In the back streets of St Albans there is bustling general store that’s powered by sunlight, great ideas and a passion for all things sustainable. We had a chat to the owner, Mick, who showed us how he’s used solar power, energy efficiency to cut costs and build the resilience of his business.
In small business, there must be thousands of things you could spend your money on – why did you choose to invest in energy efficiency and solar power?
We went down this track for two reasons. Firstly, I don’t believe ‘coal is good for humanity’ and I’m really keen to reduce our reliance on dirty energy.
The second reason is that electricity costs were a constant expense eating into our profits - regardless of how much money we’re making. It doesn’t matter if one person or a hundred people walk through the door – we still need to run our lighting, fridges for 14 hours a day. So halving our power costs is great for our business.
What other things have you done to cut costs?
We replaced all our old fluoro tubes with LED lighting, LEDs cost about 30% of the cost of a fluoro and bypass the requirement of ballast and a starter– I managed to buy 40 tubes for $700 so they paid for themselves in 7 months. I also upgraded our air-conditioning units with newer inverter type split systems – this is saving us 30% on cooling costs.
We don’t have a lot of standalone fridges or upright freezers in our shop – they are really inefficient because they produce a hell of a lot of heat inside shops which you then have to aircondition to remove. The uprights freezers can cost $300 a month to run because all the cold air drops out every time you open the door.
Instead of standalone fridges we installed an eight door cold vault rescued at a bargain price from an ex 7-11 store that went bankrupt. The compressor sits on the roof and it runs extremely efficiently – and it doesn’t generate heat inside the building. Our fridges are costing us nothing to run today because we’ve got solar panels and the sun is shining. We’ve probably got the coldest cool room in Geelong!
Because of all our energy efficiency work, we got our electricity costs down to $1000 a month or $1100 in summer. This is really good for a business of our size. Compared to other Australian businesses we are in the lowest 2% for electricity spending as percentage of our takings. So we were in a good position for the next big step of investing in solar panels, because our efficiency meant we didn’t need to buy a overly large system.
As an investment, how does your PV system stack up?
Our solar array has 40 panels that produce up to 110kwh/day. Our first bill shows that we are on target to cut our power bill by 50%, and with savings of $500 a month we will pay our system off in 2 years.
How did you get such a good deal on solar panels?
We used small business tax incentives introduced by the Abbott government. I’m extra happy about this because I don’t think they anticipated that small businesses would use the incentives to invest in solar.
Essentially, it meant that we got a $20,000 solar system for $12,000. You take off the 30% company tax rate off the cost, plus take off 10% GST. It’s a big system and we got it at a competitive price, so with savings of $500 a month we will pay our system off in 2 years, after that the $500 is profit that the Sun God’s given you.
Even if the payback was 3-4 years, it’s still a great business decision. Power prices are only going to go up. Businesses should really look at using the Tony Abbott break to put in a rooftop garden with power plants!
How did you find your solar installer?
I went through a broker. I rang Origin Energy and got some kid who told me I couldn’t have PV because my roof was sloping the wrong way. So I took my business elsewhere and got a broker who sent three installers to quote.
I chose Green Energy Options to design and install my system because they’re a locally based installer over in Torquay. I wanted to support someone local, rather than someone from Melbourne. Aaron and the team provided all the information I need to match a system to my budget and usage.
Why should the Geelong community support ethical local businesses?
People in Geelong should support their local small businesses. It keeps profits in our local economy, rather than siphoning it to shareholders outside our region.
Also, local businesses tend to support other local businesses so the benefits flow through our community. We always try to source our products locally where possible - we don’t buy our pies from interstate, for example. Without being ridiculous about it, we try to source everything we can within 50km. We also only employ people from our local community – we have a rule 10km because we want to reduce our footprint.
It’s a case of use it or lose it. Lots of small communities are losing local businesses – particularly post offices. So if you want the convenience of picking up your parcels in your local area you need to support these little shops. Same with little butcher shops, grocery shops – if we don’t support a diversity of small businesses they will disappear.
Green Energy Options gave us the stats on Mick's new system:
System size: 10.4kW system
Generation: Best day so far 78.4kWh/day
Panels: REC solar panels, previous photon test winner, good in high temps and low light, PID free and leader in low energy payback for solar PV (less than 1 year).
Inverters: Enphase microinverter system (the panels have their own inverter mounted under each panel). These microinverters have a number of benefits over traditional string inverters, improved safety, performance, reliability and flexibility - more here.
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