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A guide for business owners: commercial solar
How does the ball start rolling?
So, as a business owner, you have heard about commercial solar systems and the financial advantages that they offer, but are still not sure of the whole process.
What might the process look like for you? If there hasn’t already been some tyre-kicking related to solar and your business, this is generally how it would begin (note - step 1 is already complete):
- You have a good idea of (and don’t love) what your electricity expenditure is!
- You contact— or are contacted by— a renewable energy company
- The renewable energy company asks to see your electricity bills for a least a year
- You’ll provide the energy bill, and the renewable energy company will commit to providing a cost estimate
A financial proposition
If you decide to look further into a commercial solar system, you will ultimately expect to be offered a financial proposal by the renewable energy company. As the owner of a business you are looking at solar, in all likelihood, from primarily a financial standpoint. As such, you will have other factors to weigh while coming to any decision...
Is this the best use of capital currently? Should you hire additional staff? Invest in more machinery? Increase ad spend and/or marketing?
…Exploring options to reduce your ever increasing electricity bills is one of the many avenues to improving the sustainability of your business.
Starting to paint a picture...
After looking at your average daily consumption (from the energy bill) along with the roof area/profile, a basic system design can be created by the renewable energy company, allowing for a preliminary cost estimate. This is a good opportunity for you to reconvene and reflect before deciding to progress with next steps, where more detailed analysis and site inspections take place.
If the picture captivates...
If the preliminary cost estimate aligns to budgets, then the renewable energy company will progress to detailed system design. For this, they will need the site’s interval data (shows site loads across short time increments) which is kept by your retailer, and is available with your permission and signature, via an “Authority to Act” document.
This allows the renewable energy company to make a direct request to the retailer on your behalf to obtain all interval data and is key to providing a detailed system design.
What a good designer should do
The commercial solar system designer looks to put together a solar system proposal that will address your relevant criteria, ultimately working with you to establish feasibility by following these steps:
- Find out the average daily load (power consumption) of your site
- Obtain your interval data
- Establish the physical nature of your site: size of roof; shading constraints etc. A site visit will be needed
- Minimize, or take into account, excess solar production going out to the grid
- Design a system that maximizes the ability to address your site loads directly
- Ensure the resulting proposal is easy to understand, with the added bonus of a Power Production Guarantee.
Constraints on the design
Remember that there are several constraints such as the size of the roof or the amount of available land for a ground mount system, how much electricity is being consumed, how much it costs and when it is being consumed. A designer will need to gain a good understanding of the site location to account for any constraints prior to finalising a system design.
Understanding your site
For a detailed proposal, a site visit will need to be carried out, allowing for collection of additional specific site details such as: the location of the main switchboard; existing cable types, lengths, locations; site access and logistics. This information will be used in conjunction with site interval data to enable the designer to round out your design proposal.
Minimising the grid, Maximising the sun
When the solar is producing it directly addresses your site loads. If the loads exceed the ability of the solar at that point in time to supply enough energy, the grid helps out. If the solar is producing more than the site is consuming the excess goes back out to the grid and this excess has a certain value attached to it, usually a lot less than the cost to draw energy from the grid. The designer will consider the best way to balance these factors when sizing up your solar system.
Establishing your ideal solar system output
Now, let’s get into a bit of nitty gritty! A 100 kW system means the total amount of solar panels on your roof amounts to 100,000 watts or 100 kW, made up of individual panels, commonly around the 350 - 400 watt mark. This 100 kW figure does not mean that the system will continuously produce 100 kW. The reality is that the system, if North facing in the Southern Hemisphere, will produce a peak of 100 kW for short periods of time.
It is not only how much energy (in kWh) will be produced, but also when. Remember the designer’s aim is to address the loads on site to minimise electrical draw from the grid, and maximise draw from the sun, thereby saving you the most money.
In the example above, the system is orientated towards ‘true North’, so peak production is at 12.00 pm, effectively a Bell curve.
The Proposal
Next step is the proposal. The proposal shows the system components, panels, inverters, Secondary Protection, panel framing etc and also shows the financial modelling (i.e. payback period), finance options, scope of works and a system performance guarantee. You may also expect to have a maintenance plan/program provided, some of which will be provided as part of the system cost - but remember this system is going to last you at least 25 years - you will want to consider ongoing maintenance beyond the initial couple of years.
If all is good, you accept the proposal, a deposit is asked for and received and, if finance is involved, those parties will now be engaged.
Getting approval to connect to the grid
Now that the renewable energy company has your approval to install a system, they’ll first make an application to your electricity distributor as the proposed system is going to be connected to their grid, so the distributor has to do their due diligence.
If the system abides by all the applicable standards the distributor has to accept it, though in some cases limits may be applied on your system exporting back to the grid.
The grid application involves submitting a large range of documentation which includes: CAD drawings of the site and the panels, voltage rise calculations. A whole host of information concerning the site and system specifics.
So long as all the information provided by the renewable energy company aligns with the requirements of the distributor, the application will be approved — however this can take several weeks and in some cases several months to be finalised. Most people do not understand the considerable time that can be involved in this part of the process.
Works commencement
After grid approval is obtained, the process of organising the installation starts and a project management timeline will kick off. Your input is critical to managing the timeline so you can expect to be asked multiple questions to ensure a clear, agreeable timeline is implemented.
The installer should seek to minimise the disruption to your business for the duration of installation works, which could be taking place for anything from a few days up to a few months for very large commercial solar systems. How and when the electrical shutdown event takes place, and consideration of timing of noisy works are often key considerations for business owners however there may be a range of other considerations specific to your business.
The installer will arrange procurement of all necessary materials and their delivery dates locked in with contingency plans. They will also orchestrate their installation team (preferably these people will be employed by the renewable energy company, but this is not always the case), and establish any specific site-induction requirements. Designers will supply their ‘for-construction’ drawings and various other site establishment / mobilisation arrangements will be deployed such as temporary site safety equipment and controls.
Completing the installation
From here, the exact process can vary quite substantially given the huge range of sizes of commercial solar systems that get installed. Some key steps that you should look out for include:
- Milestone/progress reports are provided as and where agreed between you and the renewable energy company,
- Works are completed per the agreed timelines,
- Your system is commissioned (in line with both industry body guidelines, and Energy Safe Victoria requirements - with a licenced inspector certifying your system),
- The installer will provide a ‘handover package’ including all system specifics, and train you on system operation per regulations and industry standards,
- Final payment is made upon practical completion.
- System maintenance schedule is then followed (should be at least annually) along the lines of your agreed terms with the renewable energy company.
Conclusion
The decision for your business to go the solar road must be built on a careful assessment of the financial viability of such an endeavour. Select a company with a good reputation and the ability to listen. You have to be aware of the timeline involved from initial grid application process all the way through to the conclusion of the process. Remember a commercial solar system will negate energy from the grid and will save you money and allow, by default, investment in other areas of your business. Exercise due diligence, be prudent in your cost benefit analysis of the options before you and make the best decision for you and your business.
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