The monthly Electricity production of a Solar power system rises in proportion to installed capacity, leading to increased savings in your electricity bills. However, there is an upper limit for system capacity: once you start having surplus generation, the financial performance of a solar array starts to decrease, since exported electricity only earns you a reduced feed-in tariff. On the other hand, you get full savings from all the solar generation consumed on-site.

Note you can have surplus solar generation even if total kWh production is below your total consumption. This is because photovoltaic systems supply most of their output around noon, while building consumption is more evenly spread throughout the day. Keep in mind that households have their highest power demand after sunset, and there are businesses that operate at night or with a 24/7 schedule.

What Happens When Solar Power Capacity Reaches 100 kW?

Australia has two different incentive programs for solar power. In both cases, you get one certificate for every MWh (1,000 kWh) of electricity produced by your system.

• Small-Scale Technology Certificates (STC) apply for installations up to 100 kW.
• Large-Scale Generation Certificates (LGC) apply when capacity exceeds 100 kW.

These certificates are purchased by organisations subject to mandatory renewable energy targets, such as energy retailers. By law, they must obtain a minimum portion of their electricity from renewable sources, and purchasing STCs and LGCs from third parties counts towards their quota.

Considering the high electricity tariffs in Australia, solar power systems are already an excellent investment based on power bill savings alone. However, the additional income from selling STCs and LGCs makes the business case even better. Both types of certificates are priced based on market supply and demand, but there is an important difference between them:

• You can only claim and sell LGCs periodically, based on electricity that has already been produced by your solar power system.
• STCs can be claimed based on future electricity production. You can get an estimate of electricity production from your solar PV system by the year 2030, and the number of STCs in your favor is calculated based on that value.

The main benefit of claiming all your STCs upfront is subtracting all the corresponding capital from the upfront investment in solar power. Although the exact STC count changes based on project location, you can expect an incentive ranging from $600 to $700 per kilowatt of capacity. This represents a sizable benefit, considering that solar power systems in Australia typically cost less than $1,700/kW.

The Australian Clean Energy Regulator (CER) website has a section where you can input your solar PV system capacity and location (based on ZIP code), to get an estimate of how many STCs will be credited in your favor. Note there are technical requirements for your system to be eligible, so make sure they are not missed!

Typical Features of a 100-kW Solar Power System

A 100-kW solar power system is too large for households, unless the project is for a huge mansion, but many mid-sized business can benefit from a system of that capacity. To get an idea of how such a system looks like and how it performs financially, consider the following typical values:

• • Area Required: With modern solar panels, you can install around 160 watts per square metre. This means your installation will require between 600 and 700 square metres of rooftop area.
  • Number of Solar Panels: Individual modules are available in a wide range of capacities, but most range from 250W to 330W.  This means a 100-kW commercial solar system uses between 300 and 400 individual modules.
  • Number of Inverters: There are commercial-scale inverters that can handle over 100 modules each, which means this project will use 3 or 4 of them.

• Total Project Cost: Most solar PV systems now cost less than $1700/kW, which results in a total investment below $170,000. However, after subtracting the rebate from the STCs, the net cost will likely go under $100,000.

• Energy Generation and Power Bill Savings: The yearly generation of a 100-kW solar power system in Australia is likely to exceed 140,000 kWh. Assuming the company using the PV system pays 25 cents/kWh, this yields $35,000 in yearly savings, and the payback period is less than three years!

• Environmental Benefit: The Australian power system is still strongly dependant on coal, and many of these power plants produce emissions above 1 kg CO2 / kWh. Assuming your solar PV system displaces 140,000 kWh of coal-fired generation, over 140 tons of CO2 are being kept away from the atmosphere each year.

Companies with an electricity demand high enough to justify a 100-kW solar power installation consume above 160,000 kWh per year, which means they are subject to hefty capacity charges. In addition to paying for electricity consumed (kWh), they pay for their largest measured demand (kVA) over a 12-month rolling period. If a company manages to bring its net annual consumption below 160,000 kWh with a 100-kW solar power system, the capacity charge disappears after the first 12 months.

Final Recommendations

If you are considering a 100-kW solar power system for a company, you can get an excellent financial return. Just make sure you get an assessment of your electricity load first, to verify if it is large enough to justify 100 kW of solar generation capacity; perhaps you can get a better return on investment with a smaller installation.

Like with any solar power system, it is important to verify that your building has the right conditions for solar power. The roof must have a good structural condition, and ideally it should have a large area that is free from shadows.

Depending on the types of loads present in your building, energy storage may also be viable. For example, if you have a short-duration demand peak that is driving up your capacity charges, it can be trimmed with a battery array of the right capacity.

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