As a business owner or commercial property manager, you’re likely always on the lookout for ways to keep costs down. What if you could also demonstrate to customers and shareholders that your operation is sustainable? Increasing efficiencies is the prerogative of all businesses, so if you haven’t looked at commercial solar (or thought it was too big an expense before), you NEED to read on. Srsly.
The Top 5 Benefits of Commercial Solar:
???? Saves Money Year-on-Year (Cha-ching!)
???? Business Improvement Deductions (Nice!)
???? Reduce the risk of rising power prices in a downturn (Phew!)
???? Expand a sustainably-minded customer base (Yeah!)
???? Improve brand perception (Awesome!)
1. Commercial solar offers a great return on investment
How much does it cost to set up a commercial solar system? First, look at your bills to determine the right size for your operation. A business which has an annual electricity bill of around $15,000 might look at a 30kW commercial solar PV system. You could expect an average payback period of 3-5 years. A 30kW system would require the space for around 120 panels.
Solar systems of up to 100 kilowatts can also receive STCs (Small-scale Technology Certificates) that further decrease the cost of solar power. Note that STC discounts are generally included in the upfront quote from a solar installer.
2. Instant write off on business assets (will be slashed Dec 31)
Thanks to Frydo, many businesses can write off depreciating assets as an instant tax deduction rather than over several years. Because they’re a depreciating asset that could be removed and resold, a commercial solar PV system is different from capital works for building improvements, which also has a different process for claiming.
I have to stress that we can’t give you financial advice. Stu definitely can’t. However, you should know that the general gist is: until 31 December 2020, the instant asset write-off threshold amount for each asset is $150,000 for businesses with an aggregated turnover of less than $500 million.
According to the ATO website: “From 1 January 2021, the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be $1,000.” Talk to your accountant and financial adviser to determine if a solar as an asset write-off is right for you – but act soon if it is!
3. Commercial solar protects against uncertainty
Off the back of a global pandemic, shaky relations with China, and whatever the USA is doing right now ???? doomsayers are predicting the next crash could come soon. Either way, looking after your energy security is an economically sound investment. After all, it’s pretty hard to carry on business if you’re having trouble keeping the lights on.
For commercial property owners, a long term vacancy might mean that your investment could turn into a financial burden. With commercial rooftop solar installed, but without tenants, you can sell any unused energy onto the market. It’s not quite as cost-saving as using the power onsite. Still, a 30kW system would generate around 120kW a day (weather/orientation dependent).
4. Your customers are going green: go commercial solar!
Woolworths has plans to run their entire operations on renewables by 2025. Large tech firms have already made the switch; Apple announced in 2018 that all of its operations are already 100% powered by renewable energy. But you don’t need to be a giant firm to benefit. Solar is already 70% cheaper to install than a decade ago.
“Change before you have to.”
― Jack Welch
If you can show that your business is ahead with solar, on the right side of history with the climate crisis, AND benefit financially… well, that’s a no brainer to get commercial solar.
5. Improve brand perceptions with commercial solar
Your brand is more than a logo or trademark. It’s more like a bird’s nest of everything that a customer has ever gathered and experienced in their interactions with your company and advertising. Whether you work in Fast Moving Consumer Products or B2B, your customers notice your values. Gaining a reputation for being “the sustainable one” or “the ethical one” in your category is a pretty solid point of difference to uphold, we reckon. Commercial solar could also help with becoming B-Corp accredited, potentially opening up a new network of huge partnerships.
What sort of businesses suit commercial solar PV systems?
Any business with a roof, or the land to accommodate panels, can benefit from commercial solar. All kinds of businesses are turning to solar for their own reasons.
The DeGrussa Copper Mine commercial solar project in Meekatharra was commissioned in June 2016. Now, solar power provides the majority of the mine’s daytime electricity requirements, while offsetting 20% of diesel usage annually.
The Grove Distillery in Busselton is completely off-the-grid; the first fully solar-powered distillery in Australia. The company installed 220 solar panels with 4.5 tonnes of batteries in an onsite shed. Back in 1995, their green business initiative also planted over 6,000 trees to offset their carbon footprint as a result of production. Thirsty work, but worth a cheers!
A project of our own is GF Engineering. They’re helping Australia combat greenhouse gas emissions (52,425 kg CO2 saved) and reduce their dependence on fossil fuel to run their business. They went with a 39.6kw Commercial Solar System, which included 120 x 330w JA mono perk split cells.
Another is Alcoa’s Peel Regional Office in Pinjarra, which is kitted out with an 80kW Solar System. In line with Alcoa’s global commitment to sustainability, the building maintains a 4.5-star national energy rating.
But, I don’t own my building. Can I get commercial solar?
Here’s the thing. Commercial lease vacancies are high in Perth at the moment. So, if you have a profitable business that can keep up with lease payments, it’s worth talking to your commercial tenancy agent about cutting a deal that benefits you both. Koala Solar can put you in touch with legal advisers for getting a standard contract around ownership and benefits of a shared commercial rooftop PV system.
– Kev Koala