Commercial solar is often marketed with one headline:
"Reduce your electricity bill."
For a business considering investing tens or hundreds of thousands of dollars into solar, that isn't enough.
The real question is:
What return will the system generate on the capital invested?
For commercial solar projects between 100 kW and 1 MW, determining the answer requires much more than looking at annual electricity consumption.
A proper commercial solar feasibility assessment should examine when your business consumes electricity, what you pay for it, how much solar will be consumed on site, network constraints and the expected performance of the system over its operating life.
Here's how to evaluate it.
At its simplest:
Solar creates value when electricity generated on site replaces electricity you would otherwise purchase from the grid.
But every commercial site is different.
Two businesses consuming exactly the same number of kilowatt-hours each year can achieve completely different returns from the same solar system.
Why?
Because when the electricity is consumed matters.
A warehouse operating heavily between 7 am and 5 pm may consume a large percentage of its solar generation directly.
A facility with most of its electricity consumption occurring overnight may export much more solar to the grid.
Those systems can produce very different financial outcomes.
One of the first numbers we examine when modelling commercial solar is the self-consumption ratio.
This represents the percentage of solar electricity that can be used directly by the business rather than exported.
For example:
If a solar system produces 500,000 kWh annually and the business directly consumes 400,000 kWh:
Solar self-consumption = 80%.
That matters because electricity consumed behind the meter can avoid purchasing electricity from the grid.
Exported electricity may still have value, but its value can be materially different from avoided retail electricity costs.
The objective therefore isn't necessarily to install the maximum amount of solar physically possible.
It's to design the system around the site's energy economics.
A large roof does not automatically justify a large solar system.
Before designing a 100 kW, 500 kW or 1 MW installation, a commercial solar provider should analyse the site's electricity consumption data.
For many commercial customers this means analysing interval-meter data to understand:
daily consumption, weekday versus weekend demand, seasonal demand, daytime baseload, peak demand and periods of low consumption.
That creates a much clearer picture of how much solar the site can actually utilise.
A simplified annual benefit calculation can be expressed as:
Avoided grid electricity cost + export value + other applicable benefits = annual solar benefit
Then compare annual benefit against:
Net project investment after applicable incentives.
For example, assume a hypothetical business installs solar and generates:
600,000 kWh per year.
If 80% is consumed directly:
480,000 kWh is self-consumed.
The remaining:
120,000 kWh is exported.
If the business's effective avoided electricity cost were $0.20/kWh, the self-consumed energy alone would represent:
480,000 × $0.20 = $96,000 per year
in avoided electricity purchases before considering export value and other factors.
This is an illustrative calculation only. Actual tariff structures, energy rates, network charges and solar production need to be modelled for the individual site.
Commercial solar proposals often focus heavily on simple payback.
If a system costs $300,000 after incentives and produces $75,000 of first-year benefit:
Simple payback = approximately four years.
Useful?
Yes.
Complete?
No.
A serious investment assessment can also consider:
For larger commercial projects, solar should be evaluated as a capital investment, not simply as an equipment purchase.
There is no universal answer.
A 100 kW system may be appropriate for one business.
Another may justify 300 kW.
Another may economically utilise 1 MW.
System sizing should consider:
Current electricity demand — particularly daylight consumption.
Future demand — including expansion, machinery and additional operating shifts.
Electrification — such as replacing gas equipment with electrical alternatives.
EV charging — which may materially increase future electricity demand.
Battery storage — which can change how excess daytime generation is utilised.
Network constraints — particularly allowable export capacity.
Available installation area — including roof condition and structural capacity.
This question has become particularly relevant because the Australian Government announced an expansion of the Small-scale Renewable Energy Scheme.
The government intends for eligible solar PV systems above 100 kW and up to 1 MW installed from 1 October 2026 to become eligible for STCs, subject to regulations being in place.
That means businesses evaluating larger systems should reconsider the economics using the new incentive framework once final eligibility requirements are confirmed.
For some projects that previously sat just outside an acceptable investment threshold, the new incentive may materially change the business case.
Not automatically.
Commercial batteries should be modelled independently rather than added to every solar project.
A battery may improve the overall energy strategy where a business has:
high peak-demand costs, excess daytime solar, significant evening consumption, volatile loads, resilience requirements or suitable energy-market opportunities.
For NSW businesses, this is especially relevant because BESS5 commences on 1 September 2026, introducing a new incentive for eligible commercial and industrial battery installations.
Commercial solar tends to become particularly compelling when a business has:
large daytime electricity consumption, substantial usable roof area, relatively predictable operations and a long-term presence at the site.
Warehouses, manufacturing facilities, food processing plants, logistics facilities, agricultural operations, cold storage and many other commercial properties can fit this profile.
But the investment decision should still come from data.
Ask:
What solar system produces the strongest financial outcome for this site?
Those are very different questions.
At Ador Energy, our approach to commercial solar is to begin with the site's electricity consumption and operational requirements and then work backwards into system design.
That allows the business case to drive the engineering rather than the other way around.
For businesses considering 100 kW to 1 MW commercial solar, Ador Energy can assess your electricity consumption, available site area and project requirements to model an appropriate system.
The objective is simple:
Determine whether the numbers make sense before you invest.
Speak with Ador Energy about a commercial solar feasibility and ROI assessment.