100kW solar systems are among the most popular commercial solar system sizes in Australia, as this size is the cutoff point for up-front incentives through the federal government (larger systems also receive a benefit, but it is ongoing). This article provides an overview of most of the key points that businesses need to know if they are considering a 100kW solar system for their commercial premises.
100kW Solar System Costs
The cost of installing a solar system has fallen significantly in recent years thanks to a number of factors, including Australian government incentives for renewable energy, growing competition between solar panel installers and component manufacturers, and global manufacturing trends. Coupled with rising commercial electricity prices, solar systems in the 100kW range offer a compelling money-saving and investment option for a wide array of business types. Accordingly, uptake of commercial solar power has increased significantly in Australia in the last several years – with 2018 looking set to be the country’s best year yet.
The table below – from our Febuary 2018 Commercial Solar PV Price Index – shows average price trends for 100kW solar systems since Solar Choice started keeping track in May 2014. (The Index also incorporates pricing for 10kW, 30kW, 50kW and 70kW systems). Currently, the average price for a 100kW system across Australia is about $1.10/W, or $110,000 for a fully installed system.
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Energy yields for 100kW solar systems
There are many factors that influence the output of solar PV systems. These include the orientation and tilt angle of the solar panels, the presence or absence of shading, average system operating temperature, and the quality of the system’s components. All of these factors are taken into consideration when a system is designed in order to arrive at a reasonable estimate as to what that system’s power output will be once it is operational.
The theoretical upper limit for the amount of power a flat-panel 100kW solar system (or any flat-panel system) can produce is determined first by the amount of incident sunlight on the area where it is located throughout the course of a day, month, season, or year. It goes without saying that different regions of the country receive different amounts of solar irradiation. As a very rough guide, a system in Australia will produce 4 kilowatt-hours (kWh) per kW of installed capacity per day, averaged throughout the year. This figure will of course be higher in sunnier locations and lower in less sunny spots (Brisbane sees more sunlight than Hobart, for example) and the season (power generation is higher in the summer thanks to the longer days).
As an example: A standard 100kw solar system in Sydney, NSW would produce about (3kWh x 100kw =) 300kwh on a winter’s day, while in the peak of summer the same 100kw solar PV system would produce around (5kWh x 100kw =) 500kwh. A similar system in Brisbane might produce as much as 350kWh in winter and 550kWh on a day in summer. (Figures are approximate only.)
100kW solar array for the National Golf Club in Mornington Peninsula, Victoria. (Read more about this project. Project tender managed by Solar Choice Commercial.)
100kW solar array for Brisbane Powerhouse in Brisbane, QLD. (Read more about this project. Project tender managed by Solar Choice Commercial.)
Financial returns for 100kW solar systems
According to our own data (from nearly 300 business cases compiled in 2017), payback periods for appropriately sized commercial-scale solar systems in Australia are around 4 years on average, with internal rates of return (IRR) easily hitting 20-30% in every state & territory in the country.
That being said, the investment case for installing a 100kW solar system depends on the circumstances. The primary factors that influence solar system ROI are: 1) the up-front and ongoing costs associated with the system, 2) the cost of mains electricity, 3) methods of payment/financing for the system, and 4) the amount paid, if any, for surplus power fed into the grid or sold to a third party. These are discussed below.
1) Total cost of the system
The long-term investment-worthiness of a 100kW solar system will depend in part on the total cost of the system. System prices can vary significantly, and customers need to learn to discriminate between ‘cheap’ and ‘good value’ systems. It goes without saying that it is absolutely key to shop around and compare not only prices and the components that could be used, but also the expertise and experience of the installers who are being considered to design and install it.
Solar Choice manages solar project tenders for a range of commercial clients.
2) Electricity prices
Australia’s electricity prices have risen dramatically in the past few years, putting them among the most expensive in the world. Installing a solar PV system allows businesses to circumvent power utilities to a certain degree, generating a portion of their own power instead of purchasing it from the grid. In this way, going solar can save a business a significant amount of money on power bills.
Solar Choice has a team devoted to working out how solar PV can benefit our commercial clients.
3) System financing
Financing can be vital in ensuring that going solar works for a business, keeping capital outflows manageable while also reaping the benefits of energy bill savings. Solar Choice’s commercial clients have access not only to system pricing details form various installers via the comparisons available on our Tender Management Platform, but also insight into the finance terms offered from each of those companies.
4) Solar feed-in tariffs (and possibly power purchase agreements)
Generally speaking, commercial-scale solar systems are installed to offset power bills. However, in certain cases, it may be possible to take advantage of a feed-in tariff incentive scheme or to negotiate a power purchase agreement (PPA) with a third party. Get in touch with us to learn about whether either of these may apply to your situation.
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Since 2008 Solar Choice has consulted with over 3,000 businesses around Australia and helped develop over 800MW solar commercial and solar farm projects.
© 2019 Solar Choice Pty Ltd
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