Investing in solar energy is a journey rather than a sprint. The investment can last for decades, influence your property value, directly impact your operations, and have immediate financial pay-off. Due to the significance of adopting solar energy, it is natural to have questions.
Getting accurate answers for your solar queries
Asking the right questions can make the decision-making process more manageable. It will help you understand the system that will work for your circumstance, which solar energy partner to use, how to negotiate and what you can anticipate for the future.
The wrong questions will not give you the insight you seek. If you base your decisions on inaccurate information, you can end up with your system breaking down, becoming hard to maintain, and far more expensive than you anticipated. So turn the following wrong questions into a more informative conversation with your solar energy partner by using the following guidelines.
How big is the solar system?
A solar energy solution isn’t similar to buying a commodity like fuel where one solution fits all. Purchasing a solar solution isn’t a one-size-fits-all endeavour; the size of the solar energy system is a function of factors that the solar provider can only consider after consultations and site visits.
Fit-for-purpose is something that SolarAfrica uses to differentiate itself. We size the system based on how much you USE, not how much we can produce. Many competitors just sell the biggest system they can.
When you talk to a solar energy partner, it is better to determine if the solution on offer fits your purpose and meets your business needs. Here are some questions you can ask about the systems on offer that will help you determine the best solar energy solution:
- What information was used to determine the proposed system size?
- Do you make use of Tier 1 equipment?
- What type of component or OEM warranties are included?
- Do you provide a workmanship warranty?
- Will I have the capacity to expand in the future?
- Who will be installing? If outsourced, what criteria was required to select the installation partner.
How soon can you install the solar system?
You want to get your solar project up and running ASAP; that’s understandable, but rushing the process won’t help. The quickest installation does not mean the best solution. If the solar energy provider can implement a solution quickly, you may face challenges (and hidden expenses) through the process. But that doesn’t mean you should be in the dark about the installation process; by all means, inform yourself. Try using the following line of questioning:
- What is the installation process?
- How long is the installation process, and what are the timelines?
- At which stages are the council, regulators and possibly Eskom involved? What should I expect from them?
- What happens if you don’t get the work done on time?
- What is my involvement in the SSEG process?
What is the cheapest solar solution that you have on offer?
Cheap isn’t always good; in fact, cheap usually means you will pay more later when something goes wrong. Yes, you should never overpay for anything, but if you treat solar energy systems as a commodity rather than a solution, you will be amiss. What you are looking for are financing options.
You will find multiple financial offers and payment structures that can unlock value for your business in the market. You will need the help of your solar solutions provider to weigh the costs, benefits and value creation of the financial aspect of your solar solution. For example, SolarAfrica provides a PPA financing solution that requires no capital expenditure on your part. Here’s how you can start the conversation about financing your solar solution when ownership isn’t an option for your business:
Solar PV tariff
What determining factors were used to get to the proposed solar PV tariff? Ask about the solar yield and consumption values – what will the system produce versus what I will consume?
Annual escalation rate
To estimate future costs accurately, you will also need to know what the annual escalation rate is that the solar energy provider uses.
No Take or Pay
Make sure to find out whether your PPA tariff has been based on a No Take or Pay premise where you only pay for the power you use.
Lifetime savings
Be sure to ask whether the proposed lifetime savings have been based on the same number of years as the agreement term, as this is often overlooked when comparing the financing costs vs. savings.
If owning a solar system is key for your business then it may be worth considering the following questions:
- Ask what assumptions were used to calculate the internal rate of return?
- Ask if the company provides options for you to switch to a financing option such as a PPA and from what year this would be applicable from?
- Find out if there are incentives available and how they can reduce or repay the cost of the system. The company can lead you to useful local and national government tax breaks, grants and loans that can help you offset expenses with all cash purchase options.
- An essential piece of information will be how long your panels will take to pay back their cost. The calculations will be dependent on how much electricity the panels generate each year, the average annual increase in costs on your energy bill, and if you have net metering.
- Don’t be afraid to negotiate for easier terms for purchasing their system. You can buy the system in a single payment or pay for it in instalments. For cash flow management purposes, you will need to know if there will be an increase in payments in the future.
- You will also need to understand how to re-evaluate your property after the installation. Your solar system is an asset that adds value to your property and will also need to be depreciated appropriately for accounting purposes.
Who are some of your customers?
You and your employees understand solar energy, but it may be something you have never engaged in. So knowing what to look for in a company may not be in your company’s skill set.
Your investment in solar energy is significant, and its function will be vital to your operations. So your enquiries should be along the lines of:
- How long has the company been in operation?
- What is the number of solar systems the company has installed?
- Ask for references that you can use for similar projects to give you insights into their workmanship, service, and effectiveness.
- Request to view their licences and insurance policies. A company with these on hand will never be shy to share them.
- Ask how much experience they have working with local utility regulations.
- Get information on whether the company uses subcontractors.
How can my employees remove and replace solar panels?
There is a desire by businesses to have as much control over their assets as possible, that includes the solar energy system. It’s natural to want independence from a solar partner; you don’t want your energy to rely on their performance. But it’s also vital that you understand that solar energy solutions are highly complex machines. If your employees make a mistake, then they can damage your solar modules. Damages not only cost you money to repair, but they also cost you energy production, which will affect your operations and bottom line.
You may perform simple tasks to maintain the solar panels, but you should never go beyond what the solar partner stipulates. Sticking within the parameters not only reduces the risk of damaging the equipment but also ensures your warranties remain valid. A more productive conversation with your solar partner regarding maintenance should go like this:
- When there is an issue, who do I contact, what is the standard communication protocol?
- What does the Operations & Maintenance agreement cover? Is preventative maintenance covered?
- What are the guarantees that come with your work?
- What happens if the solar panels are damaged after installation?
- What problems have your other clients experienced with this equipment, if any?
When do I get new solar panels?
After installation, the solar energy solution becomes part of your operations. You need to understand how it will fit into your plans, maintenance, and opportunities. Here is how you can ask questions about the future:
- Enquire about the electricity generation monitoring system.
- Have a clear understanding of what happens if the solar panels cannot produce as much energy as the company claims.
- Enquire if there are any time limits regarding selling electricity to the grid.
- The solar panels are now a part of your building, which has significance for your property value and maintenance.
- Speak to your installer about the possibility of future expansion.
Conclusion
It’s good to have questions, so feel free to enquire. Ask the right questions, and you will spark an informative conversation with your solar energy provider. Try SolarAfrica, and have a candid conversation about the solar solution that will work for you. With better insights from an honest conversation, you can make smarter decisions.
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Photo by Ivana Cajina on Unsplash
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