One of the biggest overhead costs that your business faces is the cost of electricity. Worse, reliance on the commercial power grid subjects you to electric rate fluctuations. This often results in sudden price increases, affecting your cash flow management.
The good news? You can lessen your electricity costs by switching to solar. The question now is, how do you ensure you’re making the right commercial solar investment?
Energy consumption
What is the average energy consumption of your business? For instance, Australian small businesses use an average of 3,600 to 3,650 kWh of energy per quarter. However, energy usage is specific to each business and there are a lot of variables to consider, such as the size of the company, operating hours, energy efficiency, and overall power requirements.
According to the Australian Bureau of Statistics, the top most energy-intensive industries in the country are manufacturing and mining.
In a typical office environment in Australia, here are the biggest contributors to your energy bills:
· Air conditioning
· Lighting
· Heating
· Tech
· Refrigerators and dishwashers
Roof suitability
Your business’ roof is another important factor to consider when considering switching to business solar energy. There are different roofs used for businesses in Australia, and knowing them helps assess your roof’s suitability for solar panels.
- Corrugated metal: This type of roof can support the weight of solar panels and mounting systems. However, remember that the corrugations can interfere with the mounting system, which means you may need specialised brackets or adapters to ensure secure attachment. There are also some cases when additional structural support may be necessary, especially if you require larger solar panel arrays.
- Cladding: Some cladding materials can improve energy efficiency because it provide insulation or reflect sunlight. However, the specific material of the cladding may affect the compatibility with solar panel mounting systems. How the cladding is installed can also impact the feasibility of solar panel installation. For example, overlapping panels might require adjustments to the mounting system.
- Pitched roof: This kind of roof is indeed ideal for solar system installation. Still, it’s worth considering that some cases may require additional structural support for the mounting system.
- Flat roof: A flat roof can handle various solar panel configurations and sizes. Some considerations are there are flat roofs that may need additional ballast or structural reinforcement to support the weight of solar panels and mounting systems. There should also be proper drainage to prevent water pooling and potential damage to the roof or the solar system.
Government incentives
There are several government incentives business owners can take advantage of when switching to solar. These incentives are worth considering when choosing a solar system because you want to get the most out of your investment.
- Small-scale Renewable Energy Scheme (SRES): The SRES is a program based on tradeable certificates called Small-scale Technology Certificates (STCs). Eligible installations of rooftop solar can receive STCs creating a subsidy for households and businesses that install them. To be eligible for this, your solar system should be installed by a Solar Accreditation Australia accredited installer and the solar panels and inverter should be on the list of Clean Energy Council-approved modules and inverters.
- Large-scale Renewable Energy Target (LRET): The LRET creates Large-scale Generation Certificates (LGCs). Businesses with larger systems can qualify for LGCs. Now is the time to switch to solar for your business because LGCs and STCs will be phased out by 2030.
- Feed-in Tariffs (FiTs): FiTs are not solar rebates, but they are a financial incentive for installing solar and are available nationwide. FiTs pay your business a rate per kilowatt hour for any excess solar electricity you export to the grid. This will appear on your energy bill as a solar credit. Keep in mind that FiTs vary from state to state.
Other solar rebates per state
Northern Territory (NT)
NT businesses or not-for-profit organisations can take advantage of the Home and Business Battery Scheme to buy and install batteries and inverters. Eligible businesses can access a grant of $400 per kilowatt hour of useable battery system capacity, up to a maximum grant of $5000.
The battery systems must be on their official list that has been evaluated as virtual power plant capable.
Australian Capital Territory (ACT)
Your business may be eligible for up to $13,000 in rebates and technical advice through the Sustainable Business Program. The program enables business owners to book a free onsite assessment from technical experts and receive advice and a tailored action plan. It also provides access to resources, training, and rebates. The program can also accredit businesses and be recognised as a Sustainable Business.
Solar ROI
As a business owner, quick returns are vital for every investment that you make. The truth is, that the ROI for solar panels vary depending on various factors. On average, solar panel systems in the country have a typical payback period of between three and five years. What this means is that it takes around those years to recoup the initial investment through savings on energy bills. After the payback period, solar panels can continue to generate free electricity, which leads to ongoing savings.
Funds availability
You have a business to run, and it comes with a lot of operational costs to keep your company afloat. Before you switch to commercial solar, you need to consider the availability of your funds because solar systems require significant upfront costs, such as installation. Evaluate how the initial investment will affect your cash flow and also consider the long-term benefits of reduced energy costs and the potential for increased property value.
It’s also vital you assess your debt levels and financial stability before making a significant investment. Consider your risk tolerance and whether you’re comfortable with the potential financial risks associated with solar panel installation.
Solar for businesses offers a compelling opportunity for businesses in Australia to reduce energy costs. Considering the key factors, such as energy consumption patterns, roof suitability, and government incentives can help business owners make the right decision before investing in solar panel installation.Thinking of switching to commercial solar? Energy Matters can connect you to the top local solar installers in your area. Get your FREE solar quotes here.
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