Many people are surprised when they learn that the business case for commercial solar is often better than for residential solar. Most homeowners can achieve a payback on their solar panel system of between three to five years. For businesses – particularly those that operate 9 to 5 – the payback can be as quick as two and a half years.
Every business is different. But if your business’s electricity consumption is predominantly during daytime hours, you should be able to significantly reduce your energy overheads by installing solar, assuming the roof on your commercial premises is suitable for solar panels.
This blog describes the top ten benefits of installing solar power systems on commercial premises:
- Lower electricity bills
- Fast payback
- Cashflow positive with lease finance
- Better cost control
- Greater energy security
- Low maintenance
- Government solar rebates and incentives
- Reduce carbon emissions
- Boosted green credentials
- Increase value of your commercial property
1. Lower electricity bills
If your business operates during daytime hours and uses electricity, solar is a perfect match. That’s because when your business is busiest, that’s also when the solar panels produce the most electricity.
By using your self-generated solar electricity, you don’t need to buy expensive power from the grid. The savings can be as high as 20-30 cents per kilowatt hour, depending on your tariff.
The days of trying to earn money by exporting solar electricity to the grid have long gone. That’s because the feed-in tariff for solar exports has dropped and will continue to reduce in value. In contrast, grid electricity keeps getting more expensive so the less you use of it, the better.
2. Fast payback
The payback on commercial solar panel systems can be as quick as 2 to 3 years if your business has high daytime electricity usage and a suitable roof for solar.
The reason why the payback is so quick is thanks to a steady reduction in prices for solar power systems, massive improvements in solar efficiency, as well as government solar rebates and other financial incentives.
Since 2010, the prices for solar panels have reduced by around 80 per cent whilst, at the same time, the efficiency of panels has shot up from around 10 per cent to over 20 per cent. Likewise, the efficiency of solar inverters has increased to record levels, with top performing inverters operating at 98 to 99 per cent efficiency.
That’s why the payback on commercial solar is shorter now than it’s ever been.
3. Cashflow positive with lease finance
Lease finance for commercial solar panel systems can be a great alternative to cash purchase. Even for businesses with plenty of working capital, lease finance can be a better way to acquire a solar system than cash.
Why?
The reason is because the amount a business can save each month off its electricity bill by installing solar is usually more than the monthly lease repayment (this is certainly true for the majority of 9-5 businesses).
That’s why it is common for commercial solar panel systems to be cashflow positive from day one when purchased on lease finance.
Most of the lease agreement our commercial clients enter are for a period of 4 to 5 years. After that, they own the system outright with full bill savings going straight to boosting the bottom line.
Lease finance is also off-balance sheet; so acquiring solar on a lease has no impact on the business’s borrowing capacity.
4. Better cost control
Electricity can be one of the biggest overhead costs in many businesses. Without a solar power system, your business is fully exposed to any future increases in electricity prices.
With solar, your business benefits from greater cost certainty. Electricity bills will be lower, and more predictable. Your business will be protected from changes in the macro environment that impact on energy pricing.
Also, if your business decides to increase the use of electricity throughout its operations – for example with greater mechanization, installing EV charging for employees and customers, transitioning from gas to electric etc. – the solar infrastructure will be in place to make this feasible.
5. Greater energy security
Power outages are bad for business. Even short blackouts can bring down critical systems, causing disruption and loss of income.
Putting in place a solar and battery storage system that keep your business operating when there’s an outage can be a smart move. The savings from installing a suitable battery storage system can far outweigh the costs. This is particularly true if you factor in the associated costs if your business cannot function as normal.
6. Low maintenance
A quality solar panel system should operate effectively for at least 25 years. With technology improving all the time, the best solar panels now come with product warranties of 15 years as standard, some even longer!
The same is true for solar inverters. A few years ago, the typical product warranty for a solar inverter was 5 years. Now, the minimal commercial solar inverter warranty should be at least 10 years.
A full system warranty is another ‘must have’. The industry standard full system warranty is 5 years. If you purchase a solar panel system through Specialized Solar & Electrical, we provide a full system warranty for a minimum of 10 years.
7. Government solar rebates and 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 reduce the purchase price of a grid-connect solar panel system by around 30 per cent.
If your solar system is larger than 100kW, it should quality for Large-scale Generation Certificates, or LGCs. LGCs work differently from STCs, providing an ongoing revenue stream based on the megawatt hours of electricity that your system generates.
Some state governments and territories also provide commercial solar rebates and incentives to businesses. In addition, there are tax incentives for businesses installing solar.
Your business will only be eligible for government solar rebates if the system is purchased through a Clean Energy Council accredited solar installer using accredited solar panels and inverters.
The value of government solar rebates such as the STCs are currently high but will drop as this incentive is gradually phased out. By acting now, your business will benefit from a bigger reduction in the cost of the solar power system.
8. Reduce carbon emissions
For each kilowatt hour of solar electricity generated, around 1.08kg of CO2 emissions are saved according to the Australian Government report, National Greenhouse Accounts Factors.
To put this in context, a 100kW solar PV system in Victoria will save around 142 tonnes of CO2 emissions each year. Over the 25-year life of the system, the savings mount up to 3,550 tonnes, the equivalent of almost 700 fewer cars on our roads.
9. Boosted green credentials
In 2019, a survey found that 65.7 per cent of Australian consumers would be more likely to buy a product or service from a company that used renewables. Even more significantly, 78.9 per cent of those polled agreed that Australian companies should use more solar and wind to power their operations.
This shows that installing solar panels on your business not only cuts your overheads – it can also increase sales.
10. Increase the value of your commercial property
A well-designed solar power system 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.
How much value a solar power system will add to your commercial property will depend on various factors including:
- Size of system
- Quality of system
- How well the system is performing in terms of generation
- Percentage of total electricity provided by the system
- Age of system
- Remaining warranties
Request a commercial solar quote
Get in touch if you would like advice and a quotation for installing solar on your commercial premises.
No matter whether you’re talking about a small solar panel system for a micro business or a massive 100kW installation, we have the skills and expertise to design and install a customized solution for your organization.
Take control of your energy costs with solar.
Specialized Solar & Electrical is a Clean Energy Accredited Solar Retailer, a Registered Electrical Contractor and employs Clean Energy Council Accredited Installers.
