Business owners across Australia have been actively investigating the installation of a solar system on their premises to harness the power and the sun and reduce their energy costs.
However, one crucial question often arises: How long will it take for my solar system to start paying for itself?
Let’s take a look at some valuable insights that we’ll help you to make informed decisions for your business.
Understanding the payback period
The time it takes for our solar system to pay for itself is commonly referred to as the ‘payback period’. It represents the duration required to recoup your initial investment through the savings you are making on your energy costs.
Several factors influence the payback period, but on average we see most commercial systems have paid for themselves within 3-5 years. Considering that the average lifespan of a quality solar system is approximately 25-30 years, this is a speedy payback timeframe!
Factors that play into your solar payback period
There are a number of factors that influence the amount of time that it will take for your solar system to pay for itself. These include:
- The cost of energy per kilowatt (kWh)
- The size of your solar system
- How much the solar system costs
- How much energy your solar system will produce, and how much of that you will actually use
We can work closely with you to help guide you through each of these factors, and how they will impact how quickly your solar system will start paying for itself, but let’s break them down:
The cost of energy
It’s no secret that energy costs have increased significantly for Australians in recent months, with residential customers on standard retail plans seeing price increases of 20.8% to 23.9% from 1 July 2023. With power prices increasing, this has an effect on how quickly your solar system will start paying for itself because the power costs more per kWh.
To estimate the payback period accurately, we need a clear understanding of your business’s energy consumption. To help you do this, get your electricity consumption data from SA Power Networks. We then break this down into day and night time, and the different times of the year. This data will serve as a baseline for calculating potential savings and determining the right-sized solar system for your needs.
Evaluating solar system size
The size of your solar system directly impacts its ability to generate energy and contribute to your savings. While a larger system can generate more electricity and potentially reduce your reliance on the grid, it’s important to note that bigger is not always better. We work with you to consider factors such as the available rooftop space, sun exposure, and your energy needs when determining the optimal system size.
The cost of the solar system
The adage of ‘you get what you pay for’ rings true when it comes to solar. While it may be tempting to pick the cheapest of the 3 quotes you’ve received for solar in your business, we’d encourage you to think about a few factors:
- Lifespan – Will the solar system have the longevity that you need? If the system fails early, you’ll be up for further investment.
- Warranties – What are the warranties on the system and the panels?
- Monitoring – Does the solar company offer monitoring of your system? A good provider will offer monitoring of your system and should be able to tell you if there are faults impacting its output – which in turn can effect the payback timeframes.
Talk to Peter at P4B Solar if you’d like to understand how you can harness the power of the sun to reduce your business’ carbon footprint, and contribute to a sustainable future.
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If you are considering solar for your business either as a way to combat rising energy prices, or to look at reducing your carbon emissions, P4B Solar is here to help.