How many solar panels do you need?
Is it possible to install enough solar panels to provide sufficient electricity to run your business? There is a basic formula, but you’ve probably already guessed it – the process involves much more than calculating the number of solar panels you need to generate the kilowatts necessary to replace your reliance on the local electric company. And maybe your use of solar energy shouldn’t disconnect you from the grid, after all.
Many organizations have discovered that solar energy is a supplement rather than a substitution. It reduces or stabilizes the cost of energy consumption, which impacts your bottom line. Solar power today also offers a different kind of value to companies. It makes a very public statement that shows your commitment to sustainability, and there’s a business case to be made.
It’s no longer a future kind of thing
The United States Environmental Protection Agency (EPA) reports that 74 of the Fortune 500 companies utilize solar energy or a combination of renewable energy sources. The combined consumption is more than 32 billion kilowatt-hours (kWh), equivalent to the electricity use of just about 3 million American residences. Some of these companies produce a surplus of electricity.
These companies must demonstrate value to investors, which means that installing solar energy systems had to show a strong financial return on capital investment.
The average commercial property owner has a monthly electricity bill of approximately $1,950. They see a 75% reduction after the installation of a solar energy panel system, providing a monthly savings of $1,433.
Solar makes dollars and sense
There are plenty of myths about renewable energy such as solar. One of the biggest is that it’s expensive. The cost of solar panels has dramatically decreased. It’s estimated that by 2020, the electricity created by all sources of renewable energy will be less expensive than conventional sources of energy.
Companies are taking advantage of these lower prices and combining the savings with the Federal Investment Tax Credit of 30% of the cost of the system. Accelerated depreciation also allows you to take a deduction of nearly 85% in the earlier years of this capital asset.
A total replacement?
After doing the research, some companies decide to install solar panels to generate power which offsets what they would otherwise purchase from their local utility company. The decrease in operational expenses and tax incentives is a prime motivator. They remain tethered to the power grid, though, and here’s why.
The first step toward solar power may not be a complete replacement. Many states have mandates in place that specify energy companies must provide their customers with a specific amount of electricity generated by renewable energy.
Companies receive performance-based incentives from the utility company in the form of payment for solar electricity generated. It’s returned to the utility company through the grid. Other companies elect not to make the capital purchase of a solar system. Instead, they participate by subscribing in a solar farm or solar garden programs. These are multiyear solar power purchase agreements where businesses purchase solar energy that is generated off-site. These agreements can lock in electrical rates for as much as 20 years.
These solar farms (smaller installations are called gardens) are collected to the national electrical grid and deliver the solar energy to public utilities. Depending on the need, this energy is either stored or delivered to customers. The utility can claim this solar energy contribution as part of their mandated delivery requirement. Businesses and residents that subscribe to the solar farm or garden program receive a bill credit for the energy consumed. It’s an efficient loop that benefits everyone, but it doesn’t require the upfront cost of purchasing solar panels.
All solar roads lead to savings
Solar power is now within reach of every business owner. Use this database to explore incentives available based on your location. You have more choices in its use than ever before, and each option offers a benefit that ranges from lower operating costs to customer goodwill.