The millions of Australian residences with solar panels, alongside utility-scale solar, have helped Australia become the world leader in installed solar capacity per capita.1 It's ensured solar is a significant source of power across the nation.
While adoption has accelerated for households, the opposite is unfolding for businesses. In October 2022, nearly one in five businesses were planning or considering on-site solar generation2. A year on, new research shows only a fraction have solar in place or are earmarking investment.
Over the same period, energy prices have risen sharply, and many businesses are advancing decarbonisation plans that would benefit from renewable energy supply. Amid these potential tailwinds for solar, the question remains what's holding back businesses?
Yes, not all sites are suitable for solar installation, and costs are under the microscope in the current economic climate. However, the cost of solar technology has also come down in recent years with implications for the business investment case.
A telling figure in the research also might help explain. Almost 41% of businesses said they were unaware of the benefits of solar and battery storage3. They want to know more, suggesting a lack of information and guidance might stifle solar ambitions.
The decision-making essentials
Chris Moldrich, General Manager Asset Finance, CommBank, said: "While some larger organisations have moved to rooftop solar arrays, it's still in the early days for smaller and mid-sized businesses."
"Affordability is certainly a factor to be worked through, but businesses should model the costs, benefits, and payback to determine if it's viable.
"However, with a limited understanding of the solar market dynamics and potential costs, it's challenging for businesses to weigh up benefits by themselves."
Moldrich says that to assess whether solar is the right choice for your business, certain inputs can help. Here are some worth considering:
- Determine if your site is right: not all sites will be suitable for solar configurations, and the benefits can vary across business types. For example, it's more advantageous for businesses with higher daytime electricity usage.4
- Establish a baseline: gather details about your current electricity consumption and tariffs, which can be obtained from your energy bills.
- Evaluate the costs of solar: getting a quote can help. The Clean Energy Council has accredited providers that can provide the costs to purchase, install and run solar panels and systems.
- Look into incentives or subsidies: there can be rebates and subsidies offered by federal and state governments that can lower the cost5. A feed-in tariff may also apply, where you are paid for any surplus energy being fed back into the grid.
- Consider the broader benefit: whether energy independence may have future advantages or a lower emissions footprint, consider the non-financial equation.
- Access more competitive financing: there may be the potential to secure asset financing that rewards green purchases with a lower rate.
Making solar more accessible
Moldrich explains that CommBank offers discounted rates through its green equipment finance solution, helping decrease the cost of funding as well as spread larger upfront payments over time. These discounts can apply to solar, commercial batteries and even EV chargers.
"As the Department of Climate Change, Energy, the Environment and Water points out, loans can also usually be met from the savings in energy bills6, Moldrich says."