Path-Q Solar

How should a small business evaluate solar ROI when its electricity use varies by season?

Answer

A small business should evaluate solar using monthly or interval consumption, production, and tariff data rather than annual averages. Seasonal usage determines how much generation is self-consumed, exported, or subject to demand charges, which can materially change cash savings and payback.

Key points

  • Model each billing period, including seasonal energy prices, demand charges, and operating schedules.
  • Separate energy savings from demand-charge effects because solar may not reduce demand charges in the same way.
  • Include business growth, closures, occupancy changes, and production downtime in sensitivity cases.

What it depends on

  • Seasonal load profile and operating hours
  • Commercial tariff, demand charges, and export treatment
  • System production, roof constraints, and possible storage
  • Tax, financing, maintenance, and business ownership assumptions

Risks and trade-offs

  • A system can produce most energy when the business uses the least, reducing its value.
  • Demand savings may be uncertain if peaks do not coincide with solar production.
  • Business expansion or relocation can change the economics and ownership horizon.

Information you may need

  • At least twelve months of bills and interval data if available
  • Seasonal operating schedule and expected business changes
  • System proposal, financing, maintenance, and production assumptions

Your next step

What to do next

Build a monthly cash-flow model that separately calculates energy, demand, export, financing, and operating effects.

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SQ00730