Most recognize the importance of addressing climate change by reducing the levels of carbon dioxide in the air. One of the largest contributors to these greenhouse gases is electric power generation. Installation of a solar PV system can produce renewable energy, reducing dependency on carbon-based power.
Beyond the environmental benefits of solar energy, there are significant business benefits that accrue from an investment in solar.
One of the most substantial costs of operating a business is the cost of electricity. Some commercial and industrial facilities are significant consumers of electric power to support their manufacturing operations. Reliance on the commercial power grid means that the business is subject to electric rate fluctuations. In many cases, during peak demand periods, rates are extremely high. What’s more, sudden price increases add uncertainty to your business, especially to your cash flow management.
Now is the time to reduce your dependency on the grid, lower your overall electricity costs, and increase the predictability of your operating expenses.
Solar power has become a mainstream alternative energy source in America. Fortune 500 companies are receiving much publicity from their conversion of their buildings to solar energy. But you might question if solar energy is affordable for small and medium sized businesses like yours. The answer to this question is YES.
Over the past several years, advancement in solar technology, competition among solar equipment providers, and government tax incentives have combined to make solar a solid investment.
Clean and sustainable energy for the environment
Reduced reliance on energy derived from fossil fuels or nuclear
Reduced carbon dioxide ---- over 1 ton/year/kW of solar vs. coal
Reliable, noiseless, and pollution-free electricity generation
Reduce or eliminate utility electricity bills
Levelized Cost of Energy is significantly less than utility electricity rates
Locked-in low electricity costs for decades while avoiding utility inflation
Net Metering ensures 24/7 availability of your solar production
Tax credits and rebates accelerate payback
Investment Tax Credit (ITC) 26% through 2022
Accelerated and bonus depreciation for businesses
Section 179-eligible equipment for full federal depreciation in first year
Utility incentives may also be available including Xcel Energy's Solar Rewards program
Enhanced property value and marketability
Solar generates decades of cash flow for building owners, increasing property value
Solar investment are not subject to MN sales tax or property tax
Advance sustainability objectives while attracting more customers, employees, tenants or investors
The Solar Investment
Making a decision to invest in solar requires much the same financial analysis that you would conduct on any major capital investment. The benefits you seek from this investment can be substantial.
Cut Overhead Costs. EnergySage market data suggests that the average commercial property owner in the U.S. can reduce overall energy costs by 75 percent by going solar. According to the report, the average commercial property owner paid $1,950 in monthly electric bills before going solar in their operations. This saving begins immediately after converting to solar power and continues at that rate for the remainder of the system’s average 20+ year life.
Longevity and Sustainability of Solar Energy. Commercial electrical power is a commodity. It’s bought and sold based on supply and demand. When you draw from the power grid, you’re subject to current market forces and user rates. You’re not protected from future costs. That’s because futures are unpredictable. By converting to solar energy, you’re making an investment in the future of your bottom line. Like the stock market where investors bet on future markets, you can hedge your electrical bet by installing a self-contained solar generation system. With solar power, you benefit from lowering your electrical consumption cost and protecting your company’s future.
Predictability. You’ll also get financial reassurance with solar power. When you’re self-sufficient or semi-sufficient on solar power, you’re less vulnerable to billing spikes and inflation. Being dependent on the commercial power grid means you’re at their mercy for seasonal or supply shortage cost increases. You’d also be protected from the inevitable inflation as electrical bills keep climbing, year by year.
Solar Tax Benefits. Probably the biggest reward you’ll get by converting to solar electric power is tax benefits. All levels of local, state, and federal governments support the move towards renewable, clean and efficient solar power. To show their support, they offer some beneficial tax incentives and financial assistance programs.
Federal Investment Tax Credit (ITC): This United States federal government tax relief allows you a 26% CREDIT applied against your taxes payable, which is based on the overall cost of your solar power system for systems installed in 2021 and 2022. This credit was scheduled to phase out but has recently been restored under the current administration. But there is no guarantee what will happen in the future. The time to act is now.
Accelerated Depreciation: You’re also entitled to accelerated depreciation on your solar energy equipment. This is through another federal government program called the Modified Accelerated Cost-Recovery System (MACRS). While typical equipment depreciation tax deductions normally spread over the entire life of the products, the MARCS initiative allows you to write off your total solar panel system in the first year. This significantly improves your cash flow and the ability to finance your solar power installation.
An Investment with Continuous Financial Returns. While the cost of a solar PV system may initially seem high, it is an investment that will continue to benefit your bottom line. In the short-term you benefit from tax and depreciation incentives. At the same time, your system is generating power that lowers your overhead expenses. A solar installation can also increase the value of the property that it is installed on, a valuable yet hidden benefit.
Let us work together to design the optimal solar system for your facility. We will do the detail financial calculations for you so that you can evaluate the significant benefits that solar will deliver for your business.
Contact us now for your custom quotation.