i am your guide to solar finance for business

Energy savings and resource efficiency


Learn about what impacts on solar system costs

The cost of a commercial scale solar system will vary depending on the quality of the components, the design, installation and the ongoing risks related to production and consumption.

Solar systems involve upfront and ongoing costs

  • Upfront costs: system hardware, design, installation and non-asset related transaction costs
  • Ongoing costs: lifetime operation, monitoring, maintenance and component replacement costs

Size, quality and complexity will affect the cost of your system

  • System size, including number of panels and size of inverter • Quality of the panels, inverters, monitoring and components
  • Quality of the design and installation
  • Complexity of connecting your system to the electricity grid
  • Complexity of site preparations such as construction, tree removal, development approvals
  • Ongoing monitoring and maintenance needs

Warranties and performance guarantees

Most systems have warranties and performance guarantees. Quality systems that include ongoing monitoring and maintenance will help deliver the expected bill savings.

Ongoing system performance - production and consumption risks

Production risk - the risk that the system doesn’t produce as much electricity as predicted. This is typically managed through warranties on system equipment and performance guarantees.

Some solar finance options incorporate guarantees of production levels. Such guarantees can impact on the cost of the system.

For example, under a power purchase agreement (PPA) you only pay for the energy produced. The PPA provider takes on production risk and associated maintenance costs. This means that a PPA may cost more than other options, but it has a lower risk.

Consumption risk - the risk that you don’t use as much electricity as planned. This is generally taken on by the business that uses the electricity. To manage this risk, before deciding on the size of your solar system:

  • Understand your energy usage patterns.
  • Implement energy efficiency measures.

Saving surplus energy by using battery storage is another way to manage this risk.


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Page last updated: 10 December 2015