Solar Sizing: Don’t pay more for what you don’t need!
Solar systems are often sold on how much ‘free’ energy they will provide. However, over-capitalisation of systems may mean you have to wait for many years before the system is paid off and the energy becomes ‘free'. On top of this, ongoing costs are incurred to support regular monitoring and maintenance of the system to ensure it is performing as expected.
So, what does this mean for solar systems? Are they all that they are hyped up to be?
Generally speaking, yes, solar systems are a good thing (when they are correctly sized!).
As a rule of thumb, if your site can utilise above 75% of all solar energy produced, it is adequately sized for the sites requirements. If usage is seasonal, this figure may be lower when averaged over the year. In this case, you would have to decide if you would want to size for the higher consumption periods or the overall average consumption. There are many financial metrics that can assist in deciding what solar size is best for your business.
An example of the difference in payback for different solar sizes at a sample site is shown below:
There are several reasons why over-capitalisation of a solar system should be avoided.
As demonstrated in the example above, as the system size increases beyond the needs of the site, the site usage offset decreases and more energy is fed into the grid.
The payback period stretches out for systems when the percentage of energy feed-in to the grid increases. This is because the feed-in rate in typically significantly lower than the offset consumption rate. For example, in regional Queensland alone there is a $0.19* difference per kilowatt-hour between Ergon Tariff 20 and the Feed-In tariff rate (as at time of writing this blog). This difference is generally seen within most Australian energy retailers.
Depending on the location and size of a system, zero export restrictions may also be applied. This can occur for systems sized over 30 kW (in certain areas) and may result in the inverter shutting down if exporting occurs. This means not only do you loss any feed-in tariff benefits, you also may have the inverter periodically shutting down whenever the export limit is breached! If the system is over sized this may frequently occur, resulting in lower energy offsets and more wear on the inverter.
In some cases, a larger system may be built to meet a site specific need. However, as a general rule, systems should be sized to offset an average of 75% or more of energy consumption on-site.
We recommend using smart metering or available 30-minute meter data prior to installing any solar on site to ensure you are not being sold too much solar.
Incorrectly sized solar will end up costing you more!
If you need independent advice around solar we can assist in providing technical oversight / due diligence.
Written by Kim - Engineer at Websters Group