The potential for distributed energy to transform business in 2025

Distributed energy has a key role to play in the UK’s decarbonisation goals. It can be rapidly deployed and scaled, helping organisations to harness the benefits of clean energy quickly. Thanks to innovative funding options via power purchase agreements, these advantages can be achieved with no upfront costs at a time when business budgets and indeed competitiveness are under more scrutiny than ever. In this article, I take a look at some of the key trends that will help to drive adoption of distributed energy in 2025.

In December, Energy Minister Ed Milliband set out the Government’s action plan to achieve Clean Power by 2030. The ambitious target will involve reforming and expanding auctions for clean power capacity, significantly expanding the country’s electricity grid, speeding up connections to new projects and reforming the planning system.

The action plan sets particularly ambitious goals for solar energy expansion, with the aim of increasing the UK’s solar capacity from 16.6 GW to almost 47 GW by 2030, representing an additional 5 GW per annum within the next five years. This will require substantial investment in solar infrastructure, with incentives and grants expected to stimulate demand. In fact, Solar Energy UK expects the sector to exceed the goals set out in the Clean Power Plan.

Policy changes are already taking place. For example, the National Energy System Operator has recently announced urgent plans to shift the threshold for projects that need a transmission impact assessment (TIA) from 1MW to 5MW. This will make it much easier for smaller renewable schemes to connect to the distribution energy grid. Cutting this red tape will help businesses and developers avoid the costly delays of a TIAs and boost delivery of much-needed onsite renewable energy in the future.

Putting renewable generation at (or near) the point of consumption is proving to be a gamechanger for many businesses, with technological advances making these solutions quick and simple to deploy and their impacts easily measured.

Onsite generation is by far one of the cheapest and most efficient forms of energy available. Together with maturing funding models, it enables organisations to realise cost and carbon reductions without the worry of upfront investment.

Indeed, Power Purchase Agreements (PPAs) allow businesses and public sector organisations to tap into the potential of onsite renewable energy generation models with no upfront cost or ongoing maintenance charges. This transparency around how to manage the risks and costs of renewables, including enabling access to the latest storage technologies, means even more businesses will be able to access the benefits of renewables in 2025. Ultimately, businesses that can take advantage of onsite renewables can realise savings of as much as 30% on their energy costs, as well as strengthening their energy resilience.

The reality is that the appetite for clean energy is not just underpinned by environmental concerns or concerns about rising bills, it acknowledges the need to deliver greater energy security and independence.

In fact, there are many reasons why businesses and communities are looking to innovate when it comes to servicing their energy needs. Beyond a desire for increased efficiency, energy security and optimised cost control, it also helps to ensure compliance with decarbonisation targets and achieving ESG goals.

When combined with battery energy storage solutions, distributed energy can give businesses real confidence when it comes to managing the future cost and reliability of their energy requirements. After years of price volatility and geopolitical instability, we are seeing distributed energy gaining ground as an appealing option for progressive businesses, as well as communities looking to take greater control of their own energy needs.

While primary demand surrounds solar, we have also seen growing interest in the battery storage solutions that support energy security in a renewable energy sector that is largely driven by intermittent sources. Many business customers recognise that installing a combined solar and battery solution enables them to maximise their self-consumption of self-generated green energy.

As part of its focus on storage in the Clean Power Action Plan, the government is looking to make small scale energy storage even more accessible by removing financial barriers. This is part of a wider push to grow energy storage in the UK from 4.5GW to as much as 27GW.

More broadly, the deployment of onsite solar or wind generation, combined with energy storage, will help to create a stable and highly efficient energy ecosystem following a period of price volatility where weaknesses and vulnerabilities have been sharply exposed.

Last year was a record year for solar in the UK, with more than 2GW of rooftop solar installed on commercial and industrial rooftops. This is set to grow substantially in 2025.

Since launching AMPYR Distributed Energy in January 2024, we have already contracted £30m to financing commercial renewable energy projects, especially solar, with demand continuing to grow.

The projects we have enabled span a wide variety of sectors and requirements. From football stadia and shopping centres to industrial complexes and manufacturers, we are seeing a diverse number of organisations recognising the potential of onsite renewables to deliver significant long-term cost savings and greater energy security.

Our investment in new projects is accelerating, with many of these projects due to become operational in 2025 and set to deliver immediate savings.

As we look forward to 2025, our ambition is to continue investing in distributed energy projects across the UK and Europe, where the regulatory landscape continues to support the potential of onsite renewable energy to deliver significant cost savings alongside greater energy resilience for a wide range of communities – from industrial hubs through to residential centres.

There is no doubt that securing a resilient energy future will continue to prove a key concern for policymakers, businesses and communities alike in 2025, as new policy frameworks emerge in a rapidly changing geopolitical landscape. Private investment will continue to be a key enabler for the transition to a lower carbon future and we are excited to play our part in helping to drive the changes needed.

To partner AMPYR Distributed Energy on your business’  journey, contact us to discuss how we can work together.