Why good solar analysis matters

At the heart of an investment in solar, is a financial commitment that leads to a reduction in energy costs. And, as solar grows in popularity, the system sizes also grow, the total investment is growing. So the stakes are higher. Quite often we are doing analysis for million dollar + systems. (We start at 50kW systems, businesses only. They don't cost a million dollars, in case you were wondering).

Recently, I presented a solar case to a division of a multinational company, that has looked at solar a few times over the years, but wanted to refresh their understanding…to see what has changed.

Their feedback was that our analysis was the most in-depth and clear that they had ever seen. It wasn’t a ‘fall off your chair – we must do this’ scenario. It was about middle of the road for financial returns (just over 5 years). However, because of the confidence in our analysis method, it means they can present this internally as an option, confident in the outcome.

I sold residential solar for a few years (2010-2013)… and a lot of the ‘analysis’ for that was educated guesswork. Data about exactly when you use power just isn’t available… so people assume all sorts of things… ‘oh you probably use 40% of your power in the day, that sounds reasonable, so a 6kW system will work’. There’s a lot of back-of-the-envelope squiggling that happens. And, in a lot of cases, that can be OK. It’s a smaller financial decision. Homes are paying almost twice as much for power as a business, so if you’re a little bit out, it’s not awful.

Unfortunately, a lot of solar companies still play the guessing games when it comes to commercial solar. This means business decisions are made on highly flawed data. That can be very expensive.

So, what goes into commercial solar analysis?

• Looking at interval data of your existing consumption, so we know how much power you use, and when. (Interval data is 15 or 30 minute recordings of your consumption and peak usage, 24 hours a day, 365 days a year. It’s typically free upon request from your energy retailer, and we organise that for you).
• Asking about changes that are likely to occur – planned increases or decreases in consumption.
• Learning what changes you can make to your pattern of consumption. For example, in a cool-store, you might be able to use more during the day and less at night, therefore maximising the benefit of solar.
• Knowing what a system will produce for you. To do this, we carry out a preliminary design of your system taking space / roof constraints into consideration. This includes designing around and minimising the impacts of self-shading from parts of your building or other obstacles.
• Looking at historical Bureau of Meteorology data so we can estimate the yield of the system (kWh / kWp / year).
• The simulated system production is mapped against your interval data so we can see when the system would export and when the power would be consumed.
• Understanding your tariff structure so we know what the value of the solar power is, as an offset, at the time it is produced.
• Understanding if you get a feed in tariff, and what that is worth. It’s rare now, except sometimes in ACT.
• Knowing where you are up to in your energy contract cycle, and some predictions about power rates when you renew.
• Understanding if your DNSP (grid owner) will actually allow you to export, or if we need to limit that. While the power is typically worth nothing to to export, it still matters as it means power production is scaled back, and LGC creation can be limited.
• Being able to predict the impact that solar will have on your usage at each rate (peak / shoulder / offpeak). When I say predict, I mean model mathematically, not guess.
• Being able to predict the impact of solar on your other charges such as your peak demand charges (kVA). We can predict this because the solar production data is mapped against your actual usage.

The above are some consumption related matters.

As well as that, we make product and system choices in our preliminary solar design. Our panels are typically from companies such as Trina, Jinko, Sunpower or others. Our inverter choices are typically from SMA or ABB. 

Naturally we understand the costs of installing a system including a lot of factors that others leave out:

• Council permissions - either Development Application or Complying Development Certificate costs
• The cost of materials handling such as scissor lifts or cranes
• The cost of requirements from your DNSP that can add thousands / tens of thousands to a job.
• Structural engineering assessment of your r
• When needed, power factor correction.
• Five year production guarantee
• Full active monitoring of the system

What these mean are that you get a turn-key solution. We know it'd be easier to leave out parts, and add in them in later as variations (often when someone is cheaper than us, it's because they have not included everything).

More importantly, we present some financial options to you including:

• Upfront purchase
• Leasing options (typically cashflow positive from the outset)
• Power purchasing options - not even a system purchase from you. We can install a system at our cost and sell you power at less than you buy it for now. Then at the end of the agreement, we give you the system.

So, here’s a challenge…

If you’ve been wondering what solar would do for you, and you are curious to see the financial benefit, let me do a full analysis for you.

What we often see is a range of payback periods from around just under 4 years, to a high of about 7 years.

But when we present yours, it will be specific to your situation, and we’ll actually guarantee that result to you.

Once you see your results, if it seems worth pursuing, great. If it doesn’t meet your criteria, then at least you know exactly where you stand.

If you have a quote, or some analysis from someone else, and you're not confident in it, let's redo that for you. We often see quotes / proposals that are hopeful rather than factual about expected returns.

What we are finding is that there is almost NO case where we can’t install a solar system and have it deliver a cash-flow positive outcome for you. Our business is growing, with around 3-4MW being installed each month at the moment, and a major win of around 8.5MW to be announced in the next few weeks.

If you’re curious, let’s talk! Send me a message through LinkedIn with your details or call me on + 61 424 225 097

(Oh, and if you're with a small solar company that wants to do proper analysis but doesn't, call me too. We have a solution for you).

Stuart Gordon

Smart Commercial Solar