Fast-forward nine months, and the number of businesses turning to solar and battery storage has multiplied.1 In fact, new research shows many are looking for the best path to build a business case or size up the return on investment (ROI).
Rising energy costs are one factor putting renewables generation in the spotlight, particularly for power-intensive industries. This was echoed in research earlier this year, where most businesses had longer-term ambitions to switch to renewables to reduce power costs and carbon emissions.2
Now, many businesses may be advancing their plans faster than expected. The majority have a view on how they'd build their business case and get the information they need to take it forward.
Grant Cairns, Executive General Manager Business Lending at CommBank, said that rising operating costs are prompting some businesses to fast-track plans to capture efficiencies and the positive impact of solar generation and battery storage.
"We know businesses want to understand the potential return on investment before investing in solar, and that's very important to establish before proceeding with an investment. With a jump in businesses locking away funding for adoption in the next 12 months, it indicates more are clearing that hurdle."
"Many businesses are doing their homework and figuring out how to get their hands on information to model the economics of solar installation. This suggests businesses are savvier than they were a year ago, and that more projects could advance if the case stacks up."
View on building and funding the business case
Businesses know there is a cost involved in developing the business case or ROI model for solar or battery storage. However, they have differing views on the preferred source of information and if they should be the ones that pay for it.
It's not surprising that the highest-rated method for receiving information is via the solar or battery installer or power provider. When combined across rooftop solar and battery storage, 25.8% prefer this option1. Far fewer (5.8%) would choose a detailed assessment from an independent consultant1.
Just over one in five want the costs of preparing the business case included in a finance or leasing arrangement for the solar or battery equipment that's being installed1.
Some businesses would prefer not to pay for a business case to be created but remain open to the available options. Almost one in four expressed this view when it comes to rooftop solar, and 15% for battery storage1.
"Businesses are signalling that they need help from expert partners developing the business case or modelling the payback horizons and, in many cases, are comfortable that there's a related cost," Cairns said.
"From the research we can see they are also saying that establishing the business case shouldn't be a standalone activity, but better integrated into the broader project delivery steps. This could be where installers are engaged earlier to jointly agree that a project is viable."
"The other option is to have the cost absorbed as part of financing and leasing packages. Given that sustainable energy assets can attract more competitive equipment financing packages, there may be a desire to ensure those benefits extend to all costs associated with the project," Cairns said.
Tips for getting your business case moving
As more businesses plan their solar initiatives, there are a range of considerations that can act as a good starting point. Some of these include:
Baseline your current energy costs: Gather data on seasonal power costs and whether they are increasing. Comparing wholesale energy plans can also provide more market intel as you weigh up your options.
Conduct multiple consultations: when arranging consultations to assess your suitability and site for solar, ensure you organise more than one. That way, you can compare aspects like installation costs and get different opinions on payback horizons.
Engage your existing suppliers: it's worth enquiring with your existing energy provider to see if they offer a consultation about solar and battery storage benefits. They already know your energy usage profile, and some may offer it free of charge.
Look to the future: Considering future energy needs is as important as existing usage. For example, if you plan to transition to electric vehicles and have on-site charging, how might that factor into the energy costs and business case?
Seek competitive financing: when considering funding costs as part of a business case, look for lenders that provide incentives or lower rates for sustainable equipment.
