Making the most of renewables
The installation boom in renewables may have subsided, but SELECT Member Greg Hutchings says the sector still holds plenty of opportunities
Knowing the rules around wind turbines has helped the business
As a marketplace largely governed by subsidy schemes, long-term success in renewables depends on innovation, the right expertise and making sure the sector doesn’t dominate your business.
That’s what Greg Hutchings of Dumfries-based Lotus Electrical Services Limited has found.
He explained how the firm’s early entry into the market and ability to navigate the finer points of feed-in tariffs (FiTs) have given it an advantage. “When solar panels and wind turbines started becoming popular in industry we turned our attention to the sector and became MCS certified,” he said. “In the first year of our involvement almost a quarter of our turnover was in renewables, although importantly, it never grew beyond that.”
The installation boom in the sector lasted for a few short years before a change in government incentives and other developments saw it falter. As a result, many of the companies that had relied on that business coming in began to disappear.
Learning the rules
However, Lotus Electrical had maintained its interest and become familiar with the workings of Ofgem, the regulatory authority that deals with FiTs and other compliance qualifications. This started to have benefits. Greg said: “We could enter into client dialogue early because we knew what Ofgem required, helping make sure a development was compliant and eligible for FiT.
“For example, if someone had solar panels and wanted to add a wind turbine they’d face a challenge. Since the solar panels would attract a different tariff to the turbine, close negotiation would be required to navigate Ofgem’s rules and claim for both sources.”
Outside these cases, Greg has found an even healthier source of business: “Most of our renewables work now focuses on people who have capitalised on their initial investment and want to benefit further by using the electricity they’re generating while keeping their existing incentive payment.”
He highlighted the case of a commercial client with a large wind turbine who’d never been able to use the power it generated because it had been given an independent supply from the distribution network operator – power went straight to the grid. Greg negotiated with Scottish Power to reconfigure the connection. As a result, the company is saving £10,000 a month in electricity costs. “It was complicated and needed 18 months of negotiation,” he said.
Good for everyone
Greg believes renewables aren’t just great for his business but for the wider industry. “There are lots of opportunities out there,” he said. “Every electrician needs to make sure they know about renewable systems because I get at least one or two enquiries every day from people who want wind turbines/solar panels fixed and/or checked.
“What’s more, an electrical installation requires an electrical installation condition report (EICR) to be carried out every five or 10 years. There is EICR work here for electricians and lots of it.”
He receives regular requests for commercial EICRs on farms and other businesses with wind turbines or solar panels. Greg explained: “It’s not just the farm that needs the EICR but the renewable generation systems too. Insurance firms know there’s a significant risk and cost implication if the wiring to a renewable system is not up to scratch.”
High voltage help
The company’s expertise in high voltage work has also had spin-offs in renewables. Greg said: “As a result of additional training in high voltage work we’ve been able to develop interesting and innovative ideas for clients.
“When an installation gets to six or seven years old it’s almost paid for itself and the owner thinks about what’s next.
“We can help them use the electricity they generate by creating private high voltage networks.
“For example, one of our clients had three wind turbines and four chicken farms. We were able to take the power from the turbines to those farms and now he gets free heat.
“In fact, there’s so much power that he’s able to make the conditions two degrees warmer than before and he’s noticed a 20% drop in the amount of food his chickens eat.”
It’s that kind of initiative that can help any contractor make the most of the growing opportunities in renewables. And Greg is ready to lend his firm’s expertise to joint projects.
“If a firm has a one-off project where they need specialist input – and they don’t want to spend a lot of money training one of their guys to be a high voltage engineer – we’re more than happy to help.”
The Lotus Position
Greg Hutchings established Lotus Electrical 20 years ago as a sole trader and now employs 36 staff.
He said: “I served a domestic apprenticeship but got the chance to go overseas and learn more industrial electrical work.
“I then travelled around the UK before returning to Dumfries and Galloway to start the company.” That diverse experience meant that in the early days of the company it was able to combine bread and butter domestic work with more specialised contracts.
That proved a healthy mix. In year two Greg employed his first electrician and it’s been steady growth since then. For the company’s 20th anniversary Greg worked out that it had grown by an average of 26% a year.
Although Lotus Electrical Services Limited describes itself as a rural contractor its area of operation extends from Carlisle in the south up to Glasgow and Edinburgh.
For project work, the firm has coverage across the UK and has even completed joint projects as far afield as southern Ireland.