The unpredictable cost of grid electricity can be a substantial drain on a business’s bottom line. It can also make forecasting energy spend very difficult. As a result, more and more businesses are capitalizing on the financial opportunities of solar power.
With photovoltaic (PV) panels installed at your facility, the amount of expensive electricity your site requires from the utility grid is reduced. Instead, solar PV panels generate electricity on-site, using clean and free sunshine, lowering your reliance on the grid. This allows your business to reduce its operating costs. With lower business expenses, you’re able to keep a much larger portion of revenues as profit.
In other words, going solar can dramatically improve your bottom line. But the benefits of commercial solar power don’t stop there.
Better still, your energy savings from solar only grow with time. By installing solar PV panels today, you enjoy immediate utility bill savings – and thus, immediately higher profits. This is because utility rates keep trending upwards – even with oil prices at historic lows and natural gas capacity at an all-time high.
By contrast, sunshine remains the same price forever. It is as free today as it will be 5, 10, or 25 years from now. While some businesses may struggle to keep up with rising grid prices, businesses who install solar are tapping into an abundant energy source that helps shield them from future rate increases.
This can be a powerful competitive advantage – especially if you operate in an industry with narrow profit margins.
By installing solar power to provide sustainable electricity for your business, you benefit from immediate utility bill savings that only grow with time. Installing a storage solution alongside your solar PV installation can further maximize your energy savings, boost resilience against utility prices, and further your competitive advantage.
Your electricity bill is comprised of 2 parts:
1.) Energy charges (kWh) for the amount of energy your business uses
2.) Demand charges (kW) for peak usage
While solar power provides a solution to lower your energy charges, demand charges can constitute a significant portion of commercial and industrial customers’ total electricity costs. Adding storage capability to your solar PV installation offers a way to provide relief during peak times.
This solution can optimize your energy costs and provide you with an advantage over the competition. While they are forced to reduce their energy consumption from the grid during peak times to avoid high-cost demand charges, businesses with Solar and Storage installed on their property can instead draw their power from stored solar energy that their PV system generated onsite and use it to power their businesses needs during these peak hours.
As a result, installing solar PV panels on your commercial property and combining it with a storage option can offset a much larger portion of monthly electricity bills than if you installed solar alone, as it can have a positive impact on both portions of your energy bill.
Many businesses believe that an energy solution like this must require a large capital investment. That is not exactly the case.
If you have the funds, financing your solar PV system with cash is the best option. This approach makes solar an investment – one that pays for itself in the form of higher savings and profits.
Moreover, there are numerous incentives that are designed to make going solar even more affordable than it already is. In addition to the Business Energy Investment Tax Credit (ITC), you can also take advantage of incentives at the state and local level, which our team can help you navigate.
With net metering, for example, you can sell excess solar electricity to your utility provider in exchange for credits. It’s also possible to generate another revenue stream from your solar PV installation by cashing in on solar renewable energy credits (SRECs). Incentives like Connecticut’s ZREC program allow you to convert sunshine into cash.
But what if you don’t have the capital – even with the help of federal and state incentives? No problem. There are several other ways to affordably finance your solar investment:
1.) Commercial Solar Loan: Commercial solar loans provide you with the upfront funds to pay for a new solar PV installation. With this option, you use your company’s monthly utility bill savings to pay down the loan until you have 100% equity in your system.
2.) Commercial Solar Lease: With a commercial solar lease, you receive a new solar PV installation with no capital outlay. The upfront cost is $0, and you only pay for the low-cost solar electricity generated from your rented solar PV panels.
3.) PACE (Property Assessed Clean Energy): PACE financing, sponsored by state and local governments, offers the same benefits as a solar loan. The main difference is that repayments are made through annual property taxes instead of from corporate earnings. Programs like Maryland’s CPACE are ideal if you don’t have the credit rating required for traditional solar loans or leases and you want to finance your solar PV installation without incurring any upfront costs.
No matter which financing approach you use, going solar can help you save money and boost the profitability of your business.
However, there are some additional benefits of commercial solar power. In the next installment, we’ll look at how installing solar PV panels can enhance your corporate social responsibility efforts.
In the meantime, schedule a no-cost solar evaluation with our team today to learn more about commercial solar savings and incentives and how they can boost your profitability.