Common Issues that Limit Solar Power, and How They Can Be Solved

29th Aug 18

Written by James Doyle

From the financial standpoint, deploying a commercial solar system is almost always a good decision in Australia. Since local electricity is expensive, and solar systems are affordable and long-lasting, an attractive return on investment is guaranteed. You just have to make sure the photovoltaic system uses high quality components covered by warranties, and get in touch with a qualified solar installer.

However, even when the business case for solar power is so favorable in Australia, there are factors that prevent its use in some properties. The following are some of the main issues that hold back homeowners and businesses who are considering solar power:

  • Lacking the capital for the upfront investment in solar power, or being unwilling to assume the full cost at once.
  • Not owning the building where you live or where you operate your business.
  • Having no space for solar panels, or having an area that is unsuitable due to shading or similar issues.

Barrier 1: Upfront Investment

Although solar power systems are much more affordable than one decade ago, the upfront investment can still be out of reach for some homeowners and companies.

  • After subtracting the cash incentive from Small-Scale Technology Certificates (STC), you can expect to pay over $6,000 for a 5-kW residential solar system.
  • Of course, business-scale installation are more expensive: a 100-kW solar system for a medium-sized company can easily have a price above $100,000.

Even if the capital for a solar system is available, homeowners and businesses may be unwilling to spend the full amount at once. For example, a residential user may be budgeting an air conditioning upgrade first, and a company may be considering a new piece of equipment that increases manufacturing productivity.

When capital is a limitation to deploy solar power, a Power Purchase Agreement (PPA) is a great alternative.

  • When you sign a PPA, a solar provider installs a photovoltaic system at zero upfront cost, and instead you agree to purchase the electricity output during a specified term.
  • The provider is responsible for operation and maintenance, and you get electricity with a discount of up to 50% compared with your normal tariff.

An added benefit of a solar PPA is that you get maintenance from experts for the entire term of the contract. If any piece of equipment must be replaced and there are warranty claims, the PPA provider takes responsibility.

Barrier 2: Building Ownership

If you rent an apartment or a commercial space, there is little incentive to upgrade the property because it doesn’t belong to you. Although you may get authorisation from the landlord to install a rooftop solar system, this is only a viable option if you plan to rent the same property for a long time. If you change your mind and wish to relocate, you have to dismount and take the solar system with you, or you must convince the owner to purchase it.

There are also viable solutions in this case, but the best approach changes depending on how you are billed for electricity:

  • Some tenants are billed directly by electricity companies, and there is a separate meter and account for each dwelling or commercial space.
  • In other cases, there is a main power meter and the landlord is billed for total consumption. Individual tenants are sub-metered and billed internally.

If you are metered and billed directly by an electricity retailer, you can consider a concept called community solar power, where you reduce power bills with electricity from a solar system installed somewhere else. The purchasing options are the same as when you deploy a solar system directly on your property: paying to own a portion of the community solar system, or paying for cheaper electricity through a PPA.

If you are sub-metered, the landlord can deploy a solar system to reduce the total power bill, and then a portion of the savings can be passed on to tenants. With this approach, just keep in mind that the property owner must agree first – a solar PPA can be an attractive option, since the upfront investment is zero, and electricity savings from common areas benefit the owner.

Barrier 3: No Space for Solar Power… Or an Area with Poor Conditions

There are also cases where electricity consumers cannot deploy solar power simply because there is no space. This is a common limitation for apartments owners in multifamily constructions, who normally have more apartments above, or a shared rooftop that cannot be used for solar panels. Businesses may also face this limitation if they purchase a commercial space with no individual rooftop area.

The community solar power approach is also viable in this case: since there is no rooftop area available for a solar system, electricity consumers can use the energy output of a photovoltaic array located somewhere else. Depending on their preference, they can purchase a share of a community solar project, or they can sign a Power Purchase Agreement (PPA).

Some electricity consumers have another limitation: the space for solar panels is available, but the project cannot proceed due to site conditions. For example, some old roofs use brittle fiber-cement shingles, which can easily break during the installation of a solar system. Other properties have adequate roof structures for solar panels, but are constantly covered by the shadows of nearby buildings or natural obstacles.

When the area for solar panels is available, it may be possible to fix site conditions limiting their installation.

  • For example, if the property owner is considering a roof upgrade, the new material can be chosen to be suitable for solar panels.
  • When the issue is shading, it may be possible to deploy solar panels as long as the array location is chosen carefully. Shadows from trees can be eliminated by trimming them, but make sure you meet the legal requirements or you may face hefty penalties.

In cases where the obstacles casting shadows are impossible to remove, you can follow the same approach as renters and property owners with no rooftop – purchasing electricity from a solar array located somewhere else.

 

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