Yorkshire Entrepreneurs Planning to Invest £100m in New Company
- Published: Thursday, 15 September 2011 18:13
TWO leading Yorkshire entrepreneurs yesterday revealed that they planned to invest £100m in a new company which aims to become one of the UK’s biggest providers of renewable energy generation systems.
Leeds-based Oakapple Renewable Energy (OAREL) will generate power through the installation of free solar panels.
In the longer term, it aims to diversify into other forms of renewable energy generation such as wind power and anaerobic digestion systems. Initially, the company expects to create around 14 jobs, with the potential for more as demand grows.
OAREL, which has been established by Philip Taylor and Gary Douglas, plans to target the commercial rather than the residential market.
Mr Taylor and Mr Douglas believe the savings on electricity costs will be biggest for owners of small commercial and industrial premises which use large amounts of daytime electricity.
Managing director Philip Taylor said the company was attracting a great deal of interest and is already committed to invest £20m by March 2012.
He added: “We are already in advanced contract negotiations with a number of well-known businesses and are in discussions with a number of food processors, hotels, licensed premises, GP surgeries, retail outlets, manufacturing companies, facilities managers and ground rent portfolio landlords.”
OAREL is being launched at a time when electricity prices are rising and the Government is committed to obtaining 15 per cent of the UK’s energy requirements from renewable sources by 2020.
To meet this target, the Government is incentivising solar panel installations by offering Feed in Tariff payments (FITs) for the electricity they generate, which are guaranteed and index-linked for the next 25 years.
There are also export tariff payments available for any unused electricity that is fed back into the grid.
OAREL has been formed to take advantage of the growing demand in the UK 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 homeowners and businesses can choose to invest in the systems themselves, and take advantage of both free electricity and FIT payments, Mr Taylor and Mr Douglas believe 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 pay all the capital expenditure for supplying and fitting the solar panels, as well as the maintenance and insurance costs 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, the 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.
OAREL also expects to complete more than 500 home installations per month in the next two years.
Mr Taylor said yesterday: “We are forecasting that within two years the company will have invested around £100m in solar power generation systems and will be completing more than 500 commercial and 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.”
Source: By Greg Wright Deputy Business Editor of the Yorkshire Post
OAREL,renewable energy,solar panels,solar digest,www.solardigest.co.uk