A commercial solar power ROI analysis should be done before investing in solar power. Solar power is not for anyone, and most businesses will not consider anything with an ROI of greater than 5 years or so.
What Is The Return On Investment (ROI) For A Commercial Solar Power System In Brisbane?
The simple way to work out your commercial solar power ROI is: Total Investment/Yearly Savings. So Total Investment is easy to find because it’s what you paid for the solar power system.
Yearly savings is a little more difficult to predict due to seasonal and consumption profile variations.
The basic way to work out solar power savings in Brisbane is: (System Size) x 4.2 hours x (kWh cost) x 365 days.
E.g. a customer who pays $0.26 per kWh for electricity and installs a 99kW commercial solar power system will save: 99 x 4.2 x $0.26 x 365 = $39,459 per year.
Let’s say this customer paid $170,000 for the solar power system including full installation. Their ROI would be: $170,000/$39,459 = 4.3 years.
As mentioned above, this is the SIMPLE way to work out commercial solar power ROI. Other things that affect ROI are:
- Is all of the power consumed or is some sent back to the grid?
- Is there a Feed In Tariff for power sent to the grid?
- Is there an off-peak rate on weekends?
- Are electricity prices trending upwards?
- Are there any associated kVA or kW demand savings made with the solar power?
- Are there any depreciation tax benefits associated with the solar power system?
- Is the solar power system going to have any “down-time”?
7 Tips For Getting A Better Commercial Solar Power ROI
There are a few ways that you can maximise your commercial solar power ROI before making a firm decision to get a system installed:
- Get your system correctly sized – oversizing a solar power system can lead to losses which means you will not get the savings you anticipated.
- Know how much you’re paying per kWh – some bills can be a nightmare to decipher. Get some expert advice on how much you pay per kWh so that you can be sure of how much you’re likely to save with the solar.
- Check if you’re being charged a lower off-peak rate on the weekend – this will lower your savings a little.
- Ask your retail electricity provider for a better Feed In Tariff deal for any excess power you generate – many retailers will still at least give you an offset if not a feed-in-tariff for excess solar power you produce.
- Get a good price for your solar power system – obviously the less you pay up front, the better your commercial solar power ROI is going to be. Use the BSPQ commercial quoting form to get a competitive solar quote so you know you’re getting the best price.
- Know the “worst case savings” you could expect – we know electricity prices in QLD are unlikely to fall and will most likely go up, but if you base your commercial solar power ROI analysis on 0% per annum electricity price increases, then you will likely save more than you expect.
- Anticipate some downtime – a quality solar power system will not normally have any failures or performance issues but if you expect that for 2 weeks of the year, your system will be down for maintenance then you will be certain you are under-promising and will over-deliver in terms of your solar power system savings.
Use the tips above to get your commercial solar power ROI up. A payback period of 3 years or less should be possible.