Solar Powering Your Business

Did you know that a good quality 10kW solar system can be on your business’ roof for around $13,000- $15000 ?

Five years ago a similar system would have cost around $50k.

Solar panel prices in Australia are dropping more gradually than in previous years which means that now is a great time to purchase a system. Many business owners that I’ve spoken to don’t seem to realise how easily they can drastically reduce their electricity bills. Payback periods for commercial solar can vary considerably depending on the local electricity tariff and the ability for a business to self-consume the electricity that it generates but in most cases, it’s very compelling.

Businesses that face electricity tariffs of over 30c/kWh may be able to have their investment returned in as little as three years although five years is a more realistic expectation – but that should still make your accountant happy.

Due to the fact that electricity prices keep rising, the IRR for a solar investment can be anywhere between 10% and 35%.

If cash-flow is tight in your business (and honestly, whose isn’t?), many solar companies are now offering five-year finance terms that can make hire-purchasing a solar power system a cash-flow positive experience from day one.

By this point, you’re probably wondering where I’m pulling these crazy-sounding figures from. In actual fact, they’re from a pretty reliable (and usually conservative) source: Information is provided by SunWiz for Green Energy Market’s advice to the government’s Clean Energy Regulator .The ROI naturally increases as electricity prices rise, and it’s already ahead of schedule due to the faster-than-expected reductions in the price of solar systems over the last few years.

As you can imagine, solar system profitability varies state-by-state due to the different electricity tariffs in each state. Profitability is also based on a reasonably-performing solar system operating for 25 years and assumes a 5% annual increase in electricity prices – higher performing systems and further electricity price hikes only increase the financial incomes even more.

So, why haven’t more businesses bought a solar power system?

Typically it is because they don’t own their business premises, which can make it difficult. Although if you can get a payback of 5 years and have a progressive landlord, solar on a rented property can make a lot of sense for the tenant and the landlord.

Honestly, though? I suspect it’s primarily due to a lack of understanding about the opportunity presented by solar – which is what I’m hoping to address by writing this !

Many businesses are too busy with the day-to-day operations involved with running a business to actually ring around to get quotes for solar So just make 1 call to me at Skyline Solar and ill take care of the rest.

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