The costs of solar systems have dramatically reduced in recent years (particularly commercial systems). Combine these falling costs with rising electricity bills and the business case for solar makes more sense than ever.
It is a common misconception that solar power is only viable when there is a feed-in tariff available. In actual fact, a well sized system can pay for itself in as little as three years, even in the absence of a feed-in tariff.
There are a number of factors that will determine the payback period of a commercial solar system. The main factors are:
- How much electricity the solar system will produce – this is primarily driven by location but system specification will also play a part.
- How much of the electricity produced by the solar system is utilised – this will be determined by the electricity use profile of the business.
- The current electricity tariff of the business.
Whilst roof orientation and pitch do play a part in the annual production of a system, it is not a major factor and many roofs in Australia will be suitable for solar.
It may come as no surprise that a system installed in Australia will produce more than most places on Earth. The graph below shows the annual production of a solar system per kilowatt for various cities worldwide; Australian cities are amongst the highest.
Solar Production World WideAnnual Production per KiloWatt Installed
The components used in a solar system will also determine how much electricity it will produce, particularly in later years. Solar is a long term investment so it is vital to choose products that can stand the test of time. Our guide to choosing components explains what to look for when choosing a solar system.
When solar electricity produced is consumed on-site it will displace electricity purchased from the grid, with the subsequent savings being dependent on the electricity tariff of the business. A business whose electricity use profile aligns with the production of a solar system (i.e. consuming electricity while the sun is shining) is likely to see significant savings.
A utilised unit of solar energy is much more valuable than an exported unit (exported units often have no value). Thus the payback of a solar system is dependent on how much of the solar production is used on site – the utilisation rate. It is important to consider this when sizing a system, too large a system could result in a low utilisation rate and longer project returns. Any good, experienced solar provider will be able to help you assess what is the right sized system for your business. Our guide to choosing a commercial installer explains this in more detail.
Whilst there are many variables to consider before purchasing a solar system for your business, a well designed system can result in significant reductions in electricity bills, safeguarding against future electricity price rises, whilst also providing an excellent return on investment.
Solar Market appreciate that choosing to invest in a commercial system is a big decision. We can put you in touch with three professional accredited Solar Power Companies who specialise in providing Solar Power for Business (at no cost to you). They can provide you with a customised quotation outlining the capital outlays and investment returns on a Commercial Solar Power System.