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Should I install solar on my commercial premises?

Should I install solar on my commercial premises?

If your business operates 9-5, installing solar is a great way to reduce your electricity costs and improve your bottom line.

It’s also a terrific way to demonstrate your business’s green credentials; something that will win you brownie points with many customers.

And, because of the fast payback on commercial solar, the financial case for solar is generally strong for both tenants and owner/occupiers.

On this blog, the 10 reasons why you should consider installing solar on your commercial premises:

  1. Be cashflow positive from day 1
  2. Achieve a fast payback
  3. Reduce electricity bills
  4. Improve cost control
  5. Achieve a more secure energy supply
  6. Benefit from low maintenance / high reliability
  7. Access government incentives
  8. Reduce carbon emissions
  9. Boost your green credentials
  10. Add commercial value to your property

 

  1. Be cashflow positive from day 1

Whilst some businesses prefer to pay outright for solar, lease financing can be a great alternative.

If your business has high daytime electricity usage, we guarantee that we can design a solar panel system for you on lease finance that will be cashflow positive from day 1.

That means that the lease repayments will be less than the electricity bill savings from solar.

Typically, most commercial clients take out lease finance over a 4-to-5-year period.  After that, the full value of the electricity bill savings goes straight to the bottom line for the next 20-25 years.

Lease finance is also off-balance sheet, and therefore does not have a negative impact on your business’s borrowing capacity.

  1. Achieve a fast payback

Thanks to a combination of falling prices for solar panels and generous government incentives, the payback on commercial solar systems can be as quick as 2-3 years – and around five years for 100kW plus system.

Every business is different in terms of the financial viability for solar and this is something we accurately model for your business as part of our commercial solar proposal and quotation service.

The table below shows the typical prices, solar generation, annual savings, and payback for different size commercial solar power systems offered through SolarRun.

Prices, bill savings and payback for different size commercial solar systems

PriceDaily solar generationYearly savings, approxPayback
40kW solar system$20,000-$30,000 (net of STC rebate)140kWh$13,2002-3 years
100kW solar system$70,000-$90,000 (net of STC rebate)360kWh$28,0003-4 years
100kW+ solar system$1,200 per kW installed360kWh (per 100kW installed)$28,000 (per 100kW installed)4-5 years

Note: All figures are approximates. Prices are subject to change without notice.

  1. Reduce electricity bills

Solar panels generate electricity when most businesses are at their busiest – which is also when they’re using the most electricity. That’s why installing solar is a great way to reduce your business’s electricity bills.

By utilizing the free electricity from your solar system, your business reduces its requirement for grid power.  Given that the amount most businesses pay for grid power is more than what they can make by selling their power back to the grid, utilizing self-generated power in the business is where the greatest bill savings are to be made.

  1. Improve cost control

Every business wants predictability when it comes to costs.  By installing solar, your business takes control over a major portion of its electricity bill.  This reduces your business’s exposure to electricity price inflation.

What’s more, if your business wants to increase the use of electricity throughout its operations – through greater mechanization or by converting from gas to electric – the solar infrastructure will be in place to make this possible.

  1. Achieve a more secure energy supply

Without electricity, most businesses would come to a grinding halt. Even short power outages can be detrimental to most businesses.  And, for some businesses, the financial consequences can be devastating.

Fortunately, solar is now a mature technology that can provide complete energy security even in emergency situations where there’s a power outage lasting days or weeks.

Whether your business requires a solar panel system with the highest levels of reliability, battery storage with full back-up, or even an off-grid system, the team at SolarRun can design a solar solution that will provide your business with a reliable source of electricity, 24/7.

  1. Benefit from low maintenance / high reliability

High quality solar panels are designed to handled climatic extremes and should operate effectively for 25 years or more.  Some of the best solar panels come with 25-year product warranties, in addition to a 25-year performance warranty.

Solar inverters are also becoming more robust with many of the leading inverter manufacturers increasing their product warranties to 12 or 15 years.

And if you buy a solar panel system from SolarRun, no matter where you are in Australia, you’ll always get a whole-of-system warranty [link to post on Difference between workmanship warranty and full system warranty] for five years.  That’s a no-quibbles guarantee that we’ll fix your system at no cost to your business should anything go wrong in the first five years.

  1. Access government incentives

The Australian Federal Government provides environmental certificates for businesses installing solar panels which significantly reduces the cost of solar.

If the solar panel installation is under 100kW, it should qualify for Small-scale Technology Certificates or STCs which effectively work as a point-of-sale discount on the purchase price of a solar system.

As shown in the table below, the value of STCs depends on where in Australia your business is located.

Value of STC discount for 40kW and 100kW commercial solar systems

40kW Solar System STC discount100kw Solar System STC discount
Amount STC CertificatesSTC Rebate amount ex GSTAmount STC CertificatesSTC Rebate amount ex GST
Victoria426$15,7621065$39,405
NSW497$18,3891242$45,954
Queensland497$18,3891242$45,954
South Australia497$18,3891242$45,954
Perth497$18,3891242$45,954
Tasmania426$15,7621065$39,405
Northern Territory552$20,4241381$51,097

If your solar system is larger than 100kW, it should quality for Large-scale Generation Certificates, or LGCs. LGCs work differently from STCs in that LGCs are paid out every 6 months based on the solar generation of your solar system.  One LGC is created for every megawatt hour of electricity your system generates.

Both STCs and LGCs are gradually reducing in value each year and will be phased out completely by 31 December 2030.  By acting now, you’ll be able to get the maximum value from this government solar incentive before the value drops.

It’s also worth noting that some Australian states and territories also provide incentives for businesses to install solar power.

In all cases, your business will only qualify for these incentives if the solar panel system is purchased through a Clean Energy Council (CEC) Accredited Solar and comprises of solar panels and inverters that are on the CEC approved product list

These incentives change from time to time, so get in touch if you’d like to know what solar incentives and rebates your business may be eligible for.

  1. Reduce carbon emissions

With climate change now a mainstream issue, many businesses want to reduce their carbon footprint.  Because grid electricity is still predominantly generated from fossil fuels, using solar electricity instead of grid power is a far cleaner, greener way to power your business.

According to the Australian Government report, National Greenhouse Accounts Factors, for each kilowatt hour of solar electricity produced, there’s a saving of around 1.08kg of CO2 emissions

That means a 100kW commercial solar system in Victoria will save approximately 142 tonnes of CO2 emissions annually and 3,550 tonnes over 25 years.  That’s the equivalent of just over 700 less cars on our roads over the typical lifetime of a solar system.

  1. Boost your green credentials

Solar panels on your commercial premises are a clear message that your business cares about the environment.  If you want to go further, installing a TV screen in your foyer or workplace showing the real-time status of your solar power system also visibility demonstrates that your organization cares enough to invest in renewable energy.

This is backed up by research. In 2019, an Australian survey found that consumers want businesses to use renewable energy in their operations.  The research found that that 65.7 per cent of people would be more likely to buy a product or service from a company that used renewables and that 78.9 per cent of those polled agreed Australian companies should be using more solar and wind to power their operations.

This shows that investing in solar can also be good for sales!

  1. Add commercial value to your property

A well-designed solar power system on a suitable roof is an asset that will increase the value of your commercial property. Potential purchasers will view solar panels on your property as an advantage because it reduces the overheads of any business operating from those premises. Using the solar monitoring system that’s part of your system, you’ll be able to demonstrate to interested buyers exactly how much power is generated by the system and how this would reduce their electricity bills.

The question of exactly how much value a solar power system will add to your commercial property will depend on various factors including system size, percentage of grid electricity offset by solar, age of system and warranty duration.   This highlights the importance of ensuring you choose the right solar company [link to blog about how to choose the right solar company] for your solar project.

Request a commercial solar quote

Get in touch if you’d like advice and a quotation for installing solar on your commercial premises.

Solar Run is a Clean Energy Council Accredited Solar Retailer and one of Australia’s top four solar installers by volume.  We have the skills and expertise in commercial solar to ensure you get the best solar power system for your business.  No matter whether you’re looking for a 20kW system or a 100kW-plus solar installation, we can help.

And when it comes to financing, we’ve got the solutions ready-to-go as well.  No matter whether it’s low-cost lease financing, a loan, or a Power Purchase Agreement, we can arrange the best financing to meet your business requirements.

We understand you need numbers to base your decision on.  That’s why in our proposal, we’ll clearly itemize:

  • system cost
  • projected year 1 bill savings
  • solar generation by month (in kWh or mWh)
  • return on investment
  • payback period

We leave nothing to chance when it comes to solar.  And we back up every solar system we install with a whole-of-system 5-year warranty which means you’re covered for every eventuality.

Take control of your electricity costs and contact us today.

 

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