Commercial Solar Power Systems are the next big thing
Solar power has received widespread support in the residential sector in South Australia and there are now over 120,000 homes across Adelaide and the rest of South Australia with solar on their roof.
The residential solar boom was orginially driven by strong government incentives providing both up front rebates and premium feed in Tariff’s. However, in more recent times the success of solar power systems has had less and less to do with incentives and more and more to do with the spiralling costs of ordinary electricity.
With electricity prices in South Australia around 39 cents per kilowatt hour for residential consumers, (which by the way is a bloody disgrace and gives us the most expensive power in Australia) and retail solar prices falling to as low as $1.00 per watt, it is now a financial no brainer for a South Australian residence to install solar power.
However, what about businesses ?
It used to be (back in the good old days of 2010 when power only cost 20 cents per kWh and there was a 50 cent solar feed in tariff) that solar power only gave good returns if you used little power and fed most of it into the grid, However, with Feed in tariffs now reduced and electricity prices almost doubled those that benefit most from installing a solar power system are those that use the most power during the day without needing to feed much back into the grid.
In short businesses !!
Andy’s Prediction- 2014-2017 will see a commercial solar boom in Australia that will be larger than the residential boom we have seen from 2010 to 2012.
Here is why…
If we take a South Australian small business that is paying 36 cents per kwh for power as an example.
They can buy a commercial solar power system for about $1,000.00 per kilowatt if they pay cash and they will get 1500 kWh per year per kilowatt of solar they install. At 36 cents per kilowatt hour (wheres a calculator when you need one) that equates to a saving of $540 per year per kilowatt purchased. This gives a return on investment of 54%, a return that will increase each year as power prices increase in the future (I have assumed the business will consume 100% of the power generated).
(Little wonder we have been busy lately putting solar panel systems on the roof of a few independent supermarkets.)
However, now that we have dealt with the economics it is worth discussing some of the practical issues relating to commercial solar power solutions.
The first thing that makes commercial solar power systems different from residential solar power systems is that larger solar power systems produce more amperage than residential systems and so it is not a foregone conclusion that a particular business will be able to easily connect the size of solar power system they want to the grid.
With residential systems, and commercial solar power systems less than 10 kw per phase connection to the grid was simply a rubber stamp obtained by lodging paperwork with the utility provider and the electricity retailer.
However, with larger systems getting approval to connect the size of system required to the grid can be a process that involves detailed discussion with the utility network company and may involve the need for advice and plans to be prepared by electrical engineers. It may also be necessary to upgrade the infrastructure of the businesses electricity connection and in some cases these costs can be significant.
Also, as a commercial customer, wishing to connect a larger system to the grid, the amount you will be paid by your retailer for any excess power that is not used within the site, and is exported to the grid, is a matter for negotiation between you and your retailer rather than a matter of statutory right.
I don’t think the majority of the retail solar power industry has really got its head around a new process of engagement with commercial customers that takes into account the added complexities of a commercial project.
We would be happy to discuss any ideas you have for a commercial solar power project with you.