Commercial Property owners have come under pressure in recent years with their return on investments dropping significantly. Over the last 5 years, the cost of photovoltaics have dropped by almost 50% and bringing photovoltaics as a generation option very close to grid-parity. Grid parity relates to the cost of self-generation amortised over a reasonable period being cheaper than buying electricity from the utility provider (Eskom)
There are several circumstances where a photovoltaic installation would make sense on a property. The return of investments may vary from site to site, however the 3 primary areas of opportunity are as follows:
- Owner tennanted building where a manufacturer facility operates. In this type of environment one could attract a renewable benefit from Dti, which would pay anything from 30% to 50% of the capital costs after which the assests can be depreciated at an accelerated rate.
- Tenanted properties where the predominent activity is retail operating 7 days a week. In this environemt the ability to match consumption and generation is much easier because there’s little risk of spilling into the grid as you consume during the time that you generate.
- Tennented commercial buildings where the landlord is responsible for billing the individual tennat for electricity. In this type of environment it makes commercial sense for the landlord to invest in photovoltaics and generate his own electricity as opposed to buying from the utility provider, i.e. Eskom.
Factors to Consider
- The location of your PV embedded generator will determine the amount of solar resource available. The larger the amount of solar resource available the better the ROI.
- Roof type, roof space, orientation & inclination
- Different roof types require different mounting systems for a PV array; this will affect the initial capital layout. It is wise to use roof space which is optimally inclined and orientated to achieve maximum yield.
- Roof space orientated off the optimal angle may influence the yield up to 50% or more.
- The inclination of the roof space plays a seasonal effect on the yield and may effect the choice of mounting structure used. All of this influencing the ROI.
- Municipal regulations with regard to embedded generation & electricity costs
- The current and future cost of conventional electricity will influence the ROI. As the price increased the ROI decreases making it more economically viable annually.
- System Operation and Monitoring
- PV systems are designed to operate without much human interaction and comprise of little to no mechanical parts. This maintains low operation costs.
- Most systems come with a standard monitoring system which may be used to keep track of your yields and system performance.
- Monitoring systems are vastly used overseas to keep track on investors systems, sending automated messages to service engineers when a part fails or a system is not yielding what is expected.