Learn what Solar Energy Storage is, how it integrates with the rest of your solar solution, and why it’s such a critical piece of your Energy Mix.
In the midst of a rapidly shifting social and economic climate, Velo Solar has deployed its team of experts to help companies plan for and adapt to change.
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The answer to this question is more complicated than most might think. It’s true that rooftop solar technology, specifically photovoltaic systems, have experienced a huge drop in price over the last five years along with a steady increase in system efficiency. For instance, solar arrays were being built for up to $12/watt for a commercial system back in 2007. Today we are seeing average commercial systems built for under $2/watt – that’s a reduction in price by a factor of 6 in just the last 8 years!
This reduction in price has ultimately driven market demand in the commercial and industrial sectors with the promise of an attractive payback through substantial energy savings. Though rooftop solar can seem like an attractive investment to many companies, it’s important to understand the feasibility of a potential project before diving too deep into the development phase. There are several criteria which can make your business a good candidate for rooftop solar.
Facility Ownership Structure
First and foremost, we like to understand our customer’s ownership structure regarding their facility. The best candidate is an owner-occupied building with a single electricity meter although multiple meters are not necessarily a huge obstacle. The second-best candidate is a long term building owner with either a single or anchor tenant under a gross lease structure.
Entity Type
Typically, we discourage any business with a 501C3 nonprofit status from going solar. This is because, as a non-profit, they do not have a tax appetite necessary to monetize the federal solar tax credit or accelerated depreciation. Since the tax attributes are some of the primary ROI drivers for solar, it is necessary that the purchasing entity qualify for these incentives.
Energy Profile
Another primary driver of ROI for solar projects is the retail cost of electricity from the grid. Since your rooftop solar array is offsetting this cost on a kWh basis, the payback will be directly proportional to the retail electricity cost avoided from the grid. In today’s market, solar power can compete with retail electricity costs above $0.10/kWh at a commercial scale. The scale of the project does play a part, meaning that a larger system may be able to yield an attractive payback even against retail electricity prices below $0.10/kWh.
Rooftop Conditions
One of the more obvious concerns businesses have with rooftop solar is the impact it will have on their roof. We look for several things when it comes to an adequate roof space for solar.
- No Significant Shading from trees, equipment or adjacent buildings
- Rooftop should be less than 12 years old
- Adequate space, free of rooftop equipment including safety anchors for window washing
Solar systems are compatible with just about any type of commercial rooftop and typically do not require penetration. Your solar EPC should work directly with your roofer to maintain your roof’s warranty after the installation.
Does my utility offer net metering?
Net metering is a game changer when it comes to solar. This basically means that your utility will offer to buy back any excess energy sent back to the grid at retail cost. This is not essential to generating a good payback, however it does play a role in how your system should be sized. Georgia does not currently have a net metering policy.
What should my payback look like?
A viable commercial project should have a payback between 2- 5 years at the most. In today’s solar market, any payback over 5 years should be indicative of an incompatible business profile for rooftop solar.
Conclusion
Before you decide to take your company solar, make sure to ask yourself the following:
- Does my business have the right ownership structure of the facility?
- Can my business qualify for federal tax credits and depreciation?
- What is my cost / kWh?
- What are my rooftop conditions?
- What are my utilities policies on buying back electricity?
- What kind of payback will justify my capital expense?
If the answer to these questions points to rooftop solar as a viable option for your business, it’s time to start getting estimates from your local solar provider. If you would like to see if solar makes sense for your business, give Velo Solar a call or visit our website at www.velosolar.com for a free estimate and solar energy assessment.
If you are thinking about using solar for your business, be aware of local policies which will affect how your system is engineered and sized to maximize your return on investment. When speaking to a solar provider, be sure to ask about the net metering policies with your state and local utility and how they will impact your ability to go solar.
Here are a few things to keep in mind when considering solar:
1. Do I live in a net metering state?
This will determine how your provider should engineer and size your array. A true net metering state requires utilities to credit their customers for all energy pushed back to the grid at a retail rate. This means that you can offset much more of your energy bill by avoiding daytime costs while offsetting remaining utility costs accrued during non-production times. In a nutshell, the bigger the system the better the return!
In contrast, if you are currently living in a non-net metering state such as Georgia, you should look to your solar provider to properly size your array to minimize the energy you push back to the grid. In states such as these, the utilities are only required to compensate their customer’s for electricity pushed back to the grid at a wholesale rate or “avoided cost” rate. This means your system size should be engineered to meet your peak demand, thus maximizing your ROI
2. Understanding My Peak Demand.
If you are living in a non-net metering state like Georgia, it is important to understand your peak energy demand in order to ensure you are getting the best return on your investment possible when going solar. Sub- meters such as Velo Solar’s PowerEnfo, allow you and your solar provider insight into your energy consumption patterns which include peak times of use and the frequency of energy spikes throughout the day. In addition to sizing an array to fit your facility’s energy production needs, this system also provides useful analytics which can lead to improved consumption behavior and uncover energy efficiency measures which can further lower your operating overhead.
3. How to maximize my ROI with Solar.
Once your solar array has been properly sized and engineered to meet your peak demand, there are a few extra steps which can be taken to further improve your energy savings. First- now that you know your consumption patterns, think about shifting some of your heavy equipment loads (HVAC, manufacturing equipment, lighting ext..) to times of maximum solar production during the day.
For Example: Instead of using your AC in the early morning to cool the building, blast the air during the heat of the day when it’s most needed. This will shift a large portion of your energy load to correspond with your highest solar production times thus maximizing your energy offset and ROI!
For more information on going solar or a free quote please visit www.velosolar.com
Here are 8 things you need to know.
By using solar power, your business saves on electricity you now buy from the grid. Less utility-provided power means lower power bills. When you invest in solar power, you control a meaningful portion of your energy use. And, depending on conditions, you may recoup your initial solar system investment in as little as three years. Because solar power systems can last over 30 years, you’ll see savings for many years. Here are the things you need to know when deciding whether solar is right for your business.
- Can I use solar to power my business?A solar system can power your entire business’ electrical systems, including lights, cooling systems, appliances, and equipment. But, remember that solar PV only produces power during the day. Your business probably needs power at night, too. While you can offset a significant portion of your electric power needs with a solar PV system, you’ll first need to consider how much sun exposure your building has, your daily energy consumption patterns, the condition of your roof, your current utility rate, and more.
- What size solar system do I need?Velo Solar will visit your site and evaluate the installation location for space and the amount of shade/sun. We also review your energy use. System size is usually determined using available space, energy demands and budget. Solar systems can offset a significant portion of your current energy costs and, in some cases, generate additional electricity that your utility will buy back from you, albeit usually at a reduced rate. Depending on utility buy back opportunities, we aim to offset 20-50% of your annual electricity costs. We also can help you evaluate your energy use and shift high-consumption activities to daylight hours using advanced monitoring technology.
- How long does a solar system last?Your system will continue to generate electricity for 25 to 30 years, although production declines 25% to 30% as the solar panels age. In the summer, high temperatures and humidity also can decrease output. Weather factors are considered when designing your system.
- What happens to my system during a power failure?If there’s a power failure, unless you have an independent energy storage system attached to your solar array, you will lose power. This is a safety precaution to protect utility technicians from being electrocuted as they troubleshoot power failures. The solar system only operates when grid power goes down if your system includes a battery backup designed to provide power to your home or business’s critical loads in such instances.
- Will I know if the system is producing electricity?Your inverter includes a display, which shows electricity production. Velo Solar also will set up a system that monitors your total energy usage and solar PV system output, then provides the information to you online. We can even install a display system in your operations center or lobby that informs anyone passing by about solar production, net energy usage and associated carbon offsets.
- Does a solar system require maintenance?Solar systems are very low-maintenance because they have no moving parts. Periodically, they may require cleaning to remove dirt, leaves and debris. Our PowerEnfo smart grid software monitors the activity levels of your solar system, so if something malfunctions, we can take action immediately to get you back up and running in no time.
- Are there incentives available?In addition to utilities’ buy-back programs and tax incentives offered by state and local governments, the IRS offers a business energy tax credit of 30% of the cost of a commercial solar system. You may also qualify for an accelerated equipment depreciation (MACRS) schedule. Check with your tax professional. Sometimes, depending on state and local incentives, the combined savings on rebates from government and utility companies can pay as much as 60% of your system installation cost. Our initial proposal will include these potential financial options. Click here to find policies and available incentives by state.
- What is Georgia Power’s current solar program?Georgia Power offers a solar energy purchase program to encourage new opportunities for solar development in the state. To learn more, click here.
