In the USA, commercial enterprises utilize 40% of energy consumption, with up to 50% of this usage frequently going to waste. To reduce these stats, companies are increasingly wising up to the perks of solar power.
Wawa, Target, and other household names have made headlines recently for their investments into this energy source. By making the switch, these businesses have boosted their self-sufficiency, utilized renewable resources, and tapped into numerous other benefits. However, this technology isn’t just for big-name brands, and it also has merit for varying types of commercial entities:
- Enhance Your Customer Appeal
Green energy is a hugely popular concept these days; everyone wants to be doing more for the planet. Market research shows that customers are becoming more aware of environmental initiatives and prefer to choose service providers and suppliers that use sustainable energy sources. A recent study showed that 88% of consumers would remain loyal to a company that has embraced eco-friendly initiatives.
If you can demonstrate that you’re using fewer fossil fuels than your competitors and show a year-on-year increase in your use of renewable energy, you’ll be appealing to a vast consumer base. Even if you start with just a few panels and then add more, your display of commitment to saving the environment will be appreciated.
- Boost Employee Satisfaction
Not only does green energy appeal to the modern customer, but many employees too. Your eco-conscious workers will feel confident clocking into a company that’s working hard to be environmentally friendly. Plus, they’ll be willing to put more energy into their jobs as they’ll be happier in their workspace, thus improving your bottom line.
- Claim Solar Power Tax Deductions
One of the biggest selling points for solar panels (also known as photovoltaic or PV panels) is that they offer tax deductions. The 2018 tax changes in the United States mean that the cost of solar energy systems is now fully depreciated from your taxable income within the first year of installation.
These deductions can save companies thousands of dollars. If that weren’t enough incentive, businesses are also provided with a federal investment tax credit (ITC). Your ITC will amount to 30% of your system’s total cost, including all material and labor.
For example, if you spend $100,000 on a PV system, you’ll get a $30,000 federal tax credit and an additional $85,000 as a tax write-off. These numbers make good business sense, no matter what size your enterprise is.
- See Cash Flow and Profit Increase
When companies use PV panels for power, their cash flow and profits increase due to the Solar Renewable Energy Certificates (SREC) initiative. Under this plan, home and business owners can sell certificates for units of energy to participating utility companies.
The SREC initiative falls under the Renewable Portfolio Standards (RPS) state laws that require utilities to produce a certain prescribed amount of power from renewable sources. Since the legislation exists at a state and not a federal level, the specific regulations vary according to where your company is based.
You need to check that SREC applies to you, but with almost 30 states along with Washington, DC having their own RPS, there’s a good chance that you’ll be in line for some substantial earnings. One Solar Renewable Energy Certificate is paid out for every 1000-kilowatt hours (kWhs) – known as megawatt-hours (MWhs) – that your panels produce.
In some states, SRECs are worth up to $300. Most Renewable Portfolio Standards have what is known as a solar carve-out, meaning that a minimum of the renewable energy they buy must come from photovoltaic power – so they are legally obligated to purchase SRECs.
With this rebate program, you’re virtually guaranteed to generate extra income for your business. Home-size solar panel systems produce between five and eight MWhs per year; commercial systems can be much larger and produce far more. When this money is added to the significant savings on your company’s electricity bill, the numbers get even more impressive.
- Enhance Real Estate Value
Adding a PV panel system increases the real estate value of your property. Even if you don’t currently have any plans to sell, it’s always good to know that your property value is in the upper price bracket. If you plan on taking out a mortgage to expand, improve services or weather the storm COVID-19 has brought, you’ll be in a much better position to do so. The higher the valuation of your property, the more favorable lenders will be.
The increase in real estate value is also excellent news for Commercial Real Estate (CRE) developers and investment property owners. Renters are attracted to homes that use solar energy in the same way that business customers and clients are, so it’s possible to charge them a higher rate.
Many tenants opt to renew or extend their leases based on the fact that renewable energy is utilized. As well as raising the monthly rentals, photovoltaic panels in CRE establishments and complexes can reduce utility expenses and increase Common Area Maintenance (CAM) reimbursements.
System Installation Guide
When it comes to installing PV panel systems in your commercial properties or business premises, you have several options. To determine the best course of action, you’ll need to do some research and ask yourself a few crucial questions. Ultimately, you need to get quotes from trusted suppliers, and a quick Google search can identify the best-priced options in your area. You can then compare costs and system setups to ascertain what would benefit your business the most favorably.
As with everything else in contracting, you’ll need to make sure that the design and specific equipment both meet specific codes. Before your energy system goes live, you’ll have to pass inspections and obtain permits to ensure it’s in line with building and electrical codes. Local government requirements do vary somewhat, but in general, you should expect to file for structural, electrical, and possibly a dedicated solar photovoltaic permit.
Less reliance on the grid and fluctuating power prices make good sense for any commercial enterprise, and PV panels allow you to achieve that. When you add in the tax breaks and increased cash flow, installing commercial PV systems is even more of a no-brainer – and that’s before the environmental benefits are considered.
