Melbourne CBD

Commercial Solar Melbourne

In this article, we discuss all the important facts you need to consider when installing commercial solar in Melbourne.

Our commercial solar Melbourne buying guide

In this article, we discuss all the important facts you need to consider when installing commercial solar in Melbourne. We cover:

  1. The cost of a solar installation for a business located in Metro Melbourne
  2. Potential extra costs for your commercial solar installation
  3. Savings calculator and Return on Investment examples for recent commercial solar installations in Melbourne
  4. Commercial solar output calculator and production figures from real solar installations in Melbourne
  5. Funding options for business installation commercial solar (Cash / Finance / Power Purchasing Agreements)
  6. How many solar rebates you can get for your Melbourne Installation
  7. Case studies on commercial solar projects Kuga have delivered in Melbourne

We have provided a detailed buying guide for businesses looking at purchasing solar because its a large investment and knowledge is power. Kuga also offers a detailed feasibility report at no cost, so you can clearly understand what your return on investment is when installing commercial solar in Melbourne.

Commercial solar price guide for businesses in Melbourne

What businesses need to consider is that not all commercial solar installations are the same. We have developed a price guide for businesses looking to install solar in the metro area of Melbourne. Kuga has competitive pricing as we are manufacturer direct and have internal electricians that do most of our commercial solar installations across Melbourne. Our office and warehouse are located in Keyborough Melbourne and we service businesses across Victoria.  The size of the solar system impacts the cost per kW.  The large the solar system size the more equipment is required to ensure the solar installation is compliant to commercial standard. Here is a guide to 3 different commercial solar projects:

 

Solar System Size Price range for commercial solar installations in Melbourne
30kW$20,000-30,000
100kW$75,000-90,000
500kW$700-800,000

 

Potential extra costs

The smaller solar systems are typically lower cost per kW. As you will see we have outlined key factors which will affect the pricing of your commercial solar installation.

Network protection is a requirement for all commercial solar inverters over 30kW

In the earlier table above, you may note the 30kW system is the cheapest cost per kW than any other size. This is due to the legal requirement for Network Protection above this 30kW size. Network protection ensures the solar shuts down it there is an issue with the network, protecting anyone working on the lines.

 

Solar panel orientation and extra charges for installation a tilt system on Solar Panels

 

 100kW Solar facing East/West                  

 

100kW Solar facing North/South

 

Here are 2 examples located in Bayswater and Scoresby in Melbourne. Both solar systems are 99kW. The solar panel installation on the left has the solar panels orientation of 50kW to the east and 50kW installed on the west. The savings of the East/West solar system are 4.5% less than the North facing system.

Depending on the orientation of your building, some or all of your solar panels may need to be put on tilt.

East/West rooflines may not need any tilt on their solar panels. However, if you have a North-South roof, the Southern part may need panel tilt.

Adding tilt to a solar system increases its price at a rate of $50 per panel. For a 100kW system, this may increase the system price by $16,000!

More information on panel tilt can be found in KUGAs optimum panel tilt guide

 

Does your switchboard need to be upgraded for your solar installation?

Each state in Australia has its own requirements for switchboards. In Melbourne the way to tell if you need a switchboard upgrade is ……

Many businesses progressively add on to their switchboard, leaving no extra room for additional electrical components. This can often add several thousand dollars to the price of your system.

Many solar installers will quote a price based on system size without even looking at the switchboard. Below are examples of a full switchboard, and one with available space.

No switchboard upgrade required for solar installation 

 

No switchboard upgrade required for solar installation             

 

TIP: ensure your solar installer ALWAYS checks your switchboard before quoting.

How to Calculate your return on investment

Calculating the return on any commercial investment is essential. With solar, you first need to know the annual savings provided. To calculate the Kilowatt-hour savings in Melbourne, a rule of thumb is to follow the basic formula:

Annual Savings (kWh) = 3.6 x solar size (kW) x 365

Annual savings ($) =  Annual Savings (kWh) x $/kWh (found on your electricity bill)

ROI (years) = solar price/annual savings

KUGA has put together the following guide as an estimate. Note that smaller energy users are typically charged more for electricity, so solar gives a faster ROI.

 

Solar System SizeROI (years)ROI (%)
0-39kW2-330-50
40-99kW3-425-30
100+5-714-20

Melbourne solar output calculations for commercial solar installations

There is a difference in the sunshine, therefore, solar production is different in each state. For Melbourne, the average daily energy production per kW of solar is 3.6kWh. This means a 100kW system should produce 360kWh of daily electricity if orientated due North.

For Melbourne, see the below examples of solar production and output from Kuga’s installs.

39KW Solar Production Example

The production data below shows a 39kW commercial solar installation in Dandenong South, Melbourne.

The theoretical production would indicate this solar system would produce 140kWh per day when facing North. In reality, this system produced 142kWh per day.

100kW Solar Production Example

The below image shows 12 months of results for a 100kW solar install in Dandenong South. In this example, the actual production of the solar system exceeded the Clean Energy Council’s recommended production by 4.6%.

100kW Monthly Actual vs Theoretical Solar Production in Melbourne
525kW Solar Production Example

The production data from a half-megawatt solar project in Campbellfield, Melbourne can be seen below. Note the variance in monthly production, which is due to weather conditions. In this instance, production can be down 35% in any given month, while remaining consistently above in others.

525kW Monthly Actual vs Theoretical Solar Production in Melbourne

How many rebates can you get with your commercial solar installation in Melbourne?

Just as the solar production differs between location, so too does the amount of Small Scale Technology Certificate (STC) rebate available.

The STC is the rebate that can be used to discount the cost of a commercial solar installation. Rebate ($) = number of certificates x market value of certificate.

The Renewable Energy Council has split Australia into 4 zones. Each zone has a different number of STCs per kW of renewable energy. In Melbourne, there are 14 STCs for every kW of solar energy installed.

The table below gives the approximate STC rebate amount for common system sizes. Note that these quantities are based on an assumed STC value of $35

Solar System CapacityAmount of Certificates Total Rebate value ex GST ($)
20kW280$9,800
39kW546$19,110
80kW1,120$39,200
100kW1,400$49,000

 

Businesses can check their zone buy entering their postcode on the STC calculator

Commercial solar projects are large, so how can you fund your project?

There are four main methods of financing a commercial solar energy project in Melbourne.

Considering buying your Melbourne Commercial Solar Project outright?

Melbourne business owners need to consider the capital cost of the solar installation, their available cash vs. where they can best invest their money. We have found the pros and cons of businesses paying cash for solar are:

Pros for paying cash for your solar installation

  • No paperwork or conditions
  • Ability to write off an asset in 12 month period (if under $30,000)
  • Not paying any additional interest costs

Cons of paying cash for your solar system

  • Often requires deposit
  • Requires upfront investment of cash
  • Low-interest rates can mean your cash is better spent elsewhere

Why business owners finance their Melbourne Solar Installation

Pros of leasing your solar installation

  • $0 upfront investment
  • Cashflow positive
  • All repayments are tax-deductible

Cons of leasing your solar installation

  • Subject to finance conditions
  • Repayments include interest

Why Melbourne Businesses consider power purchasing agreements for solar

Pros of a PPA for your solar installation

  • $0 upfront investment
  • Cashflow positive
  • The system is ensured and maintained by a third party

Cons of a PPA for your solar installation

  • The highest amount of fees
  • Requires longer terms to be cashflow positive (7-10 years)

Environment Upgrade Agreement (EUA)

Pros of an EUA for your solar installation

  • $0 upfront investment
  • Cashflow positive
  • All repayments are tax-deductible
  • Transferable ownership with the property title

Cons of an EUA for your solar installation

  • Subject to finance conditions
  • Repayments include interest
  • Not currently offered by all Councils

In 2002, Sustainable Australia Fund (formally Sustainable Melbourne Fund) was founded by the City of Melbourne Council. This allowed renewable energy projects to be funded by attaching a loan to a property title. The repayments are collected through council rates, and terms can be up to 20 years.

Commercial solar in Melbourne is able to be funded in this way, provided the business is located in a participating Council.

Environment Upgrade Agreements (EUAs) are available in:

Baw Baw Shire Council, Brimbank City Council, Campase Shire Council, Cardinia Shire Council, Central Goldfields Shire, City of Greater Bendigo Council, City of Greater Geelong Council, City of Kingston, City of Melbourne, City of Monash Council, City of Port Phillip, Darebin City Council, Greater Dandenong Council, Greater Shepparton Council, Hepburn Shire Council, Hobsons Bay City Council, Horsham Rural City Council, Hume City Council, Indigo Shire Council,  Knox City Council, Macedon Ranges Shire Council, Maribyrnong City Council, Mildura Rural City Council,  Mitchell Shire Council, Moira Shire Council, Moonee Valley Council, Moreland City Council, Mornington Peninsula Shire, Mount Alexander Shire Council, South Gippsland Shire Council, Wangaratta Rural City,  Warrnambool City Council, Wellington Shire Council, Wyndham City Council, Yarra Ranges Council

KUGA Electrical is an approved installer and has completed several solar installations using this finance offer. The latest EUA was completed for the Railway Hotel, located in the Baw Baw Council.

 

 

Recent case studies for Commercial Solar installations in Melbourne

 

KUGA Electrical has produced over 3 GWh of clean energy for Australian businesses since the beginning of the year. The majority have been in Melbourne. Some notable examples can be seen below:

525kW commercial solar installation

Business name: Della Rosa

Location: Campbellfield, Melbourne

System Size: 525kW

Solar Panels: JA 375W Mono Perc Half-Cell

Solar Inverters: Goodwe 50kW

Della Rossa is a pizza manufacturer, and the cash flow positive nature of their solar install allowed them to enhance their borrowing and expand their business further. KUGA installed a 525kW commercial solar system. This involved a whopping 1,400 individual solar panels.

In 2019, this install was awarded the Master Electricians Energy Efficiency Project of the year.

200kW commercial solar installation

Business Name: SPA Industries

Location: Hallam, Melbourne

System Size: 200kW

Solar Panels:  AUO 260W solar panels

Solar Inverter: Goodwe 50kW

Spa industries is a spa pool manufacturer based in the Melbourne suburb of Hallam. In 2018 KUGA Electrical was awarded the Master Electricians Commercial Project of the year for their Spa Industries project.

The key with this install was the design of 2x 99kW solar systems. This was made possible since Spa Industries has two separate electricity meters. The benefit here allowed them to get double the upfront STC rebate associated with sub 100kW systems.

99kW commercial solar installation using Australia Sustainability Fund

Business Name: Phys Pty Ltd

Location: Pakenham, Melbourne

System Size: 99.8kW

Solar Panels:  JA 375W Mono Perc Half-Cell

Solar Inverter: Goodwe 50kW

Phus Pty Ltd is a manufacturer of plastic molds.  This install by KUGA Electrical was the first Environmental Upgrade Agreement (EUA) completed by Cardinia Council.

Not only did the company benefit from the low finance rate and transferability of an EUA loan, but they received extensive (and free) promotion by Council. The Mayor Councillor Graeme Moore personally commended the business for their commitment to sustainability.

 

Contact KUGA for your Melbourne Commercial Solar Requirements

Wondering if solar power is right for your Melbourne business? Have more questions regarding specific costs and returns?  Contact the Melbourne team on 03 8797 0190 or email service@13kuga.com.au.