How the EU solar mandate will impact commercial buildings in Finland

The European Union has recently announced a bold plan to become independent from Russian fossil fuels and accelerate the green transition in response to Russia's invasion of Ukraine. The plan, called REPowerEU, includes a solar energy strategy that sets ambitious targets and initiatives for the deployment of solar photovoltaic (PV) panels across the bloc.

One of the most significant initiatives is the introduction of a legally binding EU solar rooftop obligation that will ensure the installation of solar panels on buildings. According to the European Commission, this obligation will apply to:

• All new public and commercial buildings with useful floor area larger than 250 m2 by 2026
• All existing public and commercial buildings with useful floor area larger than 250 m2 by 2027
• All new residential buildings by 2029.

Source

On the 8th of December 2023, the Ministry of the Environment of the Finnish Government released an official article:

According to the provisional agreement, there would be strengthened requirements on the number of recharging points in both residential and non-residential buildings. Pre-cabling would become the norm for new and renovated buildings, thus facilitating access to recharging infrastructure. All new residential and non-residential buildings should have zero on-site emissions from fossil fuels as of 1 January 2028. Solar electricity systems should be gradually installed starting from 2027 where this is technically, economically and functionally feasible. Member States would also have to increase measures with the aim to completely phase-out of fossil fuels in heating and cooling by 2040.

But why should commercial building owners and managers in Finland comply with this obligation? What are the benefits and challenges of installing solar PV systems on commercial rooftops? And how can they prepare for this transition? In this blog post, I will try to answer these questions and provide some insights and tips on how to make the most of the EU solar mandate for commercial buildings in Finland.

The benefits of solar PV for commercial buildings

Installing solar PV systems on commercial rooftops can bring multiple benefits for building owners and managers, as well as for the environment and society. Some of these benefits are:

- Reduced energy bills: Solar PV systems can generate electricity that can be used to power the building's appliances, lighting, heating, cooling, and ventilation systems, reducing the need to buy electricity from the grid. Depending on the size and location of the system, the electricity generation profile, and the electricity tariff, solar PV systems can save up to 50% of the electricity costs for commercial buildings, according to a study by VTT Technical Research Centre of Finland.

- Increased property value: Solar PV systems can increase the attractiveness and value of commercial properties, as they demonstrate environmental responsibility, reduce operating costs, and improve energy performance ratings. A study by the Lawrence Berkeley National Laboratory in the US found that home buyers were willing to pay a premium of about 4% for homes with solar PV systems. A similar effect could be expected for commercial properties, especially in light of the EU's energy performance certificates (EPCs) scheme, which rates buildings according to their energy efficiency and carbon emissions.

- Reduced carbon footprint: Solar PV systems can reduce greenhouse gas emissions from commercial buildings by displacing fossil fuel-based electricity from the grid. According to the International Energy Agency (IEA), solar PV systems can avoid about 0.5 kg of CO2 emissions per kWh of electricity generated. This means that a typical 100 kWp solar PV system installed on a commercial rooftop in Finland could avoid about 40 tonnes of CO2 emissions per year, equivalent to taking about 9 cars off the road.

- Enhanced reputation: Solar PV systems can enhance the reputation and image of commercial buildings and their occupants, as they signal their commitment to sustainability, innovation, and social responsibility. This can improve customer loyalty, employee satisfaction, stakeholder relations, and brand value. A survey by Nielsen found that 66% of global consumers are willing to pay more for products and services from companies that are committed to positive social and environmental impact.

The challenges of solar PV for commercial buildings

Despite these benefits, installing solar PV systems on commercial rooftops also poses some challenges that need to be addressed and overcome. Some of these challenges are:

- High upfront costs: Solar PV systems require a significant initial investment that can deter some building owners and managers from adopting them. The average cost of installing a solar PV system on a commercial rooftop in Finland is about €1.2 per Wp, according to SolarPower Europe. This means that a typical 100 kWp system would cost about €120,000. However, this cost can be reduced by taking advantage of various incentives and financing options available in Finland and in the EU (see below).

- Complex permitting procedures: Solar PV systems need to obtain various permits and approvals from different authorities before they can be installed and connected to the grid. These include building permits, electrical permits, grid connection agreements, fire safety certificates, environmental impact assessments, etc. The permitting process can be lengthy, costly, and uncertain, depending on the local regulations and practices. The European Commission aims to simplify and shorten this process through its permitting package (see below).

- Structural engineering issues: Solar PV systems add weight and wind load to the rooftops of commercial buildings, which may not have been designed to support them. Therefore, a structural engineering assessment is needed to determine the roof's capacity and suitability for solar PV installation. This assessment may require additional costs and modifications to the roof structure, such as reinforcement, waterproofing, or insulation.

- Technical and operational issues: Solar PV systems need to be properly designed, installed, and maintained to ensure optimal performance and safety. This requires technical expertise, quality equipment, and regular monitoring and servicing. Some of the technical and operational issues that may arise include shading, mismatch, degradation, faults, theft, vandalism, etc. These issues can reduce the output and lifespan of the system and increase the risks of fire or electrocution.

How to prepare for the EU solar mandate for commercial buildings

Given the benefits and challenges of installing solar PV systems on commercial rooftops, how can commercial building owners and managers in Finland prepare for the EU solar mandate and make the most of this opportunity? Here are some steps and tips to consider:

- Assess the potential and feasibility of solar PV for your building: The first step is to evaluate the potential and feasibility of installing a solar PV system on your building's rooftop. You can use online tools such as Google's Project Sunroof or Solargis to estimate the solar irradiation, electricity generation, and savings potential of your rooftop. You can also consult with a professional solar installer or engineer to conduct a site visit and a detailed technical and economic analysis of your rooftop.

- Explore the incentives and financing options available: The second step is to explore the various incentives and financing options available for solar PV projects in Finland and in the EU. Some of these include:

- Net metering: Net metering is a billing mechanism that allows solar PV producers to offset their electricity consumption from the grid with their electricity generation from their system. In Finland, there is a net metering scheme for small-scale renewable energy producers (up to 100 kW) that allows them to deduct their electricity generation from their electricity consumption on an annual basis. However, this scheme does not apply to network fees or taxes, which account for about 70% of the electricity bill.

- Tax deductions: Tax deductions are reductions in the taxable income or profits for solar PV investments or expenses. In Finland, there is a tax deduction scheme for households that allows them to deduct 50% of the labor costs related to solar PV installation from their income tax. However, this scheme does not apply to commercial buildings or other costs such as materials or equipment.

- Grants and subsidies: Grants and subsidies are direct payments or discounts made by the government or other entities for solar PV projects or components. In Finland, there are various grants and subsidies available for solar PV projects from different sources, such as:

- The Ministry of Economic Affairs and Employment (TEM), which provides grants for renewable energy investments by companies, municipalities, communities, and non-profit organizations. The grant covers up to 25% of the eligible costs of the project (up to €5 million), depending on the size, type, and location of the project.

- The Finnish Innovation Fund (Sitra), which provides grants for innovative projects that promote circular economy and carbon neutrality. The grant covers up to 50% of the eligible costs of the project (up to €1 million), depending on the novelty, impact, scalability, and feasibility of the project.

- The Finnish Environment Institute (SYKE), which provides grants for projects that improve energy efficiency and reduce greenhouse gas emissions in buildings. The grant covers up to 40% of the eligible costs of the project (up to €500,000), depending on the type and size of the building and the energy saving potential of the project.

- The European Regional Development Fund (ERDF), which provides grants for projects that support regional development, innovation, competitiveness, and sustainability in Finland. The grant covers up to 50% of the eligible costs of the project (up to €10 million), depending on the region, theme, and objectives of the project.

To conclude, I hope this blog has given you some insights into the challenges and opportunities of PV roof top projects. If you are interested in learning more or need professional assistance with your designs, engineering and feasibility studies, please feel free to contact me or any of the PV solar experts and consultants in Welado. I would love to hear from you and discuss how we can work together to make your PV roof top dreams a reality. Thank you for reading and stay tuned for more updates on my LinkedIn page.

Christopher Murray, chris.murray@welado.fi, +358 40 149 3888

EPC Project Manager & PV Solar expert | BMS & HVAC | Finland