Guide: Why Commercial Solar Could Be Perfect for Your Business
As a business owner, using solar panels for your office, warehouse, or any other structure, may seem risky. The concept can be quite confusing and complex. Perhaps you have heard about more prominent companies going solar. Even if you know some of the advantages, you still think it is not feasible for your business to have a solar system installed.
Here is the good news though: commercial solar is for businesses of any size. It does not matter if you are running a Fortune 500 company, midsize, or a start-up. You do not have to operate a mall or a giant tech company to see the benefits. Solar systems are useful, which is why many businesses now capitalise on their financial opportunities. It proves that a solar power system can be a part of a strategic decision that guarantees a financial return for the company.
Who Should Use Solar?
Everyone uses electricity, which is why solar can be beneficial for all types of businesses. If you use electric power for lights, computing, HVAC, and production processes, you can turn to a solar system. Having solar panels installed will help reduce costs for utility bills.
While solar is a good fit for everyone, you may be wondering whether or not it is right for your business. After all, it requires you to invest in the panels and other hardware.
Quality candidates for solar array installation, with or without storage (batteries), include the following companies:
- Those that operate in states that have expensive electric bills. According to reports, the most expensive state is South Australia, where the average power usage is 37.62c per kWh. New South Wales follows with 27.56c per kWh. Apart from the most expensive charge, SA also misses out on many discounts and bonuses. Meanwhile, Victoria and Queensland have the cheapest energy. Western Australians pay around $1,800 yearly.
- Businesses wanting to save money turn to solar. Instead of paying for the high power bills, they wish to focus on other expenditures, including personnel and operations.
- Companies that manage different locations that have vast rooftops can easily install solar panels.
- If your firm prioritises offsetting consumption of electricity at a local level, using solar systems is beneficial for you.
- Some companies can also take advantage of solar systems by incorporating them into their marketing campaigns. Many customers opt for businesses that commit to sustainability.
- If your business has a large energy load requirement, solar is helpful.
Along with the increasing utility, prices are the lowering costs of buying and installing solar panels. If you are among those companies listed above, you can truly benefit from having a solar system.
Solar power is indeed a cost-effective alternative energy source for business owners. However, many small and medium companies think that the system is only for large organisations. After all, more than 100 well-known companies, such as Target, Apple, Intel, and IKEA, use solar.
If you have a small or medium-sized business – or even a non-profit organisation, you may wonder whether or not solar can benefit you. In reality, it requires upfront payment. For start-ups, the cost may not be handled easily.
At first glance, it does seem like solar power requires a hefty investment. However, it does offer a ton of advantages, especially when it comes to saving money.
Businesses that plan to expand in the next few years can invest in solar now. It will help avoid the additional expenses that would have been allocated to utility bills. As you already know, expansions can lead to growth-related costs, such as requiring more electrical power as the facilities develop. Some companies combine solar with infrastructure improvements, especially roof repairs.
If you are still unconvinced, perhaps it is better to look at how solar can benefit your business. Here are the top gains of going solar, whether you have a small or medium-sized firm:
Most small businesses run during daylight hours. At this time, they consume a considerable amount of power. According to the Australian Bureau of Statistics, companies typically utilise almost 155,000 gigawatt-hours every year. Depending on the size of the firm, it can cost up to $20.2 billion. Of course, smaller companies consume a lot less but using solar can cover 60% or more of the current electric bill.
Over time, it can lead to significant savings. You will notice the dramatic reduction in power costs when your bill arrives. If you are in an area where net metering is allowed, you can even earn some revenue due to the excess power you have produced.
The cost reduction will depend on different factors, such as the size of the facilities, industry, time of operations, and location. Companies that can truly benefit from switching to solar are those that build the right system size to meet their energy requirements. There should also be enough rooftop space and intense sunlight to generate power.
You can automatically get a competitive advantage with solar in a few ways. First is that you free up financial resources, allowing you to target business innovation. Second is the ability for you to earn the recognition as one of the businesses switching to a renewable power source. Customers now look for a brand that is environmentally-responsible. With solar, you can talk about sustainability and even market yourself as a renewable company.
Aside from cutting costs, you also get the advantage of rebates and incentives from the state and federal governments. Take a look at the following figures:
- Starting May 12, 2015 to June 30, 2019, companies that have a turnover of less than $2 million yearly could claim an asset write-off on every purchase below $20,000. If you have already bought solar during this period, you can get a rebate on your solar and battery installations.
- Australian companies also benefit from small-scale technology certificates (STCs). These certificates have a dollar value, which you can redeem in a market that the government regulates. EasySolar can arrange the STCs for you, which can be given as a point-of-sale discount off of the original cost of solar systems and their installation. This way, you do not have to register for the market and sell the STCs on your own.
- Feed-in tariffs are also among the solar incentives to know about. Your business will send excess power to your retailer, which will pay you back for the electricity you feed into the grid. The rates and requirements vary depending on your location. In Perth, the charge per kWh is 33.4 cents, and the feed-in tariff is 7.1 cents, which is higher than Brisbane and Darwin.
Note though that the STC scheme will soon phase out by 2030. It is why you should try to get solar as quickly as possible.
Return on Investment in Three Years or Less
In the long-term, you can get a free source of electricity through solar. The real benefit of solar begins when you get to enjoy the free supply of energy for the next several years. You also do not have to pay much on maintenance. With solar arrays offering 25-year performance warranties, you can be sure of the reliability of the products.
A rule of thumb is that business investments are worthy only if they pay themselves within seven years. Solar systems are even quicker than this standard rule. If you operate in Perth and you use solar 25% of all your power consumption, you can get your investment back in 4.4 years. However, if you depend on solar 50% of the time, the ROI is exactly three years.
Electricity prices will continue to soar over the next decade or even longer. Feed-in tariffs, on the other hand, are getting more attractive. Add to that the high output of solar systems and you easily get an excellent return on your investment.
Increased Property Value
Having panels installed on your roof can add value to your property asset. Your customers or buyers will recognise the benefit of having electricity generated onsite, which will enhance the desirability of the business premises.
Other Things to Know about Solar System Installation for Businesses
If you are about to get started on commercial solar, there are a few considerations to make:
If you operate a business in a building that you own, there is usually no problem in the installation. You are in control of the whole roof area, so you do not require permission from the landlord. Meanwhile, if you are renting, you will need to talk to the building owner first.
How often you do you receive your power bill? Do you know the total cost monthly, quarterly, and yearly? Aside from these questions, you should also determine your consumption patterns. If you operate nine-to-five five days a week, you probably require power throughout the day.
The idea of using solar is to offset your consumption. If there are adjustments to make, you should do so to use more power when your business is running.
How much money are you prepared to invest in solar? As a business owner, you already have many other costs to think about. Solar can be a hefty addition, which is why you should plan your financial resources accordingly.
The prices can differ on the location, the installer, and the product. On average, you need to prepare $13,000 more or less for a 10kW package. The cost increases based on size. If you choose a 30kW package, expect to shell out anywhere from $33,000 to $35,000. For a 100kW system, the average cost is $107,000.
Having money in the bank can be beneficial here. However, if you do not have cash at the moment, you can still use loans, operating leases, or power purchase agreements (PPAs).
The size of your solar system will depend on your available roof space. You need to design a system that meets the power needs of your business while trying to limit exported energy. It may be tempting to take advantage of the feed-in tariff at this point. After all, your electricity retailer will pay you back for the power that you do not consume.
However, your primary goal should be to have a system that provides an alternative source of energy for your business. It should not be about getting tariffs from the power retailer.
Another thing to consider is the exact size and needs of your business. The Australian Bureau of Statistics defines small businesses as those companies that have fewer than 20 employees. If your firm is small and only has up to 19 people, you may not require a large system. In general, small businesses can benefit from five to 20 kilowatts capacity.
Most companies today use three-phase power. However, it does not mean that single-phase commercial properties do not exist. To avoid paying for the export limited system, the business can use a five-kilowatt inverter coupled with 6.66 kilowatts solar panels.
If you ask whether or not you are entitled to a government rebate, the short answer is YES. Rebates, in the form of small-scale technology certificates (STCs), can give plenty of incentive for those wanting to invest in solar for the first time.
To make sure you are getting what you pay for, the general rule of thumb is to compare the rebate with the solar install price. The reimbursement should be about 1/3 off the original price of installation.
Plenty of solar panels and inverters, as well as batteries, are on the market these days. As much as possible, you should only trust Bloomberg Tier One panels. Here at EasySolar, we only install panels in the Tier 1 ranking, which gives you the peace of mind that you get quality products. Some of these brands include Q-Cells, Jinko Solar, LG Electronics, Risen Energy, and LONGi.