Solar Power for Businesses: An Overview
Businesses don’t always think about including solar power systems as part of their financial
strategy, but they should. It’s a great way to reduce costs and increase profits.
More often than not, electricity costs are a significant operating cost for a business.
They increase every year, and generally, they are increasing at a higher rate than inflation
Benefits of Solar: By installing solar power systems, companies
can either significantly reduce or eliminate their electric bill for 25 years or more.
Installing solar protects your business from rising electricity prices and makes it possible
for you to forecast these expenses accurately. As a result, you greatly improve your ability
to manage your budgets and expenses over the long term.
Solar is also a great investment. Your business can earn annual returns on investments that
exceed 30% or more with minimal risk. In other words, you can recover your investment in
a solar panel system in about 3 years.
There are environmental benefits, too. For every kilowatt of solar panels you install,
your business avoids about 1 ton of carbon emissions every year. That’s roughly the
same as planting 20 trees every year. Additionally, your solar panels are a visible sign of your
company’s commitment to sustainability and to the community in which you operate. This
visibility often translates into significant brand and marketing advantages.
Incentives to Install Solar: Over the past few years, solar panel prices
have fallen dramatically. Now they are cheaper than ever. The investment tax credits available
to you can reduce your initial investment —generally by more than 50%. The federal
investment tax credit covers up to 30% of the total installed cost of your system. Keep
in mind, that this isn’t a deduction—it’s a dollar for dollar credit. Businesses also
benefit from accelerated depreciation provisions. Your business can write off 85% of the system’s
cost over the first 6 years, reducing your overall tax burden significantly.
Additionally, some states offer Solar Renewable Energy Credits or SRECS that allow your business
to earn additional income for the solar power it generates—even if you use the electricity
to power your own operations.
Solar is Affordable for most businesses: Today, solar is affordable for most businesses.
If you want to maximize the returns solar delivers to your business, paying for your
solar panels upfront (either with cash or via a loan) is the way to go. This allows
you to take advantage of generous tax credits and other incentives that are often tied to
ownership of the system.
For those that prefer NOT to invest capital upfront or those with limited tax liability,
there are several attractive leasing options. These include operating leases, capital leases,
and power purchase agreements (PPAs). Each option helps to significantly reduce your
electricity costs without any upfront investment.
These financing methods require little or no money down and the monthly savings on your
electric bill exceeds the monthly lease or PPA payments. In other words, your investment
in solar is cash flow positive from Day 1.
Whether you choose to own or lease your solar power system, your business will still be
able to hedge against electricity rate increases and gain more control over its utility expenses.
Installing solar onsite frees up significant amounts of cash — cash that can be reinvested
to support future business growth. Solar will improve your bottom line, make your business
more competitive, and fuel future success.
Solar power systems deliver tremendous value to your business. Now is the time to start
shopping and the EnergySage Marketplace is a great place to start.Through the EnergySage
Marketplace, your business will receive multiple quotes from our network of pre-screened installers.
The Marketplace provides you with apples-to-apples comparisons of all the different quotes you
receive across all of your financing options. The Marketplace makes it easy for you to evaluate
the quotes and choose the one that best meets your needs and financial objectives.For more
on financing options watch our next video, Financing Your Business’ Solar Panel System.For
more information about solar or to start shopping visit www.energysage.com.