Commercial solar is targeted towards businesses who generally use the vast majority of their electricity between 9am and 5pm (operating hours).
These commercial sized systems (10kW) and up carry unique design considerations and challenges which we will go through within the blog.
The three distinct size breaks for commercial solar
(Baring in mind, the average residential solar system size is 5kW, or around 20 panels).
Less than 30kW (around 100 panels)
A 30kW solar system will usually generate around 120kWh of electricity a day on average over a year, this will save approximately $2000 per month if 100% is self consumed (which is definitely possible in commercial situations).
30kW to 100kW
Solar systems of this size are usually installed on medium sized offices, small retail businesses and local clubs.
Solar systems of this size require special systems to protect the grid from all the electricity they generate, whilst also requiring special permission from your local electricity network (DNSP) to connect the grid.
100kW – 250kW
These systems are typically installed on large offices, wineries, hotels and small to medium factories.
If your system exceeds 100kW, you are no longer eligible to claim the STC incentive. However, don’t stress you are still eligible for the subsidy known as ‘LGCs’. This is paid every year and is based on how much energy the system generates. This can become quite complex with the application process and paperwork as you have to install a special meter and report your generation every year to be eligible for your incentives. We will be more than happy to help you through this process.
250kW and over
These are very large systems and generally go on large shopping centres or solar farms. We recommend using a solar specialist, you can view our latest commercial solar systems here.
Connecting large solar systems to the grid
When we install systems from 30kW and up, it is incredibly important to get the network’s approval to the system. Every solar power system connected to the grid must be approved before installation commences.
For larger commercial systems, approvals usually come back with a set of conditions. For example, “This 55kW solar system has been approved, subject to the system having an export limiting device set to 10kW”.
Knowing this is very important, as it involves a substantial amount of cost and equipment to meet these conditions – and export limiting may affect the systems projected savings.
Some solar retailers won’t disclose this information, as they may not have factored it into their costings to begin with. We are happy to go through this with you so you understand it completely.
General solar costs and payback
As a ballpark figure, good quality commercial solar will cost around $1,000 to $1,300 per kW installed. Using power optimisers and micro inverters will add around 15-20% to the total cost, compared to using a string (or centralised) inverter system.
An important factor to note is some commercial premises have signed long term tariff contracts with their energy retailer. This affects future payback/savings from going solar. You need to find your terms that you agreed to and understand them. Ideally, this will help you know when your contract will expire and the projected increase in tariff charges.
This may seem like a difficult step, but at Westsun Solar we are more than happy to help you through this process and are always looking to educate our customers as much as we possibly can.
Monitoring and maintenance
We suggest that you do not buy a commercial solar system that does not monitor both solar energy generation and electricity consumption.
You will not have the information you need to keep your post-solar bills as low as possible without combined generation and consumption monitoring.
All good monitoring solutions 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 brand that we recommend is Solar Analytics.
A maintenance schedule is important to adopt. The requirements from the CEC state, an installer must provide a maintenance schedule to the customer. Westsun Solar will have a comprehensive tailored plan for you and your commercial system.
Additionally, panel cleaning should be undertaken on a case by case basis and not scheduled. We recommend Solar PV Repairs for this.
Commercial solar incentives – STC’s versus LGC’s
Solar systems that are 99kW in size and under are eligible for incentives known as the “STC Program”. To simplify, it means that you are paid based on the expected generation of a system over the next 13 years, to the tune of around $630 per kW of solar installed (this differs based on install location and market conditions).
This incentive is generally applied as a point of sale – for example, if you were quoted a 30kW system for $29,000 this would already have the -$19,000 STC incentive applied.
However, once your system is 100kW or more, you are no longer eligible to claim STC’s, and must instead claim LGC’s.
The major difference is that while the STC incentive is paid in advance and essentially works as an upfront discount off the solar system, the LGC incentive is something that must be accurately traced, reported and claimed every year.
To claim LGC’s, you first need to register to become an accredited power station with the Clean Energy Regulator. We will assist you with this process and ensure that your metering is up to the National Electricity Market standards, meaning you can properly track your generation.
Commercial solar layouts and design
The weight of the system is one of the biggest factors when it comes to installing a commercial-sized solar array on a roof.
It is incredibly important that the structural engineering certificate is produced and an engineer has physically inspected the site.
Westsun Solar will provide an in depth plan before installation commences.
Flat panel installations are usually more common than tilt-frame installations. They are cost effective (tilt frames have additional costs) and can be altered to suit last minute changes easily.
Ground mount systems are also an option if your roof is unsuitable for solar. These require a lot more planning and can be more expensive compared to a roof-mounted system.
Financing your commercial solar system
A common way to purchase a system but technically not finance.
The cash price for a solar system will always be the lowest (leading to the shortest possible payback time), as fees and charges involved with finance or leasing increase the overall cost of a system.
A potential downside, larger commercial solar systems represent a significant expenditure, which could potentially be used elsewhere in the business.
Power Purchasing Agreement (PPA)
PPA’s are a type of solar leasing arrangement.
The main idea is that a third party retailer installs a system on your property (meaning it legally owns it, and is obligated to maintain it), and enters an agreement with your business to sell you a set amount of electricity over a long term agreement.
The main benefits are that your electricity costs overall are lower, because the price for electricity under a PPA will be cheaper than what you are currently paying the retailer, and that there is no upfront cost for installing the system.
The downside of this is that you will be obligated to buy all of the electricity generated by the system, regardless of whether this energy is self-consumed by your business or sent to the grid for a feed in tariff.
As self-consumed solar energy is far more valuable than solar that is exported to the grid for a feed in tariff, if you are considering a PPA it is very important to have the system optimally sized for maximum self-consumption.
PPA’s set out the price of solar energy for the duration of the PPA. While a low price for year one is obviously a good start, it’s very important to read the fine print on how the prices will be adjusted over time.
The best PPA is one that, over its term, increases its prices at a lower rate, rather than the one with the lowest starting price and then inflates by 5% p.a.
A green/business loan will allow you to negotiate pricing with a solar installer as if you were a cash buyer. If the savings from a new commercial solar system are more than what you pay on interest for the loan – you can see why this would be a great option to avoid taking a big cashflow hit by using capex/cash to buy a solar system.
What to expect from Westsun Solar from your initial visit/consultation
Westsun Solar will conduct an energy profile analysis on your property.
The main things we will look for are:
- The billing structure and what kind of tariff you are on
- The charges that cannot be avoided. Ancillary charges, AEMO charges, service availability charges, etc.
- The energy consumption during daylight hours – especially in winter. This will allow them to determine what’s more important – roof space or what you, as the customer, actually need. For example, you may need a 100kW system, but only be able to fit 50kW on your roof – an energy profile analysis will be able to definitively tell you if it’s still worth it to go ahead.
- Arranging of site inspection/visit
- Analysis of power bills and interval data
- Understanding your needs and goals
Inverters in a commercial sized solar system
Generally, there are three options when it comes to choosing a solar inverter setup for a commercial scale job
- Chained string inverters
- Micro-inverters or optimisers
- Large central inverters
Cost is key in a commercial solar system, and micro-inverters and optimisers generally carry a 20% premium in price over conventional string inverters, but offer a variety of safety and performance benefits.
When installing your commercial solar system it can be hard to justify an additional $50k expense for micro-inverters compared to a string inverter system that will effectively almost produce the same power.
String or central inverters represent a more cost-effective option. However, most commercial installers lean towards chaining residential-sized inverters together instead of using one large central inverter.
This preference is for a variety of reasons:
- Not all roofs suit a huge single array, and multiple smaller inverters give design flexibility with different strings
- Access. It is much easier to move and install briefcase sized inverters compared to a central inverter that is the size of a small room – especially when heavy machinery is required to lift it into place
- Redundancy – one failure does not jeopardise the entire system
Ultimately, we will provide recommendations based on your unique situation, and help you decide whether you want a no frills system or an electrical engineering system on your roof.
At Westsun Solar we take pride in providing our customers with as much information as possible before starting their solar journey. Contact us today to find out more from Perth’s solar specialists.