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Written by: Briain Kelly, Editor

Benefits of solar for hospitality

Businesses that invest in solar energy benefit in multiple ways. They significantly reduce electricity costs, the impact of power outages, and your carbon footprint. Solar panels will also improve your reputation for sustainability.

Reduce energy costs

Energy costs are one of the biggest expenses for businesses. Commercial solar panels reduce these costs, allowing you to reinvest or pass savings on to customers, gaining an edge over your competitors.

Blackout protection

Power outages are inconvenient at home but can be crippling for a business, forcing you to shut down. Solar panels combined with battery storage can make sure that guests aren’t left in the dark during a blackout.

Sell surplus energy

Unlike homes, businesses in the hospitality and leisure sector tend to have steady high electricity usage throughout the day. This means that there won’t be as much surplus power, but what there is can still be sold back to the grid to help with reducing hotel operating costs.

Improve green brand image

Tourists are more concerned about their environmental impact than ever before, and many take sustainability into account when booking holidays. Reducing your hotel’s carbon footprint can help to attract eco-conscious guests.

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Cost of solar for hospitality businesses

Solar panels for hospitality businesses typically cost between €1,200 and €1,700 per kWp. The total cost will depend on the system size and site-specific requirements affecting the installation work.

These are guide figures only, and the only way to get an accurate figure is to get a quote from an installer after a site survey.

What affects the cost?

There are a number of factors that affect the cost of commercial solar panels for hospitality businesses.

  • System size: The number of solar panels you get, along with additional extras such as battery storage, power optimisers and EV chargers.

  • Ease of access: Installing solar panels is easier and more straightforward on low rise buildings than taller properties such as multi-storey hotels.

  • Materials used: The type and quality of the solar panels installed as well as other materials will affect the price.

Reducing the cost of solar PV

Businesses can reduce the cost of installing solar by taking advantage of grant funding and other financial incentives. 

  • SEAI grants: The SEAI has a substantial solar grant programme to help businesses with the cost of installing solar.

  • Reduced VAT rate: Businesses installing solar panels as part of a ‘supply and install’ contract will pay the reduced VAT rate of 13.5%.

  • VAT reclaim: Businesses which are VAT registered can reclaim the VAT paid on solar installations.

  • Accelerated Capital Allowance: Businesses can write off the net cost of installing solar panels against their profits that year via the ACA scheme.

How much can you save?

Due to the energy-intensive nature of hotels and restaurants, the savings as a percentage of overall electricity costs is much lower compared to homes. However, they are still capable of reducing hospitality electricity costs by over €20,000 a year.

Key Point: Hotels often have a relatively small footprint for their high energy usage. While a 200kWp system might be ideal for a larger hotel, roof space will be a hard limit in many cases.

Getting solar panels with no upfront cost

It is also possible to get solar panels for your business without having to pay any upfront installation costs. This is done through a Power Purchase Agreement (PPA), which can be an attractive option for hotels with high electricity bills that want to avoid capital expenditure.

  • No investment required: The solar company pays for the installation and maintenance of the solar panels.

  • How you save: The business buys the solar electricity at a reduced cost compared to regular prices.

Solar panel grants for hospitality

The SEAI Non-Domestic Microgen Grant can help with the purchase of solar panels for hospitality businesses with funding that covers 20 – 25% of the cost. This is open to all non-residential applicants, such as hotels and restaurants, that meet the eligibility criteria.

  • Eligibility: The grant is available for businesses with properties built before 2021.

  • Funding: The grant value depends on the system size, with funding paid per kWp of solar capacity installed.

Learn more about the eligibility criteria and how to apply for the solar grant for businesses.

Solar for different hospitality businesses

While the principles we have mentioned above are true for all businesses in the hospitality and leisure industry, there are others that are more specific. Bars, restaurants, and hotels can all have factors that make solar more attractive to them, or hurdles specific to their businesses.

  • Extra services: Hotels almost always have a restaurant and bar, and often have gyms, spas and other services that raise their electricity consumption.
  • Historic buildings: Some hotels in much older buildings are protected structures, which can make it harder to install solar panels.
  • Multiple buildings: Hotels with multiple buildings (connected blocks, self-catering apartments, etc.) can have more space to install solar panels. It can also be more expensive, requiring additional electrical work and more inverters.

  • Late service: Bar activity often continues late into the night, long after solar panels have stopped making electricity. Battery storage will be essential to keep using solar energy into the evening.
  • Business interruption: Pubs in towns and cities will have to plan their solar installation time to minimise the amount of disruption it causes to business.
  • Planning requirements vary: Many pubs in Ireland are protected structures or in an architectural conservation area. The rules for what work you can do with a protected structure vary between local authorities.

  • Protecting food: Having backup power with blackout protection can be even more important for businesses in the food industry. A power outage can destroy all food stock that needs to be kept refrigerated or frozen.
  • Late start: The working day with restaurants can often start later in the afternoon, missing out on the hours solar panels are most productive. Battery storage or a good feed-in tariff are essential to get the most from them.
  • Roof clutter: Mechanical ventilation and air conditioning can use up roof space on a restaurant. Your solar PV system will need to be designed around this.

  • Mixed-use tax treatment: Solar panels on a B&B can receive the 0% VAT rate where they are partially or fully intended for the residential element of the building.
  • Less energy intensive: B&Bs are less energy-intensive than hotels or restaurants. This means that solar panels can cover a far greater portion of their total energy usage.

Green credentials for hospitality

Installing solar panels on a hospitality business can make it significantly more eco-friendly and help it become certified under the Green Hospitality Programme. This is a nationally and internationally recognised accreditation for businesses in the hospitality sector pursuing sustainable practices.

Holidaymakers are increasingly interested in sustainable tourism. Both booking.com and Google Travel allow users to filter for eco-certified hotels.

One criterion for the Gold Award under this programme is to generate at least 20% of a business’s electricity from an on-site renewable source, such as solar power.

Certification audits of businesses are carried out by 3rd party auditors.

Mistakes to avoid when getting solar

Not planning around renovations

If a hotel or other business is planning extensions or renovations which involve work on the roof, these should be completed before installing solar. Alternatively, solar should be installed at the same time as the roof works.

Not matching solar energy production to your energy usage

Solar is most lucrative when offsetting electricity use rather than exporting power. Your solar PV output, and battery storage capacity, should be sized to utilise solar power when demand is highest. Understand your daily electricity usage curve before investing in solar.

Not looking at reducing electricity use

Before buying solar, businesses should first try to reduce their electricity consumption. Energy-efficient lighting, improved insulation, and newer appliances are just a few of the ways to reduce energy usage.

FAQs

Yes, hotels and other hospitality businesses will benefit from adding battery storage along with their solar panels. Even without surplus solar electricity, batteries can be charged at night to be used at times of peak electricity demand.

In most cases hotels will not need planning approval for solar. Rooftop solar is exempt from planning permission unless the building is a protected structure or in a designated zone near an airport or helipad. Ground-mounted solar panels are also exempt unless they cover more than 300sqm.

Most hotels will recover the cost of solar panels in 4 – 5 years, assuming they qualify for a grant. This is better than residential solar because the installation costs benefit from economies of scale.

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