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There are various ways your business can access solar energy, including purchasing solar panels outright, or entering a power purchase agreement (PPA) with an energy supplier.
Read on to learn more about whether solar would suit your business, and what you should consider to help you make the best decision.
Many businesses are considering solar as a way of simultaneously reducing their carbon footprint and their energy bills. There are many considerations to work through, including:
A large, unshaded roof is best for solar. If your roof is smaller, then your options are more limited, but many businesses are still making this work. Shading needs careful analysis, as this will reduce electricity generation. If it''s only occurring in the early morning and late afternoon, the impact may be relatively small.
Structural engineering considerations should be investigated early, as solar panels do add to the roof weight, which can be a significant issue in locations with high seismic loads.
Solar panels can be attached to most roof types. You should discuss with installers what fixing type and installation method they propose to use, and how this will affect the warranty of your roof. Also consider the expected life of your roofing material and any maintenance requirements on your roof.
Alternatives to installing on an existing roof are to establish a new roof over a car parking area, or to have the panels ground mounted if there is land space available around your business. Both of these options will add costs.
Solar will provide the best financial returns for businesses with high daytime electricity use.This is because you will maximise the value of your system by directly using the majority of the power generated on site.
For businesses who use most of their electricity during the day, when the solar panels are generating the most power, savings can be significant.
Understanding your business''s electrical energy profile is a great way to start. Ask your retailer if they can provide this information for each half hour of the last year. Also consider whether you could shift more of your existing electricity consumption to the daytime if you installed solar.
A business that has higher electricity prices will see the best returns from an investment in solar. You''ll need to consider how much your business pays for electricity at different times of the day and year, as this affects overall savings.
For businesses with higher energy consumption, it''s also likely that there will be more specific charges itemised on your bill. This will include lines charges for electricity transmission and distribution. The magnitude of these costs, and whether or not they are fixed, can have a significant influence on the financial payback of commercial-scale solar.
It''s likely that you''ll be exporting electricity to the grid at least some of the time, so you should look into how much you''ll get paid for this.
There will also be constraints on how much you can export. This will depend on the details of your individual connection to the network, and the design of the network in your wider area. This may be more of an issue if your on-site electricity consumption is highly variable, which will mean you''ll be exporting more often. A solar installer or consultant will liaise with your lines company to understand these constraints, which may influence the optimum system size.
As a rough guide, the cost of a commercial-scale solar system is likely to be in the range of $1500-2000 per kW of installed capacity. The cost per kW tends to be cheaper for larger scale systems. For a smaller 10 kW system, this could mean a price of around $20,000, while for a larger 100 kW system, this could mean a price of around $150,000. Actual prices will depend on the specifics of a given installation, and if your grid connection requires an upgrade this will add additional cost.
Routine maintenance to maximise output requires:
How frequently this needs to be carried out depends on the specific environment your business is located in. For example, annual cleaning of panels is generally sufficient, but sites in drier areas with more dust will need more regular cleaning to maximise output from the panels.
Inverters have a shorter lifetime. This is commonly assumed to be around 15 years, and your business case should include this.
The best system size is one that will give you the greatest return on investment. What this size is will depend on many of the factors discussed above, such as the proportion of electricity you use on-site, your electricity prices, how much you''ll get paid for exporting electricity to the grid, and what constraints there are on exporting. Part of the optimisation will also include the fact that larger systems are generally cheaper on a per-unit basis.
A solar installer or consultant can help you determine the best system size by analysing your energy use. A best practice analysis would include looking at a year''s worth of electricity consumption and potential generation at half-hourly resolution to determine the financial benefits.
Payback periods will vary depending on many of the factors discussed above, such as the proportion of electricity you use on-site, your electricity prices, and how much you''ll get paid for exporting electricity to the grid. Your cost of capital will also play a significant role.
Research published by EECA in 2021 (see below) used internal rate of return (IRR) as a metric for financial performance, and found that this varied between 0.4% and 8.6%. If the IRR is higher than your cost of capital (e.g. the interest rate on debt finance) then it will be a profitable investment.
The absolute numbers will have changed since the report has been published, but the range is likely to remain indicative.
Batteries can be controlled to perform both of these functions. For example, a typical mode of operation may be to charge overnight from the grid, use power from the batteries during the morning peak, charge during the day from on-site solar, and then use power from the batteries again during the evening. Depending on the size of your battery system and your energy needs, the battery discharge during peak times could be used on-site, or exported to the grid.
Another consideration with batteries is that they could allow your business to reduce some specific types of cost with are charged by your lines company. This is because correct operation of batteries should allow you to reduce the maximum power you draw from the network. This will be more applicable to larger businesses, that have a ''kVA capacity'' charge on their bill.
Given the above considerations, we would highly recommend discussing this with a specialist supplier, who can advise on both hardware requirements and the ongoing management of the system.
Most councils do not require building consents for installing solar panels, but there are exceptions to this – check with your local council.
Your local lines company will also have criteria you need to meet before you can connect your solar system to the network. These connection rules exist to prevent power lines from being overloaded. This process is best managed by a solar installer or consultant, who will understand the detailed technical requirements.
The carbon footprint of solar panels has decreased significantly over time as manufacturing processes have improved. Panels have also become more efficient, and warranted lifetimes have increased. All of this has increased the ''Energy Return on Investment'' or EROI, which is another measure of sustainability.
When your solar panels reach the end of their life, they can be recycled.
Solar panels produce DC (direct current) electricity that must be converted to AC (alternating current) electricity by an inverter.
It''s becoming increasingly common for the total installed capacity of solar panels (expressed in kW-DC), to be larger than the total capacity of the inverter (expressed in kW-AC) by between 10% and 30%. This is because inverters are a relatively expensive item, and the value of the inverter is maximised by having it operating at full capacity for more of the time. While this does mean that the output of the panels will be limited in the middle of the day and in the middle of summer, this is a small trade-off.
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