Can you think of any businesses that don’t need electricity to operate? My list starts with “barbershop quartet” and ends with “child’s lemonade stand”. It’s pretty shortlisted. Electricity is a crucial requirement of almost any business, and its one that you can safely bet isn’t going away anytime soon. Businesses use much more electricity than homes, and the costs can add up quickly each month. It would be great if your business didn’t have to depend on electricity to function, but that’s just not in the cards. Once you recognize that your electricity needs are here to stay, the next question becomes: “If we can’t eliminate our power needs entirely, can we eliminate or reduce our energy costs?”
That’s why so many businesses are turning to solar energy as a means of controlling their energy costs. This trend is expected to continue, despite the fact that the Federal Investment Tax Credit for solar systems is set to begin its decline in 2020. Outlined below are some of the top reasons why commercial solar is a great investment for businesses.
- Electricity can be a big expense for businesses. With a solar system, businesses can compartmentalize their energy costs and make them more predictable. This is achievable through financing options that spread out the cost of the system over a fixed period of time, thereby stabilizing electricity costs. Unlike volatile utility prices that can be raised year after year, solar financing allows companies to forecast their energy costs for decades out.
- Of course, the percentage of a company’s power usage that can be offset with solar depends on the available space. Even if a business can’t get all the way to 100% offset, any solar power at all can help shave down the sum of the utility bill.
- In many places throughout the US, switching to solar can actually save businesses money on their energy costs from day one. This is because the cost of installing solar has dropped so much, that solar power can actually cost less than utility power in some areas.
Boosted Building Value
- Adding a solar system means adding a physical asset to your building. Like any other asset or renovation, a solar system increases the appraisal value of a building.
- Not only can you increase the value of your building with solar, but with enough solar panels, you can actually become a net exporter. That means that you’ll produce more electricity than you use, for which you’ll be paid by the utility. Of course, this is only a possibility if there’s enough space available to offset your business’ usage first.
- When your business converts to renewable energy, you can leverage your new green identity with your customers. Many consumers appreciate environmentally responsible companies. By switching to solar energy, you can signal to your customer base that your business is a forward-thinking one.
- One of the reasons solar has become so competitive with other energy sources is the ITC (Investment Tax Credit). The ITC is a mechanism intended to promote the adoption of solar energy. It was originally proposed over 10 years ago, and it’s already been extended once.
- The Tax Credit is good for 30% of the cost of a solar system for the rest of 2019. Then in 2020, the value of the ITC drops to 26%. The next year, it will decline further to 22%. By 2022, the ITC for commercial solar projects will settle at 10%, where it is expected to remain. For residential solar, the ITC will be eliminated entirely in 2022.