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However, as commercial as well as residential solar systems require a sizable investment, we at YOUR ENERGY receive a ton of questions from existing and prospective clients about various aspects of going solar. With this article, 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 as soon as possible and have a upper edge over your competitors.

1. What is the financial benefit for a business to go solar?

Installing a solar system can help a business save up to 90% on electricity bills every month. That being said, the savings potential varies depending on various factors like power consumption , power tariffs, solar policies of the respective state, solar irradiance, industry type, solar system type (on-grid, off-grid, hybrid) and solar system size of the business. The solar system has to become a necessity in today’s world as not only it helps in reducing Co2 emission but also helps in reducing the electricity bills.

2. What size of solar system suits your business?

The Optimum size of Solar System is the one which is capable of fulfilling all your power requirements and making you energy independent of the grid. 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. which in turn helps to calculate the total savings you are going to get from the solar system. 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 power plant Size also depends on the type of solar system that you are considering for your business i.e. the are you looking for a battery backed solar system or a grid-tied solar system.

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.

3. What a solar system will cost your business?

The price you are going to pay to Solarize 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 Agra 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. How much time it will take to break-even 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, a commercial unit in Agra 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. Is financing of solar system available for businesses?

Yes, your business can pay for solar in monthly instalments. With almost all the banks keeping solar financing in the priority sector lending, businesses around the country have made their solar journey easy and affordable. With pioneering solutions such as the lower interest of solar financing, 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. Does your business run on solar power without incurring any capital cost?

Yes, your business can use solar energy / solar power without actually paying for the installation of a solar power plant. There are two ways of going solar – CAPEX and OPEX / RESCO. In CAPEX, your business installs and owns the solar power plant from which it consumes the solar energy. In this model, your business is responsible for the operation and maintenance cost of the solar system and also owns the system which have its own benefits of accelerated depreciation etc.. 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. But this is not as wise decision as it seems to be because it restrains businesses from other benefits of the solar power plant.

7. Which Solar model your business should go CAPEX or OPEX model when buying Solar?

Buying solar under the CAPEX model might seem a costly affair 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 various banks who are giving solar financing a priority.

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 and installation of solar power plant 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. Also you need to check the specifications and the make of the solar power plant. 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 power plant, 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. The washing of the solar panels is also a cumbersome task but one has to regularly do the same to get maximum return out of the solar power plant 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 life doesn’t wait for anybody, so is the case with your savings due to energy saved by the solar power. Think of it this way – if your business has the potential to save 7 Lakh rupees a month on power bills and you delay the decision to go solar by 3 years, that’s a loss of 252 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. Always the money saved is money earned.