In this article, we’ll walk you through the main points to consider in answering the question of what size solar PV system you should install. Getting at least an approximate idea of system size is the first of four questions that you need to consider to complete a project, the next three being:
Factors to consider in system sizing
We break system sizing down into four key factors:
- What size system is appropriate based on your energy consumption?
- How much solar can your site accommodate based on the available roof area and electrical infrastructure?
- How much are you willing or able to invest?
- What is your return on investment vs payback expectation?
There are some interdependencies in the first two so we’ll work through them in reverse order.
Return on investment vs Payback Priority
As a rule of thumb, based on current PV system prices and electricity prices, most commercial PV systems will generate attractive returns on investment which comfortably exceed the cost of capital and meet capital investment hurdles for most business. The big-picture question of whether it makes sense to install solar is generally a straight forward, yes.
At a more detailed level, within the limits of sizing a system to ensure the majority of energy is still consumed onsite, larger systems with higher capital value will generally generate higher total returns, whereas smaller systems will pay themselves off faster but generate a smaller total return on investment over the life of the system.
From a financial perspective, you’ll need to consider if your focus is fast payback with short term return or a more patient focus on larger returns over the longer term.
Important Note: The return on investment of a solar PV system which has a 20-year life is inherently dependent on events over its lifespan. There are numerous factors that might impact that actual return on investment achieved that should be considered, including changes in wholesale power prices (up or down), FiT offers from electricity retailers & tariff structure changes which impact the value of exported power, level of energy consumption and ongoing ownership or occupation of the site that it’s installed at.
Decide how much are you willing to invest?
As a very rough guide, in mid-2019, a reasonable starting point for a small-scale (<100kW) commercial solar is $1/Watt (or $1,000/kW) plus or minus 20%. A 100kW system is likely to cost in the order of $80,000 to $120,000 installed.
There are many factors that will impact the cost of individual systems, some of the key ones are:
- Installation complexity – is it one large system vs a series of smaller systems? are the roofs relatively flat or steep? will panels be flush mounted or tilted?
- Roof access – how high up is the system? how will panels be transported onto the roof, how easy is the roof to access?
- Electrical infrastructure – will any upgrades be required to existing electrical cabling or switchboards? is there space in existing switchboard to add required circuit breakers?
- Structural analysis – is there good documentation available for the building or will new structural analysis of roofs be required?
- Roof safety requirements – are there existing walkways and static lines on the roof or does new roof safety infrastructure need to be installed.
- Equipment quality and efficiency – are high-efficiency panels or solar optimisers required or will good quality ‘standard components’ suffice?
Understand how much your site can accommodate?
With a basic handle on system costs and confidence that you’ll be able to get a good return on your investment you next need to get an understanding of how much solar might be able to fit on your buildings.
There two primary site constraints that you need to consider:
- suitable rooftop space, and
- the capacity of your electrical infrastructure.
Suitable rooftop space
Google maps will quickly help you identify your available rooftop areas on your site. Having identified them you need to consider constraints on which ones will be suitable for installing solar. A high-level list of things to consider includes:
- The slope/inclination of the roof: Flat or low angle roofs can generally have solar installed regardless of their orientation (north, south, east, west). As the angle of inclination increases, the solar output will become increasingly sensitive to your roofs orientation Panels facing East and west are fine – but are better if tilt is limited to about 10-15 degrees. Whereas the optimal tilt on a north-facing system (for maximising energy production year-round) is an angle equivalent to your cities latitude. Note that very steep roofs above 30 degrees, for example, may also create challenges for installation and maintenance.
- The strength of the roof: On small buildings, this is less commonly an issue but on larger roofs with big spans or cantilevered sections, the structural capacity of the roof to support the weight of the solar panels needs to be checked and adequate setbacks from the roofs edges and corners need to be factored in.
- Shading: Any shading of the roof will reduce the output of the solar panels. Partial shading can most often be tolerated whilst still generating an acceptable level of power output and financial return.
- Visibility: Some property owners may have a preference for ensuring that panels can or cannot be seen. Make sure you understand any preference in this regard.
The size of your proposed system will determine what size switchboard you will need to connect to. Often inverters will be directly connected via the main switchboard, but sometimes a rooftop or mezzanine level mechanical services board can be used to more easily reticulate cables to the main point of connection.
System size relative to consumption
The last point we’ll look at in system sizing is the amount of energy which is generated relative to your consumption.
Three factors must be considered in sizing the system relative to consumption:
- The impact of the percentage of energy which is consumed versus exported on the financial return.
- The value of any exported energy in the form of feed-in tariffs, LGCs.
- Export limits that might be applied by the grid or network operator
Calculate a system size that matches your consumption
The energy consumption on the site you’re considering installing solar (made up of the sum of the energy demand of all individual power consuming devices – lighting, heating and cooling, computers, machinery etc) will form trends or patterns. These patterns might vary on seasonal, weekday vs weekend, or other business operation based trends. You can identify these trends and the underlying typical daytime loads by plotting them on a time series graph.
All the data needed to plot these patterns is available from your electricity retailer via standard digital electricity meters which are commonly installed in commercial sites (or can be upgraded to at a minimal cost if not).
Against these, we can overlay predicted solar generation for different system sizes taking into account the system size, panel inclination and orientation, shading and so far.
From here we can gauge the expected levels of self-consumption vs export both at specific times of the year and on average across the whole year. These calculations can then be used to inform return on investment as well as peak generation and export figures for network checks.
As all solar systems produce energy at the same time (during the day when the sun is out), if numerous large PV systems are installed in an area with little consumption, or a very high percentage of residents or businesses install solar, it’s possible that the amount of energy generated creates network constraints which in turn create costs.
As a result, in some cases, local electricity networks might apply limits on how much solar energy a system can export. How much a solar system exports is the difference between how much is generated and how much is used at any given time.
Export impact on financial return
As a general rule, the more energy which your solar system produces that is directly consumed on-site, the greater the value the energy will be to you or the greater the savings. So whilst larger systems will still often generate a greater total return on investment, they might do so at a slower rate.
System sizing summary
To summarise our high-level analysis, to get a basic view on system sizing:
- Get an understanding of existing energy consumption and time of day profile
- Understand any export limits that might apply
- Check capacity of the electrical infrastructure on the site and individual buildings
- Check the available rooftop areas for solar PV panel placement
- Understand your priorities for return on investment vs payback
- Check your budget based on a simple system cost estimate using $/Watt pricing.
Rolling all of this together you can form a view on what size PV system you should install.
Next step – consider where this system will be installed.