inverters and eventually through cables to a main transformer from where all the energy produced is stepped up and provided to the grid.

How Much PPR Should We Invest In?

We calculate PPR’s in Mega Watts because stand alone Solar Farms are built in the most energy and cost efficient way which means they are made up of PV fields each of 1MW. 1MW is easily divested as a small scale utility whether is sits on its own in a field or in a large parking facility.

1 Mega watt [1000 Kilo watts] is the industry standard for a solar field. In relation to the car park apron 1MW is roughly equal to 500 parking spaces, this average ratio assumes one parking space is approximately <33m² very is efficient parking spacing and the parking apron is pretty much square. Parking aprons can achieve as much as 1.1MW per 500 parking spaces and more on the drawing board but it is worth considering that space is needed for the support structure of the PPR and installing PPR’s in poorly or tightly spaced car parks needs to be value and risk engineered.

PPR’s cost planning is ideally made in multiples or divisions of 1MWp. PPR’s of power divisions of less than 1MWp are less cost effective than multiples of 1MW. This is because 1MW,makes best use of “Big Ticket Cost” equipment such as main transformers which are necessary or an inevitable over cost no matter the size of installation.

Planning PPR’s

Solar PV Panels convert sunlight into electricity as DC [Direct Current] it is converted to AC [Alternating Current] through an inverter to be fed into the grid or distributed locally via a mains transformer station.

Firstly we try distribute electricity as AC so less energy is lost during resistance in distribution or lost as heat during the conversion and step up process. Much more energy variation occurs as it is lost through cables and as it is transmitted as DC. The energy loss through cables and the conversion process is referred to “Loss on the line” and this can have a significant impact on the profitability of a PPR if not properly managed.

To optimize loss on the line we try to minimize the distance from the furthest panel to the central transformer. As we already discussed the present industry standard is 1MW so solar Fields are created within a square configuration of no more than 125m x 125m they consume a little over 1,56 hectares.

The standalone “Cookie Cutter” 1MW field installation is set within 2,5 ha compound with a perimeter fence and road. The optimum distance from any one panel then is less than 75m from the central transformer station. To reduce loss on the line and maximize the energy gains from any PPR like the stand alone field the installation needs to be as regular as possible and it should be located next to the transformer station and as close as possible to the nearest the grid connection.

PPR’s must be entirely exposed, no shadows should occur from neighboring buildings, trees and other obstacles need to be value engineered into the process, even slightest shade over an individual cell will cause reduction in the systems performance.

Which Solar Panel Technology Should We Choose For PPR In Poland?

There are several types of PV panels for example Polycrystalline, Monocrystalline, Thin Film, and others. Worldwide the majority of installations are panels made from “Poly” [Polycrystalline] or “Mono” [Monocrystalline] Silicon cells. “Silicon PV Cell” technology generally has the highest conversion rate and solar efficiency, it has a very high level of manufacture and so far demonstrated least prone to failure. With the longest expected life cycle, Silicon PV offers the best warranty conditions and is therefore the most convenient technology to finance.

“Any installation of 500 kWp or more should be procured directly with the systems manufacturer. Typical Poly and Mono panels produce 220wp [220 watts peak power] so 1MW of installation would require a field of circa 4,500 panels”.

How Much Electricity Can A PPR Generate In Poland?

Every panel has a power rating typical high quality Silicon PV panels can harvest 220 watts power of electricity from sunshine. The power efficiency of the PV panel requires almost direct sunlight and for this reason the panels are installed at an angle to achieve the optimum sunshine harvest.

As we already discussed a well designed outdoor parking lot maintains 1 parking space per 33m² of total area. Based on much experience in Central Europe [for example Germany the world’s largest PV market] yields are never perfect and although software calculations indicate higher yields we recommend that 876,000 kilowatt per can be produced per year from 1MW of PPR in all major Cities and Towns in Poland. Dirty panels, morning dew, precipitated snow, ice, the odd defective cell or loose connection and all manner of other hazards are prone to impair the performance of a solar installation no matter where it is installed.

We recommend that 10% of the day [and night] produce a usable sunshine harvest or 2,4 hours per day average year round. 1MW = 1000kWp it produces an average of 2,400 kilowatts per day all the year round.

Retail Centre Impact

Most well designed, well serviced Retail Shopping Centres of Gross Floor Area of approximately 25,000m2 have a foot print of approximately 250 kWh/m2/year of energy consumption. This KPI is based on the gross energy consumption of all electricity gas [and heat] divided by the gross indoor area of the centre [excluding indoor car parking]. The centre is assumed to have air handling and maintains a summer temperature of no higher than 24 degrees Celsius and winter temperature of no lower 19 degrees Celsius

A typical 25,000m2 retail centre has an annual consumption then of 6,250,000 kWh at 0.11 Euro Cents per kWh the annual energy bills are in the region of 687,500 Euro per year including tenant space and community consumption. In this instance 500 Parking PPR can produce an offset of up to 15% of the total energy.

The Business Case For a Solar Roof

The strategy for PV installation is to produce energy when the sun shines and provide the energy directly to the Polish Power Grid. The sun generally shines after midday causing peak load time when electric cooling systems are working their hardest all the year round.
As already discussed the current price for PPR development is approximately 1.30 Euro per Watt Power [expressed 1Wp] so 1000 kWp of roof or 1MWp has a hard capital installation cost in the region of 1,300,000 Euro plus the cost of V.A.T

No premium feed in tariffs occur at this time in Poland and although they are promised for 2014 no one truly knows the cost of the green certified rate in 2014. As the feed in tariff is pitched against the cost of the black energy rate and a multiple of the green certificate which is currently traded on the stock exchange we can only assume the pitched rate to make economic sense for the investor to instigate reasonable take up.

We can assume one of three rates may apply in 2014. Firstly there is the current rate of commercial electricity in Poland which is approximately 11 Euro Cents per kilowatt hour. There is an average break even rate of 21 Euro Cents per kilowatt hour and considered by many as the maximum feed in rate that the Polish Authorities have considered. Meanwhile we have taken a median rate of 16 Euro Cents per kilowatt hour as comparison and on par with typical post Feed-In-Tariff rate adopted by many Countries in Europe as an acceptable rate for Green Energy

AAA Table

1MW PPR Performance Poland

Return On Investment

For 1,300,000 Euro invested in a PPR to cover 500 parking spaces a minimum annual income based on today’s commercial low voltage consumer rate of 11 Euro Cents would provide an income of 96,360 Euro and for a Retail Shopping Centre with a yield of 8 the value of 1,204,500 Euro is added to the value of the centre a little short of the investment cost and hardly reason to invest in green energy on its own. But a premium rate of 16 Euro Cents or 21 Euro Cents for a Retail Shopping Centre with the same yield delivers value added at 1,752,000 Euro or even 2,296,125 Euro

SOLIDEA And Solar

SOLIDEA Group and SOLIDEA sp zo.o. do not produce, construct or sell PV panels or equipment in Poland. However we can be consulted to represent lenders and developers to make sure the basics are designed, procured and value engineered and at the end of the day correctly commissioned. PPR’s are recommended by SOLIDEA EVE® and in EVE® workshops the EVE® team recommend and manage PPR’s in stage FOUR of EVE® program an “offset solution” to reduce the kWh/m2/year KPI of a retail shopping centre by as much as 15%