Clean energy isn’t just for large corporations with enough capital to make decisions solely for the environmental good. For many business owners, going solar can be a strategic decision with significant financial benefits. If you’re wondering whether solar is a feasible option for your business ask yourself these 4 questions.
1. How much do you currently pay for electricity?
By some estimates, the average commercial property owner saves 75% on their electricity bill by switching to solar, but there are numerous online resources available to estimate how much money your business can save on its electricity bill each month. This information can also help you determine your payback period, or the amount of time it takes to break even on your solar investment. The higher your electric bill, the less time it will take for the system to pay for itself, so businesses operating in places with high electricity rates can realize considerable economic gains from investing in solar PV.
2. Choose your equipment wisely
The amount you save by investing in a solar PV system depends on a number of factors, including the size and orientation of your roof and the efficiency, durability, and reliability of the equipment itself. Higher-quality photovoltaic panels that increase your upfront cost may end up saving you more money in the long run by reducing maintenance costs, improving productivity, and increasing the lifespan of your system overall. On the other hand, you may find that the most expensive panels don’t necessarily translate into the greatest savings for your particular needs. Be sure you’re working with a solar provider who can help you navigate your many options based on purchase and installation costs, power capacity, and how long your solar panels are expected to last.
3. Compare your financing options
Solar can be a smart investment with a strong rate of return, but financing a solar energy system is a complicated process with many variables. Cash purchases yield the greatest savings at the greatest upfront cost. Those interested in reaping the benefits of ownership without purchasing their system outright can finance the purchase with a solar loan, which allows you pay off the cost of the system through fixed monthly payments. For some business owners, it makes more sense to rent their solar PV system with a solar lease, or power purchase agreement (PPA), which brings immediate savings with little or no money down, although monthly payments on a solar lease or PPA usually increase at a predetermined rate every year.
4. Consider short-term cost vs. long-term savings
To determine their true return on investment, business owners should consider the long-term benefit of going solar beyond its initial cost and immediate savings. In addition to considering your purchase or renewal options, federal tax incentives, rebates, corporate tax credits and other state tax breaks all factor into the short-term cost of going solar. Thanks to increased financial incentives and lower installation costs, the price of solar has decreased in recent years while electricity prices continue to rise. Investing in solar can help stabilize your energy costs and save you from the rising and often fluctuating price of electricity purchased from a utility. In many cases, solar can even increase property value, enabling you to see additional financial gain down the line.