Solar energy is one of the most rewarding investment decisions for any business, as it helps them to save a fortune on power bills every month. This, in turn helps reduce operational expenses and improve the bottom line, thereby increasing profits and growth opportunities for the business overall. MYSUN clients who have gone solar in the past are examples and propagators of the various benefits of solar such as: power independence, tax savings in the form of Accelerated Depreciation and eco-friendliness.
However, as solar systems require a sizable investment, we at MYSUN receive a ton of questions from existing and prospective clients. With this blog, we hope to answer some of the most commonly asked solar questions by business leaders. So that if you are planning to go solar, you can make an informed decision and get started on your solar journey.
1. How much can your business save with solar?
Installing a solar system can help a business save up to 80% on power bills every month. That being said, the savings potential varies depending on various factors like power consumption, power tariffs, solar policies, solar irradiance, industry type, solar system type (on-grid, off-grid or hybrid) and solar system size of the business. You can know the estimated monthly, yearly and lifetime solar saving potential of your business by running the free MYSUN Solar Calculator.
Estimated Savings Report of an Industry in Noida with Average Monthly Power Bills of INR 10 Lacs,
as Projected by the MYSUN Solar Calculator
2. What is the optimum solar system size for your business?
The Optimum Solar System Size is the one which is capable of fulfilling all your power requirements. And it depends on factors such as your power consumption, your sanctioned load, and the solar irradiance of your region which depends on your total shadow-free area, location etc. Usually, the optimum solar system size is equal to your sanctioned load, but it can be less if you have low power requirements or high solar irradiance. Your Optimum Solar System Size also depends on the type of solar system that you are considering for your business.
The thing to note here is that while your optimum system size can be higher or lower than the sanctioned load, the actual size of a solar system that you can install has to be in accordance with the guidelines of your state’s solar policy. With our World Class in-house Engineering team, we ensure that the proposed system size to all our customers is optimum and best suited to their economic needs.
Estimated Solar System Size of a Commercial Business with Average Monthly Power Bill of
10 Lacs in Chennai as Recommended by the MYSUN Solar Calculator
3. How much will it cost to solarize your business?
The cost of Solarizing your business is influenced by the type and size of the solar system that you choose for your business. However, the cost of your solar system is almost a fraction when compared to how much your business will be saving on power bills with solar. For example, an industry based out of Mumbai with a monthly electricity bill of INR 10 Lakh per month, will need to pay approximately just 1.5 Crore for a solar system, in contrast to the massive lifetime savings that the industry will make with solar i.e INR 21.4 Crores.
4. What will be the break-even period of your Solar Investment?
The break-even period of your solar investment will depend on factors such as the cost of your solar system, the energy generated from the solar system, the energy being consumed, the type of solar system, the solar tariffs in your state, and other factors. But on average, it can be said that the payback period for a solar system is around 3~5 years. For example, as per the MYSUN Solar Calculator, a commercial unit in Punjab with an average monthly electricity bill of INR 10 lacs will achieve its solar break-even in around 2.5 years; with an estimated ROI of 62.2%.
5. Can your business pay for a solar system in monthly instalments?
Yes, your business can pay for solar in monthly instalments. With a pool of solar financing and loan solutions from MYSUN, businesses around the country have made their solar journey easy and affordable. With pioneering solutions such as the MYSUN Deferred Payment Agreement, your business will have to pay just 20~30% of the overall cost as down payment while your solar system pays for the rest.
6. Can your business run on solar energy without incurring any capital cost?
Yes, your business can use solar energy without actually paying for the installation of a solar system. There are two ways of going solar – CAPEX and OPEX. In CAPEX, your business installs and owns the solar system from which it consumes the solar energy. In this model, your business is responsible for the operation and maintenance cost of the solar system. In the OPEX model of buying solar, the solar system from which your business consumes electricity is installed and owned by an investor or a third party company. In this case, your business only pays for the units of energy that it consumes as per a Power Purchase Agreement.
7. Should your business go for CAPEX or OPEX model when buying Solar?
Buying solar under the CAPEX model might seem cost heavy at the beginning but it turns out to be more cost-effective in the longer run. The LCOE (Levelized Cost of Electricity, which is the cost/unit of electricity over 25 yr horizon) for solar under CAPEX is significantly lower than that under OPEX. There is also an added benefit of Accelerated Depreciation which comes with the ownership of the solar assets under CAPEX. The only challenge it presents – is the capital cost of going solar which can be easily deferred with solar financing from MYSUN.
Even if this difference in the cost of solar in CAPEX and OPEX is not taken into consideration, the fact that buying solar under OPEX requires signing up for a PPA (Power Purchase Agreement), OPEX becomes a challenge for a large number of businesses. This is because entering into a PPA requires a strong credit rating by many investors, and given that the majority of businesses in India belong to the SME/ MSME segment with poor credit ratings, stretched balance sheets and overdrawn working capital limits; OPEX seems practically not possible for many businesses in India.
8. How do you choose the best Solar Installer for your business?
Going solar is a long term commitment and therefore choosing the right solar partner is critical for any entity. And this starts with knowing the capabilities, track record, reputation, presence and offerings of the solar installer. You can learn more in detail about how to pick the right solar partner here.
9. Should your business opt for solar O&M?
Solar systems, just like any other technology, need regular operation and maintenance to deliver high-quality performance. An operation and maintenance package makes sure that your solar system is in the hands of experts. Moreover, with the latest technologies of O&M like remote monitoring, the impeccable performance of your solar system becomes more certain. Therefore, an O&M package definitely adds value to your solar journey.
10. What will your business lose by delaying the decision of going solar?
A lot! Just like time and tides wait for none, the opportunity to save waits for no one either. Think of it this way – if your business has the potential to save 5 Lakh rupees a month on power bills and you delay the decision to go solar by 3 years, that’s a loss of 180 Lakh right there. This money if saved could have helped increase profits, giving you more funds to expand your business and also would have increased your business’s overall financial stability. Not to mention the loss in tax benefits and goodwill that comes with the delay.
Solar is becoming a strategic business decision of top businesses around the globe. Therefore, whether to go solar or not should not be your question, but how to go solar and with whom? We hope answers to these ten questions might have given you clarity on how to start your solar journey. For any further information, do get in touch with MYSUN Solar Advisors on +91 8448380218 or [email protected] and we would be glad to help your business too, save Millions.