Solar for your business
‘101’: a beginner’s guide

The bottom line: If your business can afford to pay its power bills, it can afford commercial solar. Unlike households, which tend to use more energy before 9am and after 5pm, most businesses operate (therefore use much of their electricity) between 9 – 5. This makes commercial enterprises an ideal fit for solar. However, commercial-sized solar systems (10kW and up) carry some unique design challenges and considerations.

1) The three distinct size breaks for commercial solar systems

Less than 30 kW (Up to about 100 panels) These systems use the same hardware and fall under the same grid connection rules as residential systems – meaning that installers who do residential-sized installations can usually handle these installs without needing any ‘specialist’ commercial solar power knowledge.

30-100 kW Solar arrays of this size require special systems to protect the grid from all the electricity they can generate and need special permission from your local electricity network (DNSP) to connect to the grid. A commercial solar specialist is recommended for systems this size (and larger). Systems in this size range are typically installed in medium-sized offices, local clubs, and small retail businesses.

Over 100 kW If you go over 100 kW, you are no longer eligible to claim the STC “rebate”. But don’t panic! You still get a subsidy known as ‘LGCs’. This is paid every year and is based on how much energy the system actually generates. This adds some complexity and paperwork, as you must install a special meter and report your generation every year to claim your ‘rebate’.

Over 250kW These systems are very large, and a specialist installer who understands the specific engineering requirements is recommended.

2) Issues with connecting larger systems to the grid

When installing systems 30 kW and up, it is very important to see, in writing, the network’s approval for the system. Every solar power system connected to the grid must be approved. For larger commercial-size systems, most (if not all) approvals come back with conditions. For this reason – obtain a formal copy of the approval and seek an opinion from an independent consultant, if possible. Investing in a large solar panel array involves a lot of capital, and you want to avoid any nasty surprises.

3) Typical costs and paybacks

Good quality commercial solar will, as a ballpark figure, cost around $1,000 – $1,300 per kW installed. Using microinverters or power optimisers will add around 15-20% to the overall final cost, compared to using a string (or central) inverter system.

It’s important to verify your contract duration with your energy retailer.

Confirm what charges on the bill will be reduced when solar panels are installed, and by how much. Finally, verify what the companies quoting you claim in relation to the above points. Do your own research!

4) Monitoring and maintenance

Do not buy a commercial solar system that does not monitor both solar energy generation and electricity consumption. Any good monitoring solution will provide you with the ability to check your gross consumption meaning you will be able to view, for any particular hour, the ‘before and after’ of solar’s contribution to your business.

A maintenance schedule is important to adopt. Panel cleaning should be undertaken on a case-by-case basis when dirt and other materials start to affect the performance of the system.

5) The “commercial solar rebate”, aka STC’s versus LGC’s

Solar systems 99 kW in size and under are eligible for a financial incentive known as the “STC program”. This ‘rebate’ is almost always applied as a point-of-sale discount to a solar quote.

However, once your system is 100 kW and over, you’re no longer eligible to claim STC’s (Small-scale Technology Certificates) and must instead claim LGC’s (Large-scale Generation Certificates). The key difference is that while the STC ‘rebate’ is paid in advance and essentially works as an upfront discount on the cost of a system, the LGC ‘rebate’ is something that must be accurately tracked, reported, and claimed each year.

6) Why commercial solar doesn’t always need a roof

Weight is one of the biggest factors when it comes to installing a commercial-sized solar array on a roof. It’s vitally important that a structural engineering certificate is produced, and an engineer has physically inspected the site.

Flat panel arrays are generally more common and cost-effective compared to tilt-frame installations. Ground mount systems are an option if a roof is unsuitable for solar, but they represent a niche type of commercial installation and require a lot more planning (and cost!)

7) Financing a commercial solar power system

The government has supplied financial schemes to support businesses, as well as numerous commercial solar financing options for small to medium businesses to adopt renewable energy sources. Funding options available; Solar loans – Financing Option of Solar for Business, Energy Efficient Upgrades- Financing Options, Government incentives, Power Purchase Agreements (PPAs), and Lease Financing.

8) What to expect from your initial installer visit/consultation

Any commercial solar installer worth their salt will conduct an energy profile analysis on your property. The main things they will look for are;

Billing structure, Charges that cannot be avoided. Ancillary charges, AEMO charges, service availability charges, etc., The energy consumption during daylight hours – especially in winter, arranging of site visit/inspection, Understanding your needs and goals, and Analysis of power bills and interval data (to be able to accurately project paybacks).

9) Importance of IRR & discount cashflow analysis in the quote

IRR (internal rate of return) is a better metric than ROI because the capital invested in a solar power system is essentially gone after its 25-year lifetime. Good commercial solar installers should present a pretty thorough cash flow model as part of their quote. As this is coming from a salesperson, it’s a good idea to get your accountant to check over it.

11) Inverters in a commercial-sized solar power system.

Broadly speaking, there are three options when it comes to choosing a solar inverter setup for a commercial-scale job. 1. Microinverters or optimisers, 2. Chained string inverters, 3. Large central inverters.

Cost is key in a commercial system. Microinverters and optimisers generally carry a 20% premium in price over conventional string inverters but offer a variety of safety and performance benefits.

12) Commercial solar contracts, and when Australian Consumer Law applies to commercial solar.

Australian consumer law gives consumers an arsenal of legal protection and recourse against shonky solar installations. However, it only applies to goods and services that are worth less than $40,000. Meaning that it’s extremely important that you understand the contract you’re signing, and that both parties are clear on their responsibilities. If in doubt get a lawyer to look over any contracts before you sign them.

13) Batteries – are they worth it?

Unless your business has some kind of critical need for energy storage and backup power, it’s better to save your money (or funnel it into an even larger solar array) than to buy battery storage.