Residential solar systems are becoming more and more popular. With improvements in technology reducing costs to homeowners and benefits from government programs available to reward those choosing to “go green,” there are many rewards for choosing solar in the suburbs. But what about the potential of solar systems for those in the commercial sector? Whether you make the choice to go solar for environmental reasons, or financial incentives, there are many business benefits that exist for businesses that install solar energy. Much of these perks focus on what a company will get, but many benefits also exist in terms of what the company will be able to give back as well.
In terms of price per unit for energy, conventional sources including coal, and petroleum products are very expensive for the amount of energy they produce. Solar energy is different. With solar energy, the price per unit is much, much lower than other energy sources. We can get into the factors that go into these cost differences at another time.
Another benefit of solar is its lack of volatility. Electricity prices are difficult to predict for any given time frame and can change quickly and significantly due to the various energy sources and complications that can arise. Solar works to remove companies from this liability. With a solar solution, companies can exist outside this unpredictable system and insulate themselves from outside liabilities. Thus maintaining regular operational costs as they relate to energy consumption.
So what does it take to get on the path to energy independence for your business? Let’s start with the money. While solar systems and commercial solar systems, in particular, are becoming more affordable, there is still an upfront cost, whether that is paid in cash of financed. However, this upfront cost brings with it a ton of benefits in terms of ROI. Solar panels are a long term investment able to generate a return almost immediately. Commercial solar panels have an extremely long lifespan and require little to no maintenance after initial installation. Choosing a commercial solar solution is almost like pre-paying the power bill for up to 30 years or more, except the break-even point (the point at which your energy cost savings equals the investment cost of the solar energy system) is much earlier (potentially less than one-third of the system’s life expectancy). That extra 20-plus years of energy cost savings can lead to an impressive long-term ROI. As long as the sun is shining, power will be generated…and you can own it.
In addition to the internal financial benefits of installing a photovoltaic energy system, many government incentives exist as well. Federal and state governments offer a wide variety of incentives to businesses choosing to install solar panels. Learning about, and taking advantage of these programs can dramatically reduce the initial costs involved in switching to solar. While the U.S. has largely been toward the back of the pack of nations incentivizing solar, in recent years this has begun to change.
From a strictly federal standpoint, the U.S. currently offers several major incentives. The 30% Solar Investment Tax Credit is extended for commercial projects that begin construction before the end of 2019. This credit is scheduled to decrease to 26% in 2020, and 22% in 2021 for projects beginning in those years respectively. Projects under construction must be active by December 31, 2023 to qualify for these credits. Beginning sooner rather than later offers businesses the chance to maximize their solar savings.
The federal Modified Accelerated Cost-Recovery System (MACRS) allows owners of solar systems to deduct any solar investment on an accelerated five-year schedule. This also ties into the Solar Investment Tax Credit by offering a bonus depreciation extension for solar systems entering service through 2019. Additional federal benefits that may be available include the USDA Rural Energy Grant Program and the New Markets Tax Credit Program. Overall, the net effective cost of transitioning to a solar system can be reduced by more than 60% through effective utilization of these programs.
From a PR standpoint, “going green” with solar technology offers even more benefits to companies choosing to do so. Whether you personally believe in man-caused climate change or not, once a company makes the transition to solar, it can proudly wear its commitment to the environment as well as the local community on its sleeve. “Green” businesses effectively join team “Earth” in the fight against pollution and the promotion of clean energy. This goes a long way in earning social approval or trust from customers, employees, shareholders, vendors, and really anyone choosing to do business with the company. Where a company that has not “gone green” can be perceived as a simply for-profit enterprise, green companies develop a broader, more appealing reputation.
Commercial solar systems also include the huge potential for corporate branding. Going solar has historically proven to be an invaluable image-building tool for companies that make the switch. Properly publicizing the fact that a company has “gone green” can lead to all sorts of attention, not only from customers but also from the media. Any and all methods can be utilized to maximize this publicity. Things like launch events, educational seminars, and inviting the public into a business to see the solar system at work are just a few.
Marketing benefits, like PR, are intrinsically linked to the switch to solar. A company that successfully makes the transition can then market its products as being backed by green energy. Where a company’s competitors might offer a near exact product or service, the “green badge” will often make the difference in a customer choosing one over the other. While more and more consumers become energy conscious all the time, there is an existing consumer base filled with these people that has existed for decades. It is a built-in benefit to the switch, and all a business need do is “go green” to tap into it.
Whatever your reasons, whether financial, environmental, or marketing driven, empowering your business to be more energy independent with a commercial solar system is a wise choice. It enables the business to operate on fixed energy expenses and provides the business with more flexibility to grow in the future, and that is the real power.