If you’re a company owner, there’s a good chance you’re unhappy with the cost of grid-connected electricity and would like to reduce your costs with solar panel system on your roof. On the other hand, there’s the chance that you lease your business premises, and there’s not much incentive to go solar panels. You can’t even carry it away after you leave.
Some educated people have installed solar panel system on the rooftops of homes without any strings attached aside from a slight increase in the weekly rent. Unfortunately, such solar-powered saints remain incredibly uncommon in the world of business. To my knowledge, landlords are known to be extremely cautious about investing in their property unless they’re sure of a good return on their investment. I’m not saying that all landlords are a tight-rope walk; however, I’ve encountered some who might smash coal to diamonds with the hands of their fingers.
For solar power to be installed on commercial roofs rented to tenants, it is necessary to provide an arrangement that offers tenants in business some of the advantages of solar power and ensures that they earn the rate of return they want. They install solar panels at the business’s premises and collaborate with the electricity providers. The tenant is paid 22 cents 1 per Kilowatt-hour of solar energy they consume. It is lower than the grid power costs for many medium and small firms. The landlord gets 20 cents for every kilowatt-hour of solar power the tenant utilizes (22 cents less the GST of 2 cents) and any feed-in tariff it receives for supplying electricity to the grid. Solar power equipment subtracts their cost from 2 cents per solar kilowatt-hour created, regardless of whether the tenant utilizes it or receives an additional feed-in tariff.
Though most tenants are most likely to have their power bills cut by a small amount, the great news is that this offer costs absolutely nothing. Even if they reduce their electricity bills by a tiny amount of money, the deal still is an advantage for the tenants. They’ll pay less, the environment will gain, and the solar panels on the roof could make the structure somewhat more relaxed during summer.
Tenants And Landlords Have To Agree To Use Solar Power Systems
The service benefits tenants who pay over 22 cents per hour in grid electric power. There’s nothing negative I can imagine unless you believe the cost of grid electricity is likely to drop below 22 cents per kilowatt-hour or you operate only during the night. Therefore, while tenants have to accept the professional service, they’re not the one that needs convincing. The landlord is the one who must pay to purchase the system, and they’ll only consider it when they feel that the ROI for their investment will be adequate.
Some Small Businesses May Be Too Small
The landlord gets more when the tenant consumes its solar power than when it’s exported for feed-in tariffs. If the tenant’s business is likely to use solar energy, the landlord might not be interested.
The ideal situation is for companies to use an average of between 60 and 280 kilowatt-hours per day. The more closely the consumption matches the sun’s output throughout the day more efficiently.
Demand Tariffs May Be Unsuitable
Businesses that use demand tariffs will not gain from some of the professionals because the cost is lower per kilowatt-hour; however, they must be charged demand charges according to the amount of power they use. On the other hand, companies that pay a flat price for grid electricity under a standard tariff will typically be able to benefit, as will businesses that are on a time-of-use rate, mainly if the time-of-use tariff is a peak time that runs throughout the day.
Large companies with a heavy electricity consumption typically cost less than 22 cents per Kilowatt-hour.
How Much Can Tenants Save?
Tenants pay the flat rate of 22 cents for each Kilowatt-hour they use. Therefore the amount they save will be based on their pay for grid electricity.
Origin Energy is Australia’s largest electricity retailer, and I checked through Origin Energy’s Business Saver plans and discovered that Brisbane and Sydney customers who are on these plans are assured savings, but in Melbourne, prices for business tariffs following discounts varied between 36.9 cents up to as low at 20.8 cents for demand tariff. It is evident that if you’re paying 20.8 cents per month for grid electricity, the chance that you’ll lose 1.2 cents per kilowatt-hour of solar energy utilized isn’t going to make for an exhilarating experience. Therefore, it is essential to know what you’re charging for electricity from grids and examine the total cost that includes supply costs with the price Diamond Energy offers you to figure out how much you’ll be able to save. However, even if nothing is prevented, installing solar panels on your roof can still benefit the environment, which is all the incentive individuals require.
Return On Investment For Landlords
Landlords are paid 20 cents per kilowatt-hour of solar power that tenants use and the feed-in fee for solar power fed to the grid. Experts say the landlord’s solar power investment can pay back the loan within 3 1/2 years; however, this is only possible under highly favourable conditions, which include the following assumptions:
- The solar system is priced at $1 per watt.
- It generates an average of 4 Kilowatt-hours of power per day, per Kilowatt in solar panel power — This is not uncommon. However, the exact amount will be contingent on the region of Australia and the angle to which the solar panels are.
- The tenant uses all the solar power generated — this is highly unlikely.
If they pay their 2 cents per Kilowatt-hour fee is taken into account, the simple payment is made over three years and ten months.
The system will have a payback time of five years plus 3 months. This is simply a simple payment and does not include the expense of capital or any maintenance or repairs required; however, it’s still an outstanding return on investment. Suppose the size of the system and the electricity consumption habits of the tenants are appropriate. In that case, landlords can be assured that solar power systems will be able to pay for themselves in a short time.
The Payoff For The Planet
Most businesses lease their offices to create an immense amount of roof space, which has almost been out of the limits for solar energy until recent times. Therefore, I am happy to see companies striving to bring solar panels to these areas. Each additional solar panel produces slightly healthier oxygen for our children’s lungs and a little more stable climate for our kids.
