With the recent spate of ESKOM load shedding, the Solar PV industry is again abuzz with excitement, as Schools seek a solutions to mitigate the constant electricity disruption.
In truth, Solar PV electricity has for many years been financially viable, where many schools have already invested or going through the process of “going solar”.
The main reason for Going Solar should not be because of load shedding, more the result of a strategic decision by the School’s Administrators and SGB to reduce long-term electricity costs, together with the equally important environmental CO2 considerations.
Suntricity provides this complete Solar Service to Schools with a selection of qualified Partners (both Technical and Financial), allowing schools to significantly reduce cost over a 25-year period, with no up-front capital investments to the school, which is repaid over a period of time…up to 10-years.
The decision is therefore no longer financial and more strategic. Indeed the choice of which solar installer to choose from is probably the most important decision the Administrators and SGB will need to take, and which must be based on industry criteria.
Suntricity has created the following guidelines, to enable so that an informed decision can be taken to minimise the risks of this long-term investment. We encourage all schools to at least be aware of these important steps.
- Track Record and Size of Installer - The companies providing quotations and solar solutions for the school, should be similar size, track record and positive financial balance sheet. We strongly recommend that these companies be a minimum of 5 to 7 years. The investment in Solar is a 25-year investment and the longer the chosen company has been established, the more chance there is that they will be able to accompany the full life of the system. It is easy for companies to make promises but much harder to keep. The relevant track record and company history should be considered a very important criteria.
- References - It is important that the SGB visit similar scale installations that the installer has previously carried out. Ideally, visit other schools that already has Solar PV. However, as only a small number of schools have to date installed Solar PV, visit similar size installations (25KW to 50KW) and request references from the Client.
- Technology - The technology utilised extensively throughout the world and where most solar production data is available is the Polycrystalline Panels. Whilst there are other credible technologies available and that could indeed be considered, we would prefer to eliminate any risk for this long-term investment and where manufacturers are able to guarantee the 25-years useful life of the Solar Panel. We therefore recommend Polycrystalline Panels.
- Quality - Equipment (Solar Panels, inverters and installation) must be what is known as “Tier One”, meaning the best quality from which long-term guarantees can be provided.
- Guarantees - The installer must carefully define what is being guarantee, in order for the school to mitigate any risks over the 25-year period.
- Price - Although very important as an initial consideration, we are of the opinion that all the criterion defined above, carry greater importance on the final decision by the SGB. This long-term decision cannot be determined by price alone, unless all proposals are understood to be providing the same equally qualitative product and service, installed by equally competent companies.
- Finance - There are basically two options to chose from:
- Outright Purchase: Where schools have available finance to support the initial system cost, the principle advantage being repayment on investment of between 3 and 5 years. In this event, the long-term maintenance agreement will become crucial.
- Financed by Installer: Installers generally have a financial model which includes up to 100% finance, where the present 12% interest rate is common and the repayment can be up to 10 years. The installer will therefore propose monthly payments where a cost model of electricity generated by the solar system repays the investment over a period of years.
- Because of the high interest rate, it would be beneficial (and if possible) for schools to fund an initial 10% and 25% of the initial cost, therefore minimising interest charges.
- Some installers offer a rental option, where the cost of electricity generated by the solar system is charged at a kWh tariff and where the school can at a future date, opt to purchase the complete solar system. This option could be interesting for schools where SGB’s have a limited mandate and at any given time, future SGB’s may which to buy the system outright.
The above outline recommendations are by no means exhaustive and many additional considerations will be further discussed with the individual Solar Installer.
We however sincerely trust that these guidelines is of assistance to schools considering installing a Solar Photovoltaic (PV) System, which we consider one of the best long-term investments possible.