(Bloomberg) -- European companies are rushing to get solar panels installed on the roofs and open spaces around their businesses to offset their exposure to the latest surge in natural gas and power prices since Russia invaded Ukraine.
Building some solar power generation is a relatively quick fix for soaring power bills, with installations taking less than a year. That means new panels could help reduce Europe’s most energy-intensive businesses from natural gas prices that have roughly tripled in the last three weeks.
That surge has sent customers flocking to call Harald Overholm, chief executive officer at Alight AB, a Stockholm-based company that builds and operates solar farms on-site for companies and then sells the power to them at fixed prices on 10 to 20 year contracts. Alight’s pipeline of sales has boomed to nearly 500 megawatts, up from about 170 megawatts just a few weeks ago.
“It’s insane what’s happening right now,” Overholm said in an interview. “They’re panicking about power prices.” Solar arrays at European businesses are set to jump by about 15% in Europe this year compared to 2021, according to data from BloombergNEF.
On-site solar arrays likely won’t cover all of a company’s energy demand, but they can get through the planning phase and construction in as little as nine months, according to Overholm. And speed is of the utmost importance for customers who can’t get relief from rising prices quickly enough.
“People want it tomorrow,” he said.
While demand for corporate power purchase agreements has mostly come from tech companies like Amazon.com Inc. and Alphabet Inc., those deals are typically to buy power from massive arrays of solar panels and wind turbines far from the site of consumption that would often require years of work to get approvals from local authorities and permission to connect to the electric grid.
Overholm says demand for the smaller, on-site solar plans he offers is coming from industrial clients like cement and paper producers. Clients with lots of sites so that even if the size of each solar array is limited, they can add up to reduce a significant amount of demand.
©2022 Bloomberg L.P.
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