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Case Study 3 – 150 kW solar system cost benefit assessment

A solar system greater than 100 kW in Size is considered to be a Large scale Solar Generator.

There is likely to be two types of projects.

  • 100% of the Energy generated is used in property.
  • 100% of the Energy generated is exported to the grid.
Scenario 1
  1. If you decide on a 150.42kW system (460 off SUNPOWER E20/327W panels) and it costs you $336,858 out of pocket fully installed (after STCs, LGCs & excl. GST).
  2. Your business is located in Newcastle, NSW where a 150.42kW system produces on average 573kWh per day. This assumes a north facing roof with no shade issues.
  3. The price your business currently pays for electricity is approx 17c/kWh.
  4. You use all of the energy your system produces and you therefore don’t export anything. Export percentage = 0%.
  • Yearly benefit = 573 units (kWh) x 365 days x $0.17 x 0% export = $35,551
  • Payback period = $336,858/$35,551= 9.45 years
  • Return on Investment = $35,551/$336,858 x 100 = 10.55% per annum.
Scenario 2
  1. If you decide on a 150.42kW system (460 off SUNPOWER E20/327 panels) and it costs you $336,858 out of pocket fully installed (after STCs, LGCs & excl. GST)
  2. Your business is located in Newcastle, NSW where a 150.42kW system produces on average 573kWh per day. This assumes a north facing roof with no shade issues.
  3. The price your business currently pays for electricity is approx 17c/kWh. If we assuming that you are able to organise a power purchase agreement with your energy retailer for 15c/kWh and you export all energy generated to the grid.
  4. You export all of the energy your system produces. Export % = 100%.
  • Yearly benefit = 573 units (kWh) x 365 days x $0.15 (as negotiated) x 100% export = $31,368
  • Payback period = $336,858/$31,368= 10.74 years
  • Return on Investment = $31,368/$336,858 x 100 = 9.31% per annum

Other states have higher feed in tariffs this will have the effect of reducing the Payback Period significantly and also increasing the Return on Invest markedly.

If you are interested to look at options in other states, please Contact Commercial Solar. and we be happy to run through the details with you.

Scenario 3 The effect of the Clean Energy Technology Program (CTIP)

If your business is eligible under the CTIP, the government will effectively pay 1:1 or greater of the capital cost of the installation of the Commercial Solar energy system. Let us run through the numbers again……

 

  • If you decide on a 150.42kW system (460 off SUNPOWER E20/327W panels) and it normally costs you $336,858 out of pocket fully installed (after STCs, LGCs & excl GST). It is expected that after review for eligibility based on a 1:1 government funding package, the capital cost will be reduced to approx $116,169 (after CTIP, STC, LGC & excl GST).
  • Your business is located in Newcastle, NSW where a 150.42kW system produces on average 573kWh per day. This assumes a north facing roof with no shade issues.
  • The price your business currently pays for electricity is approx 17c/kWh. This is a conservative approach. The average electricity price over the life of the system going forward may well be higher.
  • You use all of the energy your system produces and you therefore don’t export anything. Export percentage = 0%.
  • Yearly benefit = 573 units (kWh) x 365 days x $0.17 x 0% export = $35,551
  • Payback period = $116,169/$35,551 = 3.59 years
  • Return on Investment = $35551/$16,169 x 100 = 27.82% per annum.

As you can see, the Clean Energy Technology Program can be very rewardingfor the installation of Solar Energy Systems. It is expected over time the electricity price will increase and this scenario will look more attractive. This will help your business to become more competitive in the market over time with a high Australian dollar.

For a more information on how the CTIP program can help you business, see the Ausindustry website show link and for a detailed assessment Contact Commercial Solar.


Disclaimer: the figures used in the study above are indicative only, a specific evaluation of your particular businesses needs will be taken into consideration when developing your assessment and proposal.


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