Solar Power

[poppa x]

I'm considering installing solar panels on my roof at the factory.
I have received two quotes with both being around 100 kW to cater for our daily usage of 600 kWh.
The claim is I will have a payback period of 5.5 years.
But due to the high cost, I need to be certain of this pay back period.
If it's more than 5.5 years then it becomes a marginal economic project.

Does anyone have experience with medium/large scale solar installations?
And if so, any tips?

BTW, I'm approaching this as a cost saving excercise. The environmental aspects are being disregarded.

 

[AngryAnt]

Indirect answer but doesn't it depend entirely on the price of grid power? If that goes up more than the assumptions in the current payback estimate then you are laughing. If it goes down, payback will take longer.

Given the chaos around energy policy in this country I'd bet on it going up.

 

[mrposhman]

I'm considering installing solar panels on my roof at the factory.
I have received two quotes with both being around 100 kW to cater for our daily usage of 600 kWh.
The claim is I will have a payback period of 5.5 years.
But due to the high cost, I need to be certain of this pay back period.
If it's more than 5.5 years then it becomes a marginal economic project.

Does anyone have experience with medium/large scale solar installations?
And if so, any tips?

BTW, I'm approaching this as a cost saving excercise. The environmental aspects are being disregarded.

I know its not the same scale but I have a 1.5kw system that generates about 10-13 kwh in summer and probably 4 or 5 during winter, so the estimates of 600kwh sounds about ok.

In terms of your capex and identifying savings, always work out the payback yourself. In terms of solar it all depends on your hours of operation and what you do with excess power produced. If your hours of operation go outside of daylight hours then you will still be buying from the grid, and you may produce excess during the day so depends on if you can receive fee in tariffs from the government for returning excess power to the grid, or whether you pay for storage or whether you let excess just lapse. All have different impacts on solar.

The company I work for are considering going through the same exercise (assume the decision to review may have come around from the tripling in energy prices in VIC?) as we have large warehouses capable of sustaining a lot of panels. The other thing you may want to consider (depends on if you are looking at P&L or cashflow impact) as depending on the length of your lease I believe accounting standards dictate that the capital you invest through the capex can be depreciated only over the length of the lease and no longer even if the expected useful life is greater. Obviously if you own the building then this doesn't matter.

 

[poppa x]

Thanks Ant and Posh men.
Good info especially the lease impact of writing the cost off.

The Solar people are assuming annual grid price increases of 4%
My gut feel is it will be more closer to 10% than 4%

 

[AngryAnt]

Thanks Ant and Posh men.
Good info especially the lease impact of writing the cost off.

The Solar people are assuming annual grid price increases of 4%
My gut feel is it will be more closer to 10% than 4%

I think Posh had the better answer