Commercial Solar ROI in Australia: A Smart Business Investment
In today’s competitive landscape, every dollar counts, and Australian business leaders increasingly recognise the remarkable Return on Investment (ROI) that commercial solar offers. With rising energy costs, attractive government incentives, and a global shift towards sustainable practices, investing in solar is no longer just an environmental statement—it’s a financial masterstroke.
What Makes Commercial Solar a High-ROI Asset for Australian Businesses?
1. Immediate Energy Cost Savings
Australia’s soaring electricity prices have become a significant burden for businesses. By switching to solar, companies can offset a large portion of their energy consumption with clean, renewable power generated on-site. This translates into immediate and long-term savings on utility bills.
- Example: A mid-sized manufacturing facility can save up to 60% on annual energy costs with solar integration.
2. Government Incentives and Rebates
Australia uses among the most helpful structures for solar adoption with programs like Small-Scale Technology Certificates (STCs) and Large Generation Certifications (LGCs). These incentives significantly reduced the time to get returns on the expense of solar installation; certain companies achieve a much faster payback duration.
- Tax Benefits: Solar systems often qualify for accelerated depreciation under Australia’s instant asset write-off scheme, further improving your ROI.
3. Energy Independence and Stability
By generating your own electricity, your business is no longer vulnerable to fluctuating energy rates or power outages. This level of energy independence ensures predictable operational costs and uninterrupted productivity—critical for scaling a business in today’s uncertain market.
4. Increased Asset Value
Solar systems add value to your business premises. Whether you own a warehouse, office, or factory, a solar-powered property is more attractive to tenants or buyers, enhancing resale or lease potential.
ROI Numbers: What Can You Expect?
The formula to calculate ROI- Return on Investment for commercial solar systems is:
ROI (%) = (Net Profit / Total Investment) × 100
Where:
- Net Profit = Total Savings or Revenue Generated from Solar – Total Investment Cost
- Total Investment = The total cost of installing the solar system (including equipment, installation, and any associated costs).
Breakdown for Commercial Solar:
1. Net Profit:
- Total Savings: Annual electricity cost savings + government rebates and incentives.
- Additional Revenue (if applicable): Revenue from selling excess energy back to the grid (via feed-in tariffs).
- Subtract the Total Investment from these savings to calculate the net profit.
2. Total Investment:
- Includes the cost of panels, inverters, installation, permits, and any maintenance contracts or upgrades required.
Example: ROI Calculation
Let’s say a business in Australia:
- Spends $50,000 on a 50kW solar system.
- Saves $15,000 annually on electricity bills.
- Receives $5,000 in government rebates.
- Total Investment: $50,000 (initial system cost).
- Net Profit After 1 Year: Savings ($15,000) + Rebates ($5,000) = $20,000.
- ROI for Year 1: ROI = ($20,000 / $50,000) × 100 = 40%.
Payback Period
You can also determine how long it will take to recover your initial investment:
Payback Period (Years) = Total Investment / Annual Savings
Using the example above:
Payback Period = $50,000 / $15,000 = 3.33 years.
Are there still rebates available?
Yes. There are still generous rebates towards the cost of commercial and residential systems. The Federal government covers as much as $50,000 of the cost of your system through the national rebate scheme.
How Much Can You Expect to Save with Commercial Solar in Australia?
Your potential savings with commercial solar depend largely on your energy usage and the size of the solar system you install. Here’s a breakdown of typical savings and ROI for different usage levels, assuming a tariff of 22c/kWh (including GST), full self-consumption of generated energy, and stable electricity prices:
| Your usage | System size | Expected savings p.a.* | Return on Investment |
|---|---|---|---|
| Small user ($900-$1,500/qtr) | 10kW system | $3,200 | 3-4 years |
| Medium user ($1,500-$3,000/qtr) | 20kW system | $6,400 | 3-4 years |
| Large user ($3,000-$5,000/qtr) | 50kW system | $16,000 | 3 years |
| Extra large user ($5,000-$10,000/qtr) | 99kW system | $31,000 | 3 years |
Key Assumptions:
- Tariff: Savings are based on an electricity tariff of 22c/kWh, including GST.
- Self-Consumption: Assumes your business consumes 100% of the solar energy produced, maximising savings.
- Stable Electricity Prices: Assumes electricity prices remain stable over the lifetime of the solar system.
Do I get paid for the electricity my system produces?
Yes. You get paid for any surplus power that your system produces, between 6-11c/kWh, depending on which energy provider you’re with. What makes the most sense is to use the bulk of your free solar power during the day, and feed very little back to the grid.
How System Size Impacts Savings
Smaller Systems (10kW): Ideal for small businesses with moderate energy usage, such as offices or retail stores.
Medium Systems (20kW): Suited for mid-sized businesses like cafes, gyms, or small manufacturing units.
Larger Systems (50kW–99kW): Perfect for energy-intensive industries like manufacturing, logistics, or warehouses.
Additional Benefits:
Future-Proofing Your Business: As energy prices continue to rise in Australia, solar becomes an even more valuable asset.
Scalable Savings: Larger systems deliver exponentially higher savings, making them a strong choice for growing businesses.
By tailoring your solar system to your energy needs, you can ensure maximum savings and a rapid return on investment. For personalised calculations, a professional solar consultation can help determine the best system size for your business.
This calculation ensures businesses can confidently assess the financial impact and benefits of going solar.
Commercial solar systems in Australia typically deliver:
Payback periods of 3–5 years.
Returns exceeding 20% annually—outperforming many traditional investments.
Savings exceeding $50,000 annually for larger installations.
Why Now is the Time to Act
- Solar Rebates Are Phasing Out: As solar installation grows, government incentives are reduced. Acting now ensures you take full advantage of the financial support available.
- Electricity Costs Continue to Rise: Waiting only increases your operational expenses while delaying your access to savings.
Case Study: Australian Business Success
A logistics company in Sydney installed a 100kW commercial solar system, reducing their energy costs by $45,000 annually. Within four years, they achieved complete ROI and continued to save over $500,000 across the system’s 25-year lifespan.
The Intangible ROI: Sustainability and Branding
Along with economic advantages, changing to solar boosts your brand’s online reputation. With growing consumer demand for sustainable practices, your financial investment positions your organisation as an ecologically accountable leader, enhancing partnerships with consumers, companions, and stakeholders.
Take the First Step Towards Superior ROI
Whether you’re a manager, director, or business owner, the numbers don’t lie—commercial solar in Australia is a high-ROI solution that pays for itself while empowering your business to thrive sustainably. Start your journey today and turn your roof into a profit-generating asset!
