20kW Commercial solar systems: Pricing, output, and returns

A 20kW solar power system is potentially a worthwhile investment for small to medium businesses across Australia, thanks to the falling price of solar PV, and rising electricity prices. This article looks at the price ranges, power yields (in kWh), and financial returns that a business may expect from a 20kW solar PV system.

20kW solar PV systems: Pricing

The cost of solar PV (photovoltaics) technology has fallen significantly in recent years, thanks in great part to government incentive schemes and a massive increase in solar panel manufacturing in China. Increased competition amongst manufacturers as well as system installers has managed to pull down the market price of solar PV systems by around 45% per year. Some even think that solar power could change the way we think about energy, both here in Australia and internationally.

In Australia, the retail price of a standard solar PV system installation of reasonable quality is just above $2 per watt, after federal government solar rebates are accounted for. This means that at the time of writing, the cost of such a 20kW solar system hovers at around $42,000–nearly 1/4 of what it would have been in 2008.

The price of a 20kW solar PV installation varies widely, however. A 30kW solar PV system using components of lesser quality will cost less, while high-end systems will be dearer.

20kW solar system power output

Variables that affect the actual power output of a 20kW solar power system include:

-Geographical location of the system and the expected daily and annual solar irradiation and cloud cover levels there

Orientation and tilt angle of the solar panel array

Whether there is any shade cast on the panels

-Actual operating temperature of the panels

-Whether solar panel array capacity is accurately matched to inverter capacity

-The performance of the individual components–i.e. the panels and the inverter

As mentioned above, different areas of Australia receive different levels of sunlight. The amount of sunshine falling on a solar panel array will directly affect the output of the system. A 20kW solar system in Australia can expect to receive around an annual average of 4 hours of ‘peak sun’ (peak sun hours, or PSH) per day if it is properly orientated. Keep in mind, however, that Tasmania (for instance) receives less sunshine, while Broome, WA receives some of the most sun in the continent. Sitting int he middle are cities like Sydney, Perth, and Brisbane, which come in at just around the 4PSH mark. Also keep in mind that this is only the annual average per day; there is generally more sun in the summer and less in the winter.

As an example, a perfectly efficient 20kW solar system in Sydney would produce about (3PSH x 20kW =) 60kWh of power on a day in the middle of winter, whereas in the summer output from the same 20kW solar PV system would be around (5PSH x 20kW =) 100kWh. (Figures are approximate only.)

Financial returns for 20kW solar systems

As is the case with output, returns from a 20kW solar system will depend on a number of factors, including whether the system owner/operator can be paid for power exported to the grid and at what rate. The rate paid for such power is generally referred to as a Solar Feed-in Tariff, and in most of Australia’s state’s and territories Feed-in Tariffs do not apply to large, commercial-scale systems. Instead, most businesses who opt to go solar do so with the intention of offsetting their power bills by using electricity from their solar systems while the sun is shining as opposed to purchasing it from the electrical grid. This type of ‘self-consumption’ will usually yield returns on investment of well under 10 years and offer much better return on investment than a savings account with a standard interest rate.

Another factor that matters in how a 20kW solar PV system can save its owner/operator money is how the system is financed. There are numerous models for financing available. Solar Choice Commercial manages large-scale solar PV tenders for a range of clients and offers a unique commercial solar PV financing package that enables the right customers to set up a solar farm or other large-scale installation with no capital expenditure, among other benefits. Contact our commercial team to learn more.

Learn more about Solar Choice’s commercial activities.

© 2012 Solar Choice Pty Ltd

James Martin II