The Economics of Solar Farms in Queensland

A growing number of residents of rural Queensland residents are considering adding commercial-scale solar power farming to their portfolio of revenue streams. The primary benefit that solar farms afford their owners is an income source or money-saving facility that does not require continuing annual inputs, as other farming activities may.

The advantages of a commercial-scale solar farm in Queensland

The primary driver for taking up solar farming anywhere in Australia is to save money related to electricity–whether the system owner/operator is using the system to reduce power bills, or fortunate enough to have arranged a power purchase agreement (PPA) with a local electricity retailer. The details as to why solar farming–and solar PV in general–is an attractive investment in Queensland are outlined in the points below.

Federal government Solar Credits rebate scheme

In order to capture the environmental benefits of solar power–in particular its greenhouse gas abatement potential–the Australian Federal government has introduced a number of incentive mechanisms that make installing a solar PV system financially attractive for ordinary homes. Most notable and most directly influential with regard to solar power and other forms of renewable energy is the Enhanced Renewable Energy Target (eRET). The eRET, in its present form, calls for 20% of Australia’s electricity generation to come from renewable sources by the year 2020, and lays out the framework by which progress towards this goal is to be monitored and accomplished.

For those interested in solar photovoltaics (solar PV) and solar farms, of particular interest is the eRET’s Solar Credits scheme. This provides what equates to an up-front discount (in the form of STCs/RECs) on solar PV installations and solar farms anywhere in Australia, including Queensland. The amount by which a solar farm’s outlay will be reduced through the eRET and the Solar Credits scheme will depend on the solar farm’s size and location–regions that receive more sunlight will be allotted a greater number of STCs.

Attractive return on investment (ROI)

In Queensland, the current Solar Feed-in Tariff rate of 44c under the state’s Solar Bonus Scheme only applies to systems of 5 kilowatts (kW) in capacity or smaller. Although it will not apply to systems large enough to be classed as ‘commercial-scale solar power’ or ‘solar farms’, a solar farm can still deliver savings on electricity bills by reducing the need to purchase power from the electrical grid. Retail electricity rates are set to rise by up to 37% nationally by 2014, and although the Queensland government has made clear its intention to temporarily halt this trend in the state, a solar farm would still be a smart investment for premises that consume the bulk of their electricity during daylight hours–namely, the majority of all businesses.

Solar farm owners may also be able to work out power purchase agreements (PPAs) with their electricity retailer and get paid a rate for each kilowatt-hour of solar power that they export to the grid. This is the minority of cases in Queensland to date, however, and if such an agreement were reached it is likely that none of the solar power may be earmarked for self-consumption by the system owner–it will all need to be exported to the grid. So securing a PPA, although key for commercial  solar power project developers, is not necessarily always the best option for small- to medium-sized businesses, who may benefit more from self-consumption.

Decreasing cost of solar PV = Lower overheads

The cost of installing a solar PV system has fallen dramatically–as much as 70% in the past couple of years by some estimates–and is expected to continue on this trajectory for the foreseeable future. A report by the reputable consultancy firm McKinsley estimates that unsubsidised solar power will be cost-competitive with coal and nuclear power by the year 2020. In the meantime, the purpose of subsidies is to levelise the cost, making it affordable to the average customer.

Low maintenance investment

Solar systems–unless they are perched on solar trackers–generally have no moving parts and require very little in the way of maintenance or inputs once they are installed and functioning.

Tax benefits for businesses with solar farms

ABN holders may be able to claim depreciation and GST credit on system production.

What is the typical commercial solar farm size in Queensland?

As mentioned above, Queensland does not currently have a state government-sponsored Solar Feed-in Tariff for systems over 5kW. Unless a PPA is in place, the solar farm size best suited to your needs will therefore depend on your daytime electricity demand and agreements made with the local electricity retailer.  Since any solar electricity exported to the grid will only earn the system operator/owner a few cents per kilowatt-hour (and only if an agreement is made with the retailer), it is imperative to select a system size whose production will not exceed electricity demand. Depending on the home or business, the best system size may be as small as 5 or 10 kilowatts (kW), or upwards of 50kW, 100kW, or larger.

…and how much power will my solar farm produce?

Each solar power system has its own nameplate capacity. Real solar system output relative to this figure will ultimately depend on the quality of the components (are they functioning to specification?), the weather, and shading. Most postcodes in Queensland fall into REC Zone 3 (read about REC Zones), but there are also a number in sunnier REC Zone 2. Depending on the location, system owners can expect between about 3.8 and 4.2 hours of “peak sunlight” daily, averaged across the year. In such conditions, a 30kW solar system would produce between 114 and 136 kilowatt-hours (kWh) on an average sunny day. Assuming an electricity rate of 20c, self-consumption of all this power would result in a power bill savings of $21 and $24 per day. With electricity rates set to rise significantly in the mid to long-term future, solar PV will become an increasingly attractive way to insulate against soaring power bills.

Commercial-scale solar power and solar farm tender management & financing

Solar Choice Commercial has been managing tenders for large-scale solar projects since 2009, and is well-positioned to find the best-value solar system deals for customers throughout Queensland, as well as the rest of Australia. Additionally, for larger systems, a unique financing package for commercial solar power is available exclusively through Solar Choice. Benefits include: No capital expenditure and instant parity with commercial electricity tariffs. Contact Solar Choice to learn more.

© 2012 Solar Choice Pty Ltd

James Martin II


  1. I want to start the project on my farm, activities that need power is bohole, home lightings, chicken run, 4 to 8 extra rooms. How much kW of solar system do I need ,what is the best brand and what installation ground or roof gives the best results.

    1. Hi Bafana,

      Thanks for your enquiry. At present, our services are limited to Australia. To give you a ballpark figure, you probably need between 15-25kW of solar panels and about 45-60kWh of usable battery capacity. I assume you’re not going to have a grid connection?

Comments are closed.