As a newcomer to the world of solar power, you’ll likely have a lot of questions as to how the power of solar can save you money. Particularly as a commercial solar panels purchaser, you’ll need to understand how the correct commercial solar setup can increase energy savings while being more efficient, greener and ultimately, a more cost-effective power solution for your commercial building.
Why Install Solar Panels on Your Commercial Property?
As a business, your bottom line is your primary concern. While commercial solar panels may seem unnecessary, with the staggering increased cost of electricity in Australia, solar panels are a no-brainer whether you’re using an entirely solar setup or are looking to install a more moderate size system to take the greatest load off your electricity bill.
The Sizes of Commercial Solar Panel Setups
There are different types of commercial solar setups, depending on how many kilowatts of power you use per month. To work this out, you’ll need to conduct an energy audit and then work with solar installation technicians like us to determine which solar panel size makes sense for your needs.
Less Than 30KW
These smaller systems are perfect for small commercial spaces, like a small mobile phone repair shop or a small art gallery that requires good lighting and low-draw devices like laptops and printers. Because of the size of the system, it is possible to achieve complete self-sufficiency, which is a huge positive for small businesses capitalising on solar power. If your system reaches this 100% self-sufficiency level, you could save up to $2000 per month!
At less than thirty kilowatts, you can expect your solar array to be smaller, requiring much less roof space. For example, a 10kW system will likely require between 400 and 475 square metres of roof space.
30-100KW
As you climb the wattage ladder to the 30 to 100-kilowatt range, the advantages of solar energy become more apparent, but also more expensive, as they require special permissions to be connected to the electrical grid due to the amount of power they can generate.
These systems could require as much as 500 to 600 square metres of roof space and are the perfect application for moderately-sized commercial properties, drawing moderate to high amounts of power. Because of the amount of power generated, these are typically used by moderately-sized office buildings and smaller retail spaces.
100+ Watts
Regarding solar system installations in Sydney that are greater than 100W, businesses must also install a solar power meter that tracks their energy generation. They are also required to report their solar generation annually. However, because of the power generated, these large systems are only installed in businesses like medium-to-large factories, hotels and large office buildings.
Unfortunately, commercial solar systems of this scale are no longer eligible for the Australian Government’s STC Rebate. Still, they qualify for the Government’s LGC Rebate program, which covers large commercial solar projects.
250+ Watts
When you reach this scale, you’re talking about solar farms and large shopping centres. Because of the whopping size (over 1200 square metres in many cases) of these solar packages, they require a team of specialist technicians to conduct the solar installation.
How Do You Connect Your Large-Scale Commercial Solar to the Grid?
When looking for a large-scale solar solution for your business needs, you’ll want to talk to a solar installation specialist for anything larger than, say, a 30Kw solar system. For perspective, a 10Kw solar system is the typical size of a residential solar panel system for a four or less-bedroom house.
Typically, for these large-scale systems, your local electricity provider (and the Government of Australia) mandates that you install an export limiting device on your commercial solar panels above 30Kw. This export-limiting device requires extra hardware and increases the price of solar panels initially.
In contrast, your solar installation can qualify for an STC rebate, so you’ll get your money back near-immediately. But for larger systems, the LGC rebate means incurring even greater upfront costs to install the export limiter while not seeing those rewards till the end of the fiscal year.
Connecting large-scale solar systems to the grid requires a design and a quote from your solar installers in Sydney, whichever company you choose. You must also present this plan of action, along with a quote from the company, to your local council for approval.
How Much Does a Commercial Solar Install Cost?
The price of solar panels very much depends on the size of your solar array. Typically, commercial solar installations can run between $1,000 and $1,300 per kilowatt. These are cost averages based on the units-plus-installation for between 30 and 100-kilowatt systems. To save money, customers sometimes use microinverters or power optimisers, despite this costing more in upfront expenses.
For smaller systems between 20 and 30 kilowatts, you can expect to pay around $800 per kilowatt for installation.
If you’re considering switching to solar panels, get a few different solar power system prices from different solar energy companies. They may put a large emphasis on the amount of savings you’ll have in power generation. However, the overall “raw consumption” of electricity and the associated costs tend to be low anyway. The real savings will be in associated fees and other charges.
How Much of That Money Will I Get Back?
To determine exactly how much money you’ll receive from your initial costs, you’ll need to ensure that your panels come with a solar energy generation and electrical consumption monitoring system. You can use these numbers to do your math as to how much money you’re saving year-on-year. However, typically, a commercial solar installation over 30Kw will pay for itself within five years.
The smaller systems of 20 to 30Kw and below will take about four years to pay for themselves.
What About Rebates?
To encourage more people to install solar panels, the Government has initiated (or had longstanding) reimbursement schemes for residential solar panel installation. There are three main initiatives to encourage solar panel use among residential and commercial customers.
Small-Scale Technology Certificates (STCs)
First introduced in 2011, STCs are offered for residential and commercial property owners wishing to install solar panels on their roofs. These are funds made available directly to the individual or business by the Australian government in a bid to help cover some of the initial price of solar panels and their installation.
STCs can only be applied for installations up to 100W. After that threshold, they are no longer deemed ‘small scale’. Although STCs are the perfect option for small and medium-sized businesses looking to get their first solar system up and running.
States Offering Solar Rebates
Outside of the federal government, many Australian states also offer an incentive program. These are smaller scale but can help to cover different things like solar installation costs or the cost of a solar battery. Solar batteries usually come as part of an array, but small-scale businesses can buy individual Lithium-ion batteries.
The states that offer solar rebates are New South Wales, Victoria, Queensland, Western Australia, South Australia, the Northern Territory and the Australian Capital Territory.
LGCs for Large-Scale Installations
For 100+Kw installations, the Australian Government opted for a different solution than an upfront assistance payment due to the high costs of installing such large systems. Their answer was the Large-scale Generation Certificate.
The incentive provided by the LGC is based on the amount of electricity your system generates to the grid, requiring you to install a power generation monitor to track electricity generation and your rebate to be issued annually. The LGC is priced at 1LGC per kilowatt hour generated.
Monitoring and Maintaining Your Large-Scale Solar System
Any large-scale solar system installation must be monitored and maintained effectively and often to maximise its benefits. No large-scale solar system should be installed without monitoring devices because you won’t have the added benefit of seeing the changes in your electrical bills without sufficient monitoring of generation and consumption.
Sometimes, an initial solar panel installation will have insufficient or ineffective monitoring software, as businesses are often under-sold on the importance of effective monitoring by an energy company’s salesman. As a company investing tens or hundreds of thousands of dollars in a solar energy system, you must insist upon a solar monitoring system that tracks your gross consumption, providing a ‘before and after’ picture of how your expensive solar panels are helping your business to save money.
Effective solar monitoring should be done by a designated person within your organisation to avoid overcomplicating a simple process. Additionally, your solar panel installers should perform an inspection every six or twelve months, depending on the specifics of their maintenance contract for your system.
This maintenance inspection should be thorough and provide a report on usage and tips on saving even more money or if any parts of your system may benefit from an upgrade.
Which Type of Panel Installation Works Best for Your Business?
There are a couple of different types of panel installation options for commercial solar packages. Solar panels are very heavy, especially in large-scale applications such as those over 100 kilowatts, so you must be mindful of your commercial building’s roof integrity.
While roof-mounted solar panels are a fantastic option for smaller-scale operations like smaller retail spaces, anything over 100W or 250W may benefit from a ground-mounted solar panel array. Ground-mounted panels are also cheaper than the traditional tilt-style roof-mounted options.
If you have a lot of structurally sound roof real estate, then a roof-mounted option may be best for a large-scale application. However, the ground-mounted option makes the most sense if you’re a smaller business with enough ground space for a 30Kw array.
How to Finance a Commercial Solar System
When financing a commercial solar system, there are three main options for businesses that want a commercial solar array.
Cash/Capital Expenditure
One of the most common ways to finance a solar panel setup for your business is to buy the product and installation at cost. This is also the fastest way to begin recouping that expense, as you will immediately begin seeing the investment pay for itself.
However, it is worth noting that large-scale commercial solar represents a high cost for your business. In many cases, with smaller businesses, despite the desire to go solar and the lower cost of a smaller system, the capital just doesn’t exist yet to make it worthwhile.
Power Purchasing Agreement
This is one avenue that smaller businesses can use to purchase their solar solution. A power purchasing agreement, or PPA, allows for a third-party retailer to use your roofing space for their system and then sells you the electricity generated by that system at a fixed rate, not including inflation.
The beauty of a PPA is that you don’t own nor are responsible for the upfront installation costs, nor the cost and potential headaches involved with maintaining the panels themselves. However, you will be obligated to buy all of the electricity generated, regardless of how efficient (or not) the solar set-up is.
A Power Purchasing Agreement strictly limits your control over your costs in the long term but could be a beneficial option if your electricity bills are extremely high.
Business Loan
Business loans are another common way for smaller and medium-sized businesses to buy into the solar market. It’s a great way to act as a cash buyer without having all of the required cash in hand to buy your commercial solar setup outright.
Using a business loan as a way to pay for a commercial solar installation makes perfect sense, if your loan interest rate is lower than the amount you’ll save in making the switch to solar energy.
Check with your state government to find out about any other programs they may offer.
What to Expect From an Energy Profile Analysis
If you want to schedule your solar panel installation in Sydney, any energy company that wants your business should always conduct an energy profile analysis first. This will give them a glimpse into your current energy consumption and allow them to understand how you want to save money by using their solar package.
An energy profile analysis will include:
● How your business is currently billed for its electricity use.
● An energy consumption analysis.
● A site visit and roof inspection to see whether the solar panel system that you need will fit on your roof.
● A conversation to better understand your business needs, goals and current power usage.
Once the analysis is complete, you can expect a detailed quote and analysis of how using their solar panels will save you money, complete with numbers and cash flow analysis.
Choosing an Inverter for Your System
There are three types of solar inverters used in commercial solar installations. These are:
● Microinverters
● Chained string inverters
● Large-scale inverters
An inverter is the most critical piece of solar panel array infrastructure, as it converts direct current into alternating current, which is then used by the electrical grid. Essentially, an inverter allows the panels to function as an electrification system for your business.
Microinverters
Microinverters are about half the size of a briefcase and are generally used in applications below 30Kw in power generated. These can be fixed to a wall or roof for easy access. However, microinverters are only designed to handle so much current, so they are not commonly found among most commercial solar panel setups.
Chained String Inverters
Chained string inverters are groups of briefcase-sized inverters that are portable. They come with most roof-based setups over 30Kw and are cheaper than a microinverter or a power optimiser by about 20%.
Large Scale Inverters
Large-scale inverters are mostly only used in huge operations that are over 250 Kilowatts in size. These can be so large that they require heavy equipment to lift and move. Therefore, they are not suitable for most roof-based applications and could be installed in an outside area instead.
Final Thoughts
Going solar remains a very attractive option for businesses large and small, as energy costs in Australia continue to increase. Not only are they a more cost-effective option, but because of the amount of sun that much of the country is exposed to year-round, they pay for themselves more quickly by having a near-constant solar energy source.
If you’ve noticed that your bills are skyrocketing and are wondering if solar panels are the answer, check with your solar panel installation company to see if your roof space is the perfect place to have them or if your oversized car park could be used instead. Speak to the Bare Energy team to learn more about commercial solar installation.
