This commercial solar guide is for New Zealand businesses considering an investment in solar power to reduce power bills, become more self-sufficient and to harness clean energy.
Every business that uses solar is making a smart investment for itself and the community at large.
The guide covers:
Godfrey Hirst, 577kW. Installation by Trilect Solar
As the price for solar panels and solar components fall, and as grid electricity prices rise, it makes a lot of sense for businesses all around New Zealand to install solar panels, on-site or on top of their roofs.
The number of households installing solar panels is increasing in New Zealand. It has become an economically viable choice for many. Moreover, businesses in New Zealand now realise the value it brings to them.
In comparison to residential homes, businesses that have solar panels can take full advantage of sunshine hours during a typical work day. This way, companies can enjoy the solar energy they create in real-time with no need for batteries.
In contrast, residential systems end up exporting a lot of solar energy to the grid and are paid small amounts for their contribution.
Businesses generally install larger systems, which means more significant economies of scale, making it cheaper for every kilowatt of solar installed.
The rate of return will depend on the financing option. In most cases, businesses gain healthy returns from investing in solar power. A well-designed solar power system can provide a return on investment between 10% and 20%.
The Huntly Coal Power Station - Still In Operation
Although roughly 80% of power generated in New Zealand comes from renewable resources, 20% still comes from mining coal and natural gas. Renewable resources like geothermal power aren’t as green as some proclaim, this is due to the extraction process in which carbon emissions are released.
Solar power is 100% renewable, with the only emissions coming from manufacturing and shipping processes.
Many businesses need to report on emissions or sustainability efforts. The great thing about solar power is that it is entirely measurable. The monitoring systems indicate exactly how much solar energy is used, and the carbon emissions that are avoided.
Throughout 2020/2021 there was a considerable increase in electricity prices for most businesses. Power prices doubled, and even tripled for some companies.
Installing solar power allows a business to rely on fixed power prices for the electricity generated for at least 25 years. Solar panels have a 25 to 30-year performance warranty. Other components like the inverters generally only need to be replaced once during the lifetime of solar panels.
Cheviot Park Motor Lodge - Whangarei - 30kW
Figuring out the best solar power system size will be critical in making the economics of a solar power system work.
Generating more solar power than energy usage will reduce the financial return.
Reviewing past electricity use can help determine the best system size by figuring out the amount of power consumed and at what time of the day, then how much solar energy can be generated in the time frame needed.
Determining the best system size can be challenging, so it’s best to contact a solar consultant or solar installation company to help in the process.
Fronius Monitoring Displays
Solar power systems need to be monitored to ensure the panels are producing the expected amount of electricity. If an undetected issue is left unchecked, it could result in considerable loss of power savings.
Shade, created by obstructions such as trees, leaves or dust, can hinder the performance of a system. A simple clean might be all that is needed to bring the panels back to peak power generation.
Monitoring can be done in-house from time to time to check in with the inverter's monitoring platform.
Alternatively, businesses can enter into a maintenance agreement with a solar company to monitor and maintain the solar power system when required. The solar company can also take care of maintenance. Generally, systems aren’t likely to fail and solar panels are built tough, but they will get dirty which will cause a system’s energy production to drop.
A ground-mounted solar power system is an excellent option should a roof be unsuitable for a solar power system. Although it's more expensive to build a ground mount array due to groundworks and the frames required. A solar power system on a roof uses the existing roof structure to bolt the solar panels onto.
Most businesses won’t require batteries as they will be using solar power generated in real-time, with no need for after-hours power.
There are exceptions for those businesses that need emergency backup power, are in a rural setting or a company that primarily operates their business after 5 pm.
Power Purchase Agreement (PPA)
A Power Purchase Agreement (PPA) denotes business capital isn’t required, which allows a company to receive the benefits without spending any money.
In a PPA, a solar power company owns the solar power system they install on the business's roof. The power company sells the power generated from the solar panels to the business at a fixed price that is cheaper than grid electricity retailers.
The solar company pays for all the equipment, completes the installation, and monitors and maintains the system. A PPA is an excellent solution as it offers a business power independence as it will not be subjected to fluctuating electricity prices.
The PPA business will send monthly invoices for solar power used, which generally is accounted as an ‘operational expense’ and is typically tax-deductible - another great benefit to any business.
A loan will allow the business to have more control over the system and potentially benefit from more costs savings in the future (if grid electricity prices continue to rise).
If the estimated return on investment for a solar power system is greater than the loan's interest, it makes sense to have one installed.
The solar power system will be accounted for as a ‘capital expense’ because the equipment is in the name of the customer/business. Therefore a company can claim depreciation.
See this example of how financing worked for Kaitaia College in Northland.
Installing a solar power system of a commercial size can be daunting. However, there are solar consultants out there that guide customers through the process, and ensure the solar power system is designed to meet the unique needs of the business.
Here are just some of the tasks a solar consultant can help with:
First, the consultant will conduct a preliminary feasibility study. This assesses technical and financial feasibility. They will find out:
The second stage is working through the details of the design of the solar power system. The consultant will design the system so that it can be taken out for tender and fixed.
These specialists are also knowledgeable on which companies offer the best quality and price. They can also check the finer details of the quotes provided to see if anything is missing.
Once a solar integration company has been appointed, the consultants may help with quality assurance throughout the installation process.
The cost of a solar consultant needs to be accounted for as it may impact the economics of the system. A smaller 100kW system is not a lot less work for the consultant than a one-megawatt system, as they will go through the same process. Therefore smaller system sizes might not make hiring a consultant viable.
Revolve Energy is an award-winning consultancy firm with decades of experience and has consulted for some of New Zealand's most iconic solar power projects, including:
Contact Revolve Energy to see if they can help get your commercial solar project going.
Businesses won’t need a consultant to get a quote. Solar power installation companies will provide all the information required to make a sound decision. Here is what they can provide before purchasing a system:
Join the hundreds of other New Zealand businesses benefiting from solar! If you would like to get started with three, free quotes from New Zealand's most trusted commercial solar installers, click here to go to My Solar Quotes commercial solar quotes form.
The solar-charged peanut roastery has installed 486 solar panels on the factory roof in Nelson. The solar panels will cover at least 20% of Pic's annual energy demand. It's enough power to roast 3.3 millions peanuts on a sunny day or 124,000 jars per month.