Solar Panels for Business
Solar power has become a widespread energy option for many businesses. In the last 10 years, the solar market has experienced 42% growth in the United States, with expectations for further growth in coming years. Businesses are taking advantage of the many benefits of solar power and investing in improving their current energy source.
This article explains why your business should consider solar and the financial benefits of solar energy.
Why Your Business Should Go Solar
When businesses go solar, they’re making a worthwhile investment since solar energy can help them save on monthly energy costs. While there will be some investment from businesses to set up the technology, the return on investment (ROI) makes solar energy worth it.
Solar power usually locks electricity costs into place for many businesses, reducing unreliable energy expenses. Consistent energy costs make budgeting and future planning easier for businesses.
Newly installed solar panels also make businesses eligible for a solar investment tax credit (ITC), which returns 26% of the cost of the system. Businesses can also qualify for accelerated depreciation, where they can deduct 85% of solar cost installation from their taxable income in the first few years.
By saving money on energy costs and taking advantage of the tax credit and accelerated depreciation, many companies see a significant ROI on their investment.
Solar Power Benefits for Businesses
If you’re looking to convert your business to solar power, it’s essential to evaluate your current energy situation and weigh the advantages and disadvantages. Solar energy is a long-term investment, and you should make your final decision based on the benefits solar power can provide to your business. The main benefits include:
- Saving on utility costs: Utilities can be costly for many businesses. Converting to solar power can reduce or eliminate your overall energy costs. It also becomes easier to predict future energy costs and lowers operating costs, saving you money and allowing you to allocate funds to other business ventures.
- Energy storage: Installing additional solar panels where you have extra space and access allows you to store retained energy for future use. This stored energy can be used in emergencies or, depending on your state, you can sell the excess energy to the local power grid. This is an excellent way to make a passive income and create funds for new projects or ideas.
- Green reputation: Solar energy is a form of clean energy that reduces greenhouse emissions and lessens the dependence on fossil fuels. When you use solar energy, consumers view your business as a pillar of the community and globally conscious. When people view your business respectably, they’re more likely to want to work with you.
- Increased property value: Your property’s value often increases when you install a solar system. As solar power becomes more popular across the United States, buyers are looking for properties with solar systems already installed. If you ever decide to sell your property, you can potentially set a higher asking price due to your solar system.
- Reliability and low maintenance: Solar systems are relatively low maintenance once installed. They are built to withstand the elements and rarely break down. If they do, they’re usually easily accessible for repairs by your solar provider. You can rely on your solar system to provide you with sustainable energy for years to come.
- Long-term ROI potential: Solar energy can save or make your business money in several ways. You’ll pay less on utility costs, increase your property value, spend little on maintenance and may be able to sell excess energy. Over the years, you’ll save more money than you would with other traditional energy sources, giving you an excellent return on your investment.
Commercial Solar Financing
The price of solar panels has decreased over the years, and they’re quickly becoming more affordable than ever. If you’re considering installing a solar system on your commercial property, you have multiple options for financing to get you started.
Cash and Loans
If you’re looking to take advantage of the tax incentives and appreciated depreciation, paying for solar panels with cash is the best option for businesses when possible. The current rate for the ITC is 26% but will be decreasing to 10% by 2024. Now is the perfect time to act to get the most out of the ITC.
Cash payments mean you need access to capital, which some businesses might find challenging. Instead, you can combine cash with a low-interest loan from the bank to finance your solar system. Loans have the quickest and best ROI potential, apart from a full cash purchase.
Leasing
Leasing requires a higher monthly payment and doesn’t translate to immediate ownership of the solar system. A third-party financier will own the system, which you can choose to buy outright at the end of your lease. Lease terms can vary, lasting as few as seven years and as many as 25 years.
There is no guaranteed way to tax advantage of the tax incentives and accelerated depreciation with a lease. However, the third-party owner could pass these benefits at their established rate.
Power Purchase Agreements
Power purchase agreements (PPA) can be used to finance solar installations. With this agreement, you’ll only pay for the power that you generate. Your energy rates will typically be locked in at a lower price than what traditional utility companies can offer.
Like leasing, you can’t take advantage of tax incentives and depreciation with a PPA. A third-party financier owns the system, and while they can pass these benefits to you through an established rate, not all third parties offer this option.
Installation Process
The installation process for solar systems typically follows these steps:
- Site evaluation: Once you’ve decided to move forward with solar panels, a professional will evaluate the location to ensure the property has the right build to support the system. During this time, they’ll also determine where the solar system will connect with the local power grid, conduct a shade and structural analysis, and do topographical and geological surveys.
- System design: Your solar provider will draw up the system’s design using the information collected during the site evaluation. The design will show where the panels will be mounted and arranged to capture the most sunlight. You’ll have a better idea of how the system will look on your property once the design is complete, and it will act as a blueprint for the construction phase.
- Construction: After the design is complete, construction can begin. The process will vary based on size and project type, with smaller systems taking two to three weeks and larger systems spanning multiple months. It’s essential to prepare for potential disruptions, such as temporary shutdowns or alternative parking for guests. If you work with a reputable and experienced solar installer, they can help you reduce the likelihood of disruption.
- Commissioning: Once construction has finished, the solar provider will confirm that your system was installed properly and connected with the local power grid. They’ll also ensure that the system is operational.
- Operation and maintenance: Maintenance will be needed to increase the life span and efficiency of your new system. Your chosen solar provider will likely offer inspections and monthly performance reports to ensure your system is working as it should. Some providers will also provide routine cleanings and warranty repairs if your system becomes damaged.
The commercial solar installation process is different from residential installation. Residential systems will typically take a few days to complete, while commercial systems will take at least a few weeks.
Go Solar With Lippolis Electric
Solar energy is quickly gaining traction among businesses as a sustainable energy source with fewer associated operating costs. At Lippolis Electric, we offer high-quality commercial solar panels and services to help you make the switch from traditional power. Our professional staff will help guide you through the entire process, working closely with you to manage your planning, budget and site work.
If you’re ready to make the switch, look no further than Lippolis Electric. We offer some of the best solar panels for commercial use and are dedicated to bringing your business a long-lasting, sustainable energy solution. Contact us today to learn more about our services.