Employing solar power in your business is a great way to cut operating costs and reduce your carbon footprint. Most nonprofits, governments, and companies know this and commercial solar accounted for a third of solar power generation in the United States from 2009-2021.
Commercial Solar
Solar panel installation in the industrial and commercial sectors is known as commercial solar. This covers everything from solar power use in farms or plants to solar panels for homes. Also, it isn’t limited to just businesses, nonprofits, and government agencies but installations can also include:
- Parking lots or garages.
- Retail outlets and shopping malls.
- Daycare centers and schools.
- Clinics or hospitals.
- Warehouses and factories.
- Vineyards, farms, and ranches.
- Commercial office buildings.
Placing And Installation
Commercial solar systems can be installed almost anywhere and easily integrated into different settings and structures. This is quite different from residential solar panels, which are only fixed on roofs, ground-mounted in solar farms, or used in utility-scale plants. They can be installed:
- In artificial lakes and ponds (floatovoltaics).
- On pole mounts.
- In parking shades and carports.
- On patio covers, pergolas, and gazebos.
- In sheds and barns.
- On flat surfaces.
- On rooftops of commercial buildings.
Cost
Commercial solar panel systems are typically priced at $1.45 per watt. This is half the cost of residential systems, which can cost $3.06 per watt.
System Size
Average price figures can mask large distributions in prices. For instance, the cost per watt is guaranteed to increase due to the economies of scale. Other factors like difficulty in installation, location, and type of mounting system can also impact prices.
Benefits
Commercial solar panels come with a set of benefits and incentives that attract nonprofits, businesses, and governmental organizations to go solar:
- Rapid payback period.
- Green credentials.
- Many financing options.
- MACRS depreciation.
- Electric bill offset.
- Solar incentives and tax credits.
Rapid Payback Period
You can have a solar payback period of two to three years if you reap all the benefits from utility bill savings, MACRS depreciation tax benefits, and incentives. This is a short period since solar panels are designed to last around 25 years. Imagine the savings you’ll have after those 2-3 years. You’ll be enjoying free electricity early on in the panels’ lifetime.
Flexible Financing Options
Financing can be done in three ways:
Power Purchase Agreement (PPA):
The power generated by the solar system will be fixed at an agreed rate between the solar installer and the homeowner.
Solar Lease:
You will rent solar panels from a solar company at a fixed monthly rate.
Solar Loan:
You are taking off the loan of purchasing solar panels with monthly installments for 5-20 years. You will only benefit from the tax credit with a solar loan. Solar loans usually provide the best return on investment and are the most sought option for financing solar systems.
MACRS Depreciation
MACRS, or the modified accelerated cost recovery system for solar energy equipment, usually has a five-year cost return period. With this, businesses don’t have to pay large tax liabilities for their systems in their first five years. This is beneficial since solar panels have a warranty of 25 years. You can also use the solar tax credit with MACRS. This will decrease the asset’s cost by 85%.
Electric Bill Offset
Organizations can offset 100% of their electricity bills through commercial solar power systems. This is made easy by installing a grid-tied system. This system enables excess power to be exported to the grid to earn credits, ultimately reducing the bill. With net metering, you can even earn for the electricity you export. Having a complete electric bill offset means:
Free Electricity:
After the solar panels are paid off, you can enjoy free electricity.
Positive Cash Flow:
Most organizations can notice this from the first month (loan repayments cost less than the bill savings).
Utility Rate Hikes:
Being independent with your power consumption and production means you will be unaffected by price fluctuations.
Production And Consumption
Commercial solar panel installations have an alignment of consumption and production energy habits. This is because many organizations need energy during the day, which is when solar panels produce power. This eliminates the need for a battery to store energy, reducing payback periods and upfront costs.
Solar Incentives And Tax Credits
The solar tax credit or the clean energy credit equates to 30% of the cost of installing a solar panel system. You can explore the solar tax credit by reading the guide offered by the Department of Energy. Local governments, utilities, and states may also offer additional incentives other than tax credits, which is a bonus, so always keep an eye out for incentives available in your area.
Green Credentials
To have a successful business, you must listen to the people. You should know what they want and what they feel strongly about. Businesses that learn to do this can survive easily in the competitive market. Climate change is one such issue that we all feel strongly about. Companies need to know what their customers want to promote that product and earn more profits.
With climate change, they can show they’re more responsible for making sustainable products that don’t harm the environment. A good way to do this is to equip themselves with solar panels to promote an eco-friendly image. Most big companies have realized this and installed many solar arrays to power their buildings while promising a transition to clean and green energy.