If you are a business owner or a representative of another type of organization such as a school or government agency, you might wonder whether it would be a good idea to install commercial solar panels. Is solar worth it?
The costs of electricity for many businesses are staggeringly high. There are several factors to consider when weighing the pros and cons of installing commercial solar panels at your organization.
Costs of installing commercial solar panels
You might think that installing commercial solar panels is out of reach for your organization. However, the cost of solar panels has fallen by approximately 80 percent since 2011. Businesses may also be able to access solar financing to pay for the cost of the panels and the installation.
Tax credits and accelerated depreciation
Organizations that install commercial solar panels are eligible to claim the federal Investment Tax Credit (ITC). This credit reduces the taxes that businesses pay dollar-for-dollar up to 30 percent of the amount invested. This credit has a planned phase out. In 2020, companies which install the systems may claim 26 percent. Businesses waiting until 2021 may claim 22 percent of the cost. Finally, companies that wait until 2022 and beyond can claim 10 percent of the cost of new systems. In addition, there is a federal MACRS depreciation tax benefit, which allows commercial solar customers to take the full depreciation benefit on their solar project in year 1.
Many states also offer tax breaks such as property tax exemptions to businesses that install solar systems. The availability of these credits vary from state to state. Please contact HOLT Renewables to identify which tax incentives may apply to you.
Performance-based incentives and rebates
Performance-based incentives are another benefit of installing solar systems. Some utilities offer such incentives, paid per kilowatt hour of a customer’s solar energy production for a set number of years. Other performance incentives include solar renewable energy certificates (SRECs). SRECs are given to solar customers for each megawatt hour of electricity that their panels produce. Businesses are often able to sell their SRECs on the open market, usually through their solar financing partner, to help their solar project make economic sense.
Some utilities offer rebates and other up-front cash incentives, making the business case for solar highly compelling. With these incentives the cash benefit is in year one of their solar project, in addition to the above-mentioned federal tax credits.
Hedge against fluctuations in electrical prices
When a portion of the electricity at your company comes from solar energy, it can help buffet the volatile nature of electrical prices, which are often determined by unpredictable fluctuations in the price of fossil fuel resources. Solar can also help your company hedge against inflation. When you install solar, you can reduce the uncertainty of fluctuating energy costs and better manage cash flow.
Beyond the tax and financial benefits, installing solar panels at your business or organization helps more than your bottom line. Solar energy is a renewable energy source and is clean. When you use solar, you can reduce your reliance on electricity that is derived from non-renewable sources such as coal. This helps your company to reduce its carbon footprint and mitigate its impact on the environment, and demonstrates environmental responsibility.
Today, corporate concern for the environment is more important than ever. Your customers might prefer to do business with green, or environmentally responsible, companies. When you install commercial solar panels, not only will you save money and reduce your corporate carbon footprint, but you’ll build goodwill for your brand, and your reputation in your community and with employees as you develop a mission of sustainability.
Learn more about commercial solar
Learn more about the benefits of installing a commercial solar system at your business or organization by contacting HOLT Renewables today. We have substantial experience in completing large commercial solar system installations. To get a quote, request a site assessment here or call us at 888.846.8653.