Two Blues Solar to cut UK business’ energy spend due to joint venture with True Green Capital Management

Posted on 15 May 2024 by The Manufacturer

Two Blues Solar announces expansion of its UK investment capacity through a joint venture agreement with US renewable-focused private equity firm True Green Capital Management. The investment provides Two Blues Solar with capacity to fund and deploy up to 300 on-site solar projects to energy-intensive businesses over the next five years. With no upfront cost to customers, Two Blues Solar could save UK business as much as £260 million in energy costs over 25 years.

Nearly half of UK businesses are bracing for rising costs over the next year and 72% project high energy prices will negatively impact their profits over the next two years. Whilst wholesale energy prices have fallen since the record highs of 2022, they only reflect part of the broader energy expenditure for businesses. Notably, around half of a business’ energy bill goes towards funding non-commodity costs, including significant charges for grid upgrades. The UK Government’s commitment to a fully decarbonised electricity system by 2035 necessitates substantial investment in grid infrastructure, estimated at £170bn to £210bn, with UK businesses footing much of that cost. Forecasts indicate that prices will not revert to pre-crisis levels before 2030, suggesting that elevated energy costs will remain an ongoing concern for UK businesses.

Solar is one of the cheapest forms of renewable energy, yet it accounted for just 5% of the UK’s total energy production last year. There are hundreds of thousands of square meters of unutilised commercial roof space suitable for generating solar energy in the UK. The occupiers of these buildings are missing an opportunity to drastically cut their energy costs and reduce carbon emissions.

“It’s easy to suggest that solar should be part of every business’ strategy to combat long-term energy price increases and meet industry net zero targets,” explains Daniel Levene, co-founder of Two Blues Solar, “But that statement fails to consider the reality of the situation for many energy-intensive businesses. Prices are increasing across the board, and businesses have multiple priorities competing for their capital and time; many can’t prioritise investment in on-site power generation. We aim to help them achieve that.”

Two Blues Solar was established to address this problem and enable businesses to switch to solar energy with no upfront costs. The company mounts solar panels on commercial roof space or nearby land, selling the energy to the building occupier at rates up to 60% lower than traditional suppliers via a Power Purchase Agreement (PPA). The cost of a solar installation project for Two Blues is upwards of £200,000; these are projects traditional financing would typically discount as too small or misaligned with their rigid investment criteria. However, Two Blues Solar offers a flexible solution that caters to a wide range of business types and sizes, including tenants with short leases and landlords with diverse and complex property portfolios.

By mounting solar panels on a 2,500 sqm roof – a medium-sized factory or warehouse – occupiers could source around 320,000kWh/year. The average occupier would use around 80% of that, saving nearly £864,000 on energy costs and 1.8 kilotons of carbon over the lifespan of a typical PPA contract, based on current average prices.

The installation process, including securing the required permits, can be completed in as little as twenty-six weeks, after which Two Blues Solar retains ownership of the panels and takes full responsibility for ongoing maintenance, allowing businesses to quickly benefit from the reduced energy costs.

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