Commercial solar decision guide

Is Solar Worth It for My Business?

A plain-English guide to how Mark Fitzpatrick assesses whether commercial solar makes financial and practical sense for an Australian business.

Short answer

For many businesses, solar can be a strong investment when a meaningful share of electricity is used during daylight hours. But I would not recommend a system from the size of the roof alone. I first look at when the business uses electricity, what it pays for power, the site, future demand and the expected return.

The first question is not “How much solar can fit?”

A large roof can hold a large solar system, but that does not automatically make the largest system the best investment. The starting point should be the business itself.

I want to understand how much electricity the business uses, when it uses it and what it is trying to achieve. A factory running machinery from 7am to 4pm can have a very different solar opportunity from a business using most of its power after sunset, even if both have similar annual electricity bills.

What I look at before recommending commercial solar

  • Recent electricity bills and annual consumption
  • Operating days and hours
  • Interval or smart-meter data where useful
  • Peak, shoulder and off-peak tariffs
  • Demand charges
  • Existing solar and exports
  • Roof area, direction, shading and condition
  • Network and export limits
  • Business growth, new machinery and EV charging
  • Project price, incentives and finance

Why daytime use is so valuable

Solar usually has its highest value when the business uses the electricity as it is generated. That solar energy can replace electricity that would otherwise be bought from the grid.

If the same solar energy is exported for a much lower payment, the financial result can be weaker. This is why I pay close attention to self-consumption rather than treating annual solar generation as if every kilowatt-hour has the same value.

When solar can be particularly attractive

Businesses with steady daytime loads often have a natural match with solar. Manufacturing, workshops, warehouses, refrigeration, offices, retail, hospitality and many agricultural operations can fit this pattern, although every site still needs to be assessed individually.

Solar can also become more attractive where a business expects electricity use to increase because of expansion, electrification, new equipment or EV charging.

When I may recommend a different approach

I would be cautious about recommending a large commercial solar project where electricity use is very low, most consumption occurs outside solar hours, the customer is likely to leave the property soon, the roof has major limitations, or network conditions make the expected result poor.

Sometimes the better answer is a smaller system. Sometimes it is solar plus storage. Sometimes it is to wait until another site or business change has been resolved.

What about a battery?

A battery is not automatically part of a good commercial solar project. A business using most of its solar directly during the day may already get a strong result from solar alone.

I become more interested in storage when there is useful surplus solar, significant later grid use, expensive peak periods, suitable demand-charge opportunities or an important backup requirement. I then compare the battery against alternatives instead of assuming it is needed.

How I look at the financial result

A proposal should explain more than a headline payback number. Depending on the project, I look at system cost, expected generation, self-consumption, exports, grid reduction, annual savings, available incentives, finance, degradation and the assumptions used in the modelling.

For larger commercial projects, NPV and IRR can also be useful. The aim is to understand the investment, not just to produce the most impressive graph.

A simple example

Imagine a manufacturing business that operates from 7am to 4pm and uses machinery throughout the day. If a large share of solar generation can be used immediately, the system may replace relatively expensive grid electricity and produce a strong return.

Now imagine another business with the same annual consumption but most of its usage occurs from 5pm to midnight. The same solar design may export far more energy. I would investigate a different system size and whether storage changes the result.

How I assess the project

  1. Discuss what the business wants to achieve.
  2. Review electricity bills and usage data.
  3. Understand operating hours and future changes.
  4. Assess the property and system constraints.
  5. Compare suitable solar and, where relevant, battery options.
  6. Model expected performance and financial outcomes.
  7. Prepare and explain the proposal.
  8. Revise it where appropriate before the customer decides.

The better question is not simply “How much does commercial solar cost?” It is “What energy solution gives this business the best practical and financial result?”

About the numbers

Solar and battery performance and savings are estimates that depend on the individual site, electricity use, tariffs, equipment, installation and assumptions used. Current incentives and network requirements should be checked for the specific project before a proposal is finalised.

Want to look at your actual situation?

You do not need to know the system size first. Start with your electricity use, existing system and what you want to achieve.

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