Are you considering a 25kW commercial solar system for your business in Melbourne?
There are some critical things to consider before buying. Below, we explain some key considerations when investing in commercial solar photovoltaic systems.
Commercial Solar Systems
Before you invest in a commercial solar photovoltaic system, you need to know the return on investment (ROI).
You also need to know the optimal system design based on how much electricity you consume.
Our comprehensive buyer’s guide covers the key considerations including:
• Pricing for commercial solar
• Extra installation costs
• Funding options for commercial solar installations
• How solar government rebates work with commercial solar systems
Each commercial solar photovoltaic system is unique. Trione provides a free in-depth feasibility study for your business.
Commercial Solar Power in Melbourne
For businesses in Melbourne and other Victorian cities, solar power is a smart investment. The potential savings per month on electricity costs are very appealing.
Let’s look at some key points regarding commercial solar power systems. And the benefits of solar power for local businesses in Melbourne.
How Can A Business Gain From A Commercial Solar Power System?
According to the Bureau of Meteorology, the average amount of long-term sunlight irradiance in the Melbourne area is about 4.18 hours daily.
This is an average daily figure based on 12-month data. It considers cloudy days, rainy days, and seasonal fluctuations.
How does it relate to photovoltaic panels?
Each kilowatt (kW) of solar panel capacity can generate, on average, 4.18 kilowatt hours (kWh) of electricity.
The estimated average output from a 25kW commercial solar system installed in Melbourne is 32.85 kWh per year. This is an average annual figure and reflects changes in weather conditions throughout the seasons.
So, we can now predict the savings your business can enjoy with a 25kW commercial solar PV system.
|System Capacity||Avg: Daily Solar Energy Generated (kWh)||Avg: Annual Solar Generation (kWh)||Business Electricity Rate Paid||Estimated Annual Savings (70% Self-Consumption)|
|25kw||32.85||11,990||$0.25 / kWh||$2,098|
Estimated savings – 25kW Commercial Solar System. Note: Data is indicative and real-world yields may vary depending on the precise location, PV panel tilt angle, orientation, and other PV system components.
Take advantage of Trione’s experience for a full analysis of the optimal system size and design for your business. This will help you to maximise savings each month.
Commercial Solar System Costs
Today, it is more affordable than ever to install a commercial solar power system.
Solar power is now 82% cheaper than a decade ago, according to the International Renewable Energy Agency. And the drive for green and renewable sources of energy is gathering momentum.
The adoption of solar power is supported by federal government solar incentives as part of the Australian Renewable Energy Target (RET).
There are two forms of RET incentive:
• STC (Small-scale Technology Certificate), an upfront incentive for systems rated at 100kW or less.
• LGC (Large-scale Technology Certificate), an ongoing government incentive for solar energy systems with a capacity greater than 100kW (expires in 2030)
How Much Does A 25kW Commercial Solar System Cost?
The exact cost of 25kW commercial solar system installations depends on location, the exact site of the business premises, and components.
A Word on Solar Products and Components
It is possible to buy a cheap 25kW solar system. There are many cheap Chinese inverters and other solar products in the market.
But when investing in a long-term solar PV solution, the cheapest is not always the best choice. For example, a cheap system with 12 months of warranty does not give you much peace of mind.
Remember, a solar power system normally operates for 25 years or more.
High Quality – High Efficiency – Better Results
You should consider the quality and longevity of all components proposed for the system. Problem-solving and troubleshooting cheap products and components over several years can quickly add extra expense to the initial cheap costs.
Achieving optimal savings depends on quality. So beware!
As a rough guide, expect to pay around $44,000 for a top-of-the-range 25kW solar system. Top systems feature Tier 1 high efficiency solar photovoltaic panels from TRINA, SUNPOWER, and other leading solar brands. And these systems use premium solar inverter brands such as SMA, Fronius, and ABB.
Benefits of Solar Systems For Businesses
High efficiency commercial solar power systems have few moving parts. So required maintenance is minimal. After installation, you can expect your system to operate for 25-30 years.
But be aware that:
- Solar inverters are the one component you should expect to replace, typically after 10-15 years of use.
- Solar PV panels need regular cleaning, normally twice a year if installed on a flat roof. The frequency of cleaning needed depends on weather conditions and other factors.
- A qualified installer should inspect the solar panels for any damage and ensure the integrity of electrical connections on site. A site inspection should be done every 5 years.
Commercial Solar Power Systems And Tax Benefits
Registered ABN holders have an opportunity to claim GST credits and depreciation on their solar energy system yields.
Generally, any finance repayments are treated as tax-deductible. So, almost any solar power project will be cash flow positive immediately.
Above all, the regular savings obtained on your business electricity bill will be greater than any loan repayments to finance the system. Especially since the business electricity tariff rate continues rising.
Solar Power Finance Options in Melbourne
Below is an outline of three of the most widely-used financing options by Australian business owners for commercial solar PV systems.
These options require no upfront investment and give immediate positive cash flow.
How it works
- System acts as collateral for mortgage
- 100% ownership (+ depreciation benefits)
- 3-6% over 2-10 years.
Rent To Own (operating lease)
How It Works
- Business leases solar system for fixed term.
- Repayments are deductible
- The system appears as ‘asset’ on balance sheet, according to current tax legislation.
- Option for business to buy system at end of lease.
- 3-6% over 2-10 years.
Solar Power Agreement (PPA)
How It Works
- Business pays for solar energy generated by the system at lower rate than normal electricity retailer rate.
- PPA provider responsible for system maintenance during term.
- Asset does not appear on balance sheet.
- 8c/kWh-15c/kWh over 7-30 years.
Extra Costs You Need To Consider
There are potential extra costs related to installing a commercial solar system.
Many solar inverters and micro-inverters used in solar power systems automatically shut off when a power outage occurs. But for solar inverters rated with a capacity of 30kW or more, an independent network protection unit may be needed.
Some states require installing a separate protection unit by law. Your local grid operator can provide an assessment based on the exact size of your solar system.
Meeting the network protection requirements can add up to $5,000 to the total installation cost of a 25kW system.
Tilt Angle of Commercial Solar Panels
You can see many commercial solar installations that lay flat on the rooftop. But other solar panel installations are angled because the tilt helps optimise the capture of sunlight.
When is tilting a good idea?
Two factors determine if tilting is necessary:
- Orientation of the business premises
- Energy consumption profile of the business (when most electricity is consumed)
Distance Between Solar Inverter And Switchboard Panel
Ideally, the solar inverter is installed close to the switchboard. Doing so reduces the length of the cables between it and the switchboard.
A short cable run is best for two reasons:
- Less cable = lower cost
- Avoids voltage drop in cables over longer distances.
But, sometimes, building layout and other factors do not allow optimal positioning of the solar inverter. So extra cabling is needed, and the extra cost must be taken into account.
When asking for solar quotes, make sure you ask the commercial solar installer where they plan to install the inverter unit on site. And make sure any extra cabling costs are included in the final price.
What Can You Expect From Trione?
You can expect a site inspection and comprehensive written quote that explains all the details of the proposed commercial solar system for your business.
A 25kW commercial solar quote normally includes:
- Financial analysis of all system costs
- Calculation of ROI and payback period
- Projection of annual savings
- Estimate of STC rebate value
- Breakdown of overall solar system costs and any incidental expenses
- Detailed explanation of solar product warranties
- System output data (amount of energy per day, month, year)
We handle all permits, approval of necessary documentation to install and commission your commercial solar system.
Post-installation, we can provide system monitoring to track performance parameters. We also provide service and maintenance agreements to ensure the longevity of your commercial solar system.
You can have full control of the solar power production process. As a result, you will know how to optimise self-consumption for the best results and ROI.
There are some serious advantages to using solar power in your business.
Here are just some benefits:
Better control of your energy bills
Trione can help business owners control electricity costs better. Energy prices continue to rise every year, but we can help businesses in Australia to counter electricity tariff rate rises.
Improved liquidity and cash flow
Would you love to invest in critical aspects of your business to grow it? By saving on costly energy bills, you can spend more money improving your business.
Solar power is a viable alternative sustainable energy source to traditional fossil fuels. It is clean, economical, renewable, and environmentally low-impact.
With attractive federal and state solar STC incentives still available, there has never been a better time to switch to renewable solar electricity.
It allows you to grow your business faster and easier.
Your business will gain from using solar power because you can:
- Save money on expensive energy bills
- Lower overhead costs
- Improve cash flow
- Use free solar power and avoid expensive electricity tariff rate rises
- Optimise net metering and business solar feed-in tariff rate
- Use renewable and clean energy
- Improve the environmental profile of your business
- Boost the energy-efficiency of your business premises
- Take advantage of the government solar incentive and rebate (STC) scheme
Is Commercial Solar Good For All Businesses?
Does your business consume more energy during the day? Is your business operating in the manufacturing, retail, or education sectors? Or perhaps you are a wholesale supplier or operate a warehousing and distribution business?
These are the types of business that can get the most from a commercial solar power installation.
Does A Commercial Solar System Include Battery Storage?
Not necessarily. Like commercial solar energy installations, the costs associated with solar battery storage have come down dramatically in recent years. But not every business can fully optimise battery storage.
Is saving on operational costs your priority? Then, consider alternatives such as using an electric heat pump. A heat pump can store energy and provide cheap hot water. If your business depends on air conditioning, you can adjust the operating temperature by one or two degrees to see significant savings.
Does your business use generators to provide electricity for your premises? Then installing a 25kW hybrid solar photovoltaic system plus battery storage could be a good solution.
Contact us today to discuss how your business can gain from using solar electricity
Our team is experienced in 25kW solar power systems