Commercial property owners and businesses of all sizes are getting squeezed by rising energy prices and the declining reliability of the aging US electric grid infrastructure. Business owners know that money spent on electric bills or lost during an outage can quickly impact the bottom line. Many business owners are also making commitments to reduce or eliminate their carbon footprint and solar power is one of the most visible and approachable ways to do this.
The average commercial property owner needs a way to reduce energy costs and improve resilience.
A commercial solar panel system can do just that.
3 Reasons to Invest in Commercial Solar Panels
A commercial solar panel installation isn’t just for big businesses like Apple, Walmart, and Tesla any more. Those giants of industry may be in the news for their big plans to generate solar electricity, but as the price of solar has dropped (over 30% in the last five years!), this alternative source of energy is becoming more mainstream.
Lower costs make commercial solar accessible to companies of all sizes including car dealerships, manufacturing facilities, hospitals, agriculture, and more. When you consider the many benefits of solar power systems, you’ll see how they can benefit your business.
Here are three of the most important reasons:
1. Solar Power Can Reduce Operating Costs
Energy costs are often one of the most significant line items in a company’s budget. One of the most impactful benefits of integrating solar power into your energy mix is that you’ll improve your monthly cash flow.
Generate your own renewable energy
First, solar energy can improve your bottom line. Depending on the size of your solar array, you could generate all or at least a significant percentage of the energy you need to run your operations. The less electricity you pull from the grid, the lower your utility bills will be each month because you’re generating your own electricity. Buying electricity from a utility is like renting your energy, but a solar system on your roof is owning your energy. This generates significant long-term savings just like owning a home versus renting.
Many manufacturing businesses have demand charge tariffs on their utility bills. That means you’re charged more for the electricity you’re pulling from the grid during peak hours. Those peak charges could make up a significant portion of your electric bill. A solar system that typically produces peak power at the same time can allow you to mitigate or avoid these charges all together through a process known as peak shaving.
With battery storage, peak shaving is enhanced by allowing your system’s controller to proactively adjust your power mix to use more of your own solar-generated electricity during peak hours. This decreased demand for grid power during peak hours means a smaller electric bill. There is no better way to put you in control.
Your commercial solar system can help control future energy costs
Solar panel systems also make your energy costs predictable today and into the future. As noted earlier, by generating your own renewable energy on-site and employing peak shaving practices, you control how much electricity you pull from the grid. That control makes budgeting easier because you’ll have a better understanding of what your utility costs will be from month to month. And your solar energy helps to mitigate future utility price increases, allowing you to hedge inflation and remain in control.
If your solar power system is equipped with a monitoring solution like Velo Solar’s POWERENFO, you can also track your energy usage and energy savings over time. Understanding how your business is using energy will help you identify large, problem loads and reduce or eliminate them. It also helps you to make informed decisions about adding more solar panels as your business, and your energy usage, grows. We help customers design a plan that matches their current and future energy needs and grows your solar power system as your business grows.
2. A Solar Power System Provides Resilience
The second key benefit to investing in solar is that it provides your business with resilience. In the case of an electric outage caused by severe weather or other natural disasters like wildfires, your solar system can keep the critical components of your business up and running. Imagine you’re a business owner and a hurricane is forecast to make a direct hit on your business. If you have solar power and battery storage, you can evacuate with the confidence that your business’ critical electrical systems will continue to function normally until power can be restored.
3. Installing Solar Panels Is Good For Business
As more companies announce Environmental, Social, and Governance (ESG) initiatives and set goals to reach carbon neutrality or even net-zero carbon emissions, the pressure to follow suit will increase up and down the supply chain.
Companies want vendors that are reducing their carbon footprint
Businesses that invest in solar find that their commitment to clean energy gives them a competitive advantage when bidding for contracts and new business. If your potential clients are looking to reduce the carbon emissions associated with their products, you can help them do that by reducing yours.
Consumers want to buy from brands that are reducing their carbon footprint
Sustainability is also a hot topic among consumers. If you’re selling directly to the general public, a solar array on your rooftop can improve your brand image and attract new customers.
Is a Commercial Solar Installation Right for Your Business?
You may be wondering if solar can really power your business. The answer is yes! Upon completion, Tesla’s new Gigafactory 1 in Nevada will be fully powered by solar panels. Apple is also partnering with a local utility in Nevada to construct a 200 megawatt solar farm that will power the company’s largest data center.
Commercial solar installations aren’t one-size-fits-all
There are many ways to approach solar installations. Your solar system should be customized to meet your needs and grow with your business, so it’s best to work with a knowledgable commercial solar provider that can guide you through the process and help you to determine what’s best for your individual situation, regardless of system size.
Factory and office building roofs are ideal locations for solar arrays, if for no other reason than there’s a lot of unused real estate up there. Solar canopies and carports are also great ways to bring solar to your facility, and the covered parking is a nice perk for your workforce. Another alternative is a ground-mounted array.
Regardless of where your solar equipment is installed, it’s built to last. Solar power systems are reliable and require very little maintenance. That said, it’s important that your solar power plant be monitored and regularly inspected to ensure the long lifespan of your valuable solar asset, and the best ROI.
Federal tax credits can reduce the cost of your solar system
Some business owners might be concerned about whether the benefits of solar outweigh the costs. The answer is typically yes! And there are tax credits available to tip the scales even further in your favor.
There are a number of federal, state, and even local government incentives available to commercial businesses investing in solar. The Solar Investment Tax Credit (ITC) provides a 26% federal tax credit for projects started in 2022. For projects started in 2023, the credit will be 22%. In 2024 and thereafter it will be 10%.
The ITC also allows for accelerated depreciation, which can reduce the overall cost of a commercial solar installation by an additional 20-30% in many cases.
There may even be state and local tax credits that you can leverage to reduce the initial cost of your solar power system.
There is no better time to take control of your energy future! Let Velo Solar help you Re:Power your business.