Is commercial solar a good investment for Australian businesses?

Australian companies looking to cut energy costs have probably wondered whether it is worth investing in rooftop solar power. Over the past 10 years, electricity prices have doubled in Australia and are expected to rise a further 4% per year over the next five years. Commercial solar power, once seen as an expensive alternative energy source, has now become increasingly profitable and one of the safest investments of 2021. In fact, the latest figures show that Australian companies are currently using rooftop solar power save up to 31% of their energy costs compared to businesses using the grid.

This article will discuss everything you need to know about commercial solar power: what the benefits are, how much do systems cost, what government discounts and incentives are available, and more.

Will my business benefit from a solar photovoltaic system?

Electricity is a significant operating cost for most businesses, many of which use most of their electricity during daylight hours. This is a perfect match for solar power, as your business can use all the energy produced at the time of production.

Installing photovoltaic solar panels on your roof will reduce the amount of energy the business uses from the grid, which means lower energy bills. In most cases, an investment in solar power can generate a quick return on investment and long-term savings. In fact, most businesses will recoup the cost of their solar investment in just a few years. Businesses that consume a lot of electricity and rely heavily on the grid will benefit the most from solar panels.

For example: a small business consuming 50,000 kilowatt hours per year that installs a 15 kW system can displace an average of 33% of its electricity consumption.

The other benefits are that the systems are easy to maintain and, if you own the business premises, installing panels can also increase the resale value of your property.

Finally, going solar means you are reducing your company’s carbon footprint. While your investment may be purely financial, many of your customers care deeply about creating a greener, cleaner world for future generations. Promoting your new green status can help generate new business and new referrals.

How much do commercial solar photovoltaic systems cost?

The cost of installing a commercial solar system can vary widely and is influenced by a variety of factors depending on where you live, the retailer or installer you choose, the warranties available, and the technology and size of the system. your system.

The main factors that will affect the price of a solar system are:

  • Current government discounts and incentives
  • Installation costs
  • Type and number of panels
  • UPS type and size
  • Type of framing equipment and other system components
  • After-sales service contracts

The table below provides an estimate of the average cost of commercial solar systems by city and size in August 2021.

What discounts and incentives are available?

The main federal government incentives take the form of Renewable Energy Certificates (RECs). There are two types of certificates issued:

  • Small Scale Technology (STC) Certificates – for solar panel systems ≤ 100 kW
  • Large Scale Production Certificates (LGC) – for solar panel systems> 100 kW

STCs and LGCs are tradable products attached to eligible installations of solar energy systems. In a commercial-sized solar system, their value can reach several thousand dollars.

Many solar installers will offer you a point-of-sale discount if you choose to give them your STC or LGC. This saves you valuable time and saves you the trouble of trying to redeem the certificates yourself.

At the state government level, incentives can vary widely.

If you produce more energy than you use with a commercial solar system, the excess electricity can be fed back into the grid in exchange for money. This is called a feed-in tariff and the amount varies from state to state.

As feed-in tariffs have fallen steadily in recent years, you are likely to get the most out of your solar system through “self-consumption”, so it is important that your installer matches the size of your system to your average consumption.

Some states offer their own commercial solar incentives. For example, the government of the state of Victoria currently offers a Solar for Business discount to small businesses. This initiative reduces the initial cost of installing an approved small-scale solar PV system up to 30 kW.

Aside from federal and state rebates, there are many options that can help you with the initial cost of switching to solar power. These include power purchase contracts (PPAs), operating leases and financing options. In many cases, your entire system is written off and no upfront funding is required.

Which panels should I buy?

A good rule of thumb is to only buy well-known brand name brand panels and inverters from companies with a history of operating in Australia.

For the fastest return on investment (ROI), high-quality panels and high-end inverter technology can be delivered in as little as 2 years. Premium systems will save you more money in the long run, due to higher efficiency and a slower rate of degradation. With high efficiency panels, you can also achieve a larger system with limited roof space.

What is involved in the installation process?

A typical commercial solar installation involves 6 key steps:

  1. Design and feasibility
  2. Product selection
  3. Quote and agreement
  4. Request for construction approval (if applicable)
  5. Network installation / connection
  6. Request government discounts / organize feed-in tariffs

Further information on this process is available from the Clean Energy Council.

What if I don’t own my building? Are there any alternatives?

A common barrier for companies installing solar PV systems is building ownership. As solar systems are long-term investments and involve making modifications to the building, tenants may have difficulty securing landlord permission and long-term financing agreements. It may be worth exploring the possibility of entering into a solar panel agreement with your legal entity or landlord as part of your rental terms. This agreement could determine the responsibilities of you and your landlord in the installation and maintenance of a solar photovoltaic system.

Where can I find a trusted installer?

You’ll want to partner with a trusted installer whose company holds the appropriate accreditations. A reputable and experienced installer, ideally one whose business has been in existence for at least five years, can provide you with sound advice and quality products that will best meet your business needs.

The verdict…

If you are looking for a way to dramatically reduce your business energy costs and get a return on your investment in just a few years, then investing in commercial solar panels is worth considering. Remember, it’s important to find a trusted installer who knows how to size and install quality panels correctly so that your business can reap these benefits.

Energy Matters has done the hard work for you and selected a network of trusted and skilled solar installers. Receive up to 3 free solar quotes without obligation– it will only take a few minutes and you will be on your way to reaping the rewards of a smart investment.

About Lois Mendez

Lois Mendez

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