Investing in solar energy can be a great way for businesses to improve their finances, and it can also help the way they're viewed by potential customers, as well. If you haven't considered solar, now's the time to see what it can offer. Here are five of the biggest reasons for your business to invest in solar.
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The federal solar investment tax credit (ITC) significantly reduces the cost of solar installation. It's designed to deduct a percentage of the system's cost from federal taxes, that that can mean big savings. Many states also have tax saving programs for solar, too.
Over time, a business that uses solar can save a lot of money on its energy bills, Especially for large businesses or those that use a lot of power, solar can be a great way to reduce the impact of energy bills on the company's bottom line. If a lot of your company's potential profit is going to the power company's bill every month, solar might be right for your needs.
For businesses that need to keep running even if the power goes out, solar can be the right choice. You'll have far less dependence on the power grid when you have a solar system, so you can keep working though power outages and related issues.
If you want to improve the value of your business' real property you can do that with solar. Commercial properties that have solar installed have higher values when compared to similar properties without solar panels.
When your solar system makes more power than your business uses you can feed that power back to the grid. Utility companies buy this power, and that can mean a big savings off of any power you do need to use from time to time. It could even put money in your business' pocket.
There are some big reasons to consider solar for your business, and you can get a significant amount of value from it in most cases. Finding out if solar is right for your company is easy, and will give you the opportunity to advance your financial goals more easily, for a better long-term future.
Most commercial and industrial solar installations are substantially larger than a typical residential solar power system. For perspective, the average size of a residential solar panel system is around 10 kilowatts (kW), while a commercial solar energy system can be up to several megawatts (MW), depending on the electricity needs of your company.
Different from utility-scale solar, commercial solar power is &#;distributed generation,&#; which means we use the energy the system produces at or near the point of generation. Distributed generation projects, such as rooftop or ground-mounted residential solar, are usually connected to the local electric grid. This allows your business to take advantage of net metering, a policy that enables you to send unused electricity back to the grid in exchange for electricity bill credits (more on this below).
Here&#;s why so many businesses choose to install solar:
Note: These prices will vary depending on your business&#;s location, the equipment you select, and the type of system you install.
If you&#;re still concerned about how to pay for your business&#;s solar energy system after incentives, don&#;t worry. Most businesses don&#;t pay upfront for solar because there are many financing options available. You can finance your system with a solar loan or choose a third-party ownership arrangement like a lease or power purchase agreement (PPA), though you won&#;t be eligible for the direct benefit of tax incentives if you don&#;t own your system.
Contact us to discuss your requirements of what is a solar cell. Our experienced sales team can help you identify the options that best suit your needs.
Commercial solar provides a great return on investment. According to the U.S. Energy Information Administration (EIA), in , the average commercial building spent $650.04 on electricity (likely on par with most small-to-mid-sized-businesses). Over a year, this equates to $7,800 in operating expenses. Over 20 years, your business will spend about $156,010 on energy costs.
Based on the same EIA dataset, the average commercial property consumed about 69,540 kWh of electricity in . Let&#;s assume your business installs a solar panel system that offsets 90% of this electricity consumption. Let&#;s also assume that your system&#;s production ratio (the ratio of its estimated energy output over time, in kWh, relative to its actual size, in W) is 1.4 (it typically ranges between 1.1 and 1.7 in the U.S., depending on your location).
How big of a system does your business need? Plugging in our numbers from above, we get:
System size (in W) = Annual consumption (569,540 kWh) * system offset (0.9) / production ratio (1.4)
This gives us a system size of 44,704 W or about 45 kW. According to our table above, a 45 kW system costs about $39,150, including the ITC and five-year depreciation with MACRS.
Over 20 years, your business will save about $101,259 in electricity costs with solar:
20-year savings = 20-year electricity costs ($156,010) * system offset (0.9) - upfront solar energy system cost including incentives ($39,150)
Beyond the direct financial benefits, installing solar panels can also help your business protect itself against electricity price volatility and inflation. In many states, the price of electricity can fluctuate significantly due to demand, creating a headache for business owners who closely manage their cash flow. With solar, your business can lock in electricity prices and reduce reliance on the unpredictable electricity market, making it easier to budget and plan for the future.
When businesses contract with solar companies, workers in the local market complete the installations. Greater demand for solar projects increases the availability of high-quality, well-paying jobs. As of , there are over 250,000 solar jobs nationwide, which represents a 9% increase year-over-year.
Depending on the size and scope of your project, you could provide jobs for multiple crews of contractors for over a month at a time. In the future, these workers could become your customers.
Whether you&#;re looking to save on electricity bills or build a more sustainable brand, going solar is a great choice for many businesses. Unsure how to get started? EnergySage offers a concierge service for businesses to make installing a solar panel system simple. We&#;ll provide you with an initial solar benchmarking estimate to show how many solar panels you can fit on your property, how much electricity they&#;ll produce, and how much you can save with solar. When you&#;re ready, we&#;ll gather custom quotes from up to three vetted solar companies in your area and help you choose the best option for you.
A version of this post first appeared on Inc.com.
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