Belonging to a solar community also cuts the electricity bills of housing company residents

Although it is the darkest time of the year, just before Christmas, the sun, which has barely managed to climb above the horizon, has awaken the 262 solar panels that cover the roof of Kuitinmäki shopping centre.

“Even on the darkest day of the year, the solar power plant managed to produce a couple of kilowatt-hours of electricity,” says Mika Koskinen, Kiinteistö Oy Kuunsilta board member.

In the summertime midday sun, the shopping centre roof collects the same amount of electricity in a matter of minutes.

The property’s solar power plant, completed in 2019, also has the honour of being the first solar community in the entire Espoo. Through the solar community, energy produced by the power plant is distributed not only to the property company but also to its shareholders.

Solar communities were made possible by a Government decree amendment that entered into force in January 2021 and allowed the distribution of solar power to company apartments without transfer fees and electricity tax.  Prior to the amendment, produced power could only be used to cover the consumption of shared facilities, now solar panels are also cutting the residents’ personal electricity bills. This has made it equally profitable for property and housing companies to invest in solar power as it has been for owners of detached homes.

Establishing a solar community in Espoo is easy. Solar community can be set up simply by fill in an online form at the local grid company Caruna’s virtane.fi service.

“It does not cost anything, but the solar panels will then also bring savings to residents,” says Laura Sohlman, Customer Experience Manager at Caruna.

Sohlman says that in late 2021, there were already more than 1,000 small-scale solar power producers in Espoo. Up until now, most small-scale solar power producers have been owners of detached homes. The share of apartment buildings and terraced houses in solar power plants in Espoo is only a couple of per cent. However, the decree amendment improved the profitability of solar power both for property and housing companies. 

The tenants of Kuitinmäki shopping centre have already reaped the benefits of belonging to a solar community.

“For example, the Olarium gym operating in the shopping centre saved hundreds of euros in their electricity bill during the summer months,” says Mika Koskinen.

During its first two years, the solar power plant has generated approximately 65,000 kWh of electricity per year.

“Roughly half of the production goes towards the property’s electricity consumption, one fourth is distributed among the shareholders and one fourth is sold to the grid,” Koskinen says.

Establishing the solar community made the power plant even more profitable also for the shareholders, who financed the investment. Now the shareholders, too, have access to some of the electricity produced by their solar power plant.  During sunny hours, the solar power plant generates more electricity than the property itself consumes and this surplus energy is distributed to the use of the apartments in the building in relation to the number of shares they hold. If an apartment fails to consume all of the energy distributed, the property company sells the surplus energy to the grid at market price. 

Under normal circumstances, consuming the produced electricity within the property is the most profitable option. However, on the day this interview was made, the wintery weather had raised the price of electricity sky-high, it was dozens of cents per kilowatt-hour.

“At the moment, selling electricity to the grid would be an excellent business,” says Koskinen.

However, around Christmas time, the power plant only produced moderate amounts of energy, but the sun will be much higher already in February. Cold, bright spring days are excellent for solar power production.

“The cold weather improves the panels’ production rates.”

Mika Koskinen became the driving force behind their solar power project as a result of his concern for climate change.

“I used to live in China, where pollution and the impact of climate change were much more visible than they are here.”

However, profitability is what sold the project to the board of the property company.

“Nobody in their right mind would object to a scheme that will pay itself back in reasonable time and then continue to cut down maintenance charges,” Koskinen says.

Solar power systems are usually scaled so that most of the energy produced can be consumed on location. However, in Kuitinmäki, the entire roof was covered with panels, and surplus production is sold to the grid at market price.

“When we added installation costs and all the other costs, this turned out to be relatively cheaper,” says Koskinen.

Thanks to some serious tendering by Koskinen and the BusinessFinland investment aid, the power plant ended up costing the company €60,000.

“It brings an annual saving of €7,000–€9,000 in the electricity bill, depending on the price of electricity.”

The shareholders’ own electricity bills were also cut by more than €2,000 per year. The calculated pay-back time of this large solar power plant is approximately 7 years.

Koskinen, who is an entrepreneur himself, is also happy that the project supported local businesses.

“The panels on our roof were manufactured in Finland, and an Espoo-based company took care of the installation work.”

Laura Sohlman from Caruna says that solar communities are now being established by pioneers, such as Mika Koskinen.

“Now that the decree amendment has made this also profitable for housing companies, there is a huge potential,” Sohlman says.

Only a couple of solar communities have been established thus far, but Sohlman says that they have started to receive more and more inquires on the matter.

“It takes time before these inquiries turn into power plants connected to the grid.”

The popularity of solar power plants is slowed down by the lengthy decision-making process, as such investments always require a decision by the housing company’s general meeting. The coronavirus pandemic seems to have put off many investment decisions.

On the other hand, the constantly rising electricity prices appear to have increased the interest in solar power, as has the construction of electric car charging points, which many housing companies are facing.

“When these charging points are added, I am sure we will also begin to see a rise in solar panel installations,” Sohlman predicts.

The rows of solar panels installed on the roof of Kuitinmäki shopping centre are only at the beginning of their 30-year life-span.

“I really cannot think of a better investment. Already within the next 20 years, this system will have paid itself back many times over,” Mika Koskinen says.

The savings in future electricity bills will secure the housing company risk-free profit for decades to come.

“With the solar community, all residents will also gain concrete benefits from the investment made by the housing company,” says Laura Sohlman.

Housing companies’ solar power investments also support the City of Espoo’s ambitious goal to achieve carbon neutrality by 2030.

“Increasing local production of solar power and other renewable energy is one of the goals of the City of Espoo Strategy, or the Espoo Story. Energy communities are an excellent example of a new sustainable operating model that encourages investing in renewable energy, reduces emissions and adds to communality,” says Development Manager Elina Wanne.

Wanne is responsible for energy at the City of Espoo’s Centre of Excellence for Sustainable Development.

At the Virtane.fi service, Espoo-based property and housing companies can establish a solar community and put their solar power project or electric car charging point supplier to tender.

https://www.virtane.fi/(external link, opens in a new window)

In spring 2022, a survey will be conducted to seek effective solutions to promote renewable energy, energy citizenship and energy communities in Espoo. Presentation and discussion events will be held on the survey results and operating models for housing companies, businesses and residents during the coming spring and autumn.

RAKKE and KETO projects enable this solar community article, the survey and events.

The City of Espoo Solution path to sustainable growth ecosystems (RAKKE) project is funded by the Uusimaa sustainable growth and vitality support (UKKE) funding.

The Implementation Pathway for Environments that Accelerate Sustainable Growth (KETO) project is funded by the Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU) funding. The project will be conducted together with VTT, Aalto University and Omnia.