You already know solar panels help reduce the consumption of fossil fuels, and that’s certainly a good thing. But how does it pencil out financially? After all, going green only makes sense if it saves green, as in dollar bills.
Let’s crunch the numbers to determine if investing in solar is right for your business.
Solar is Just for the Big Guys, Right?
Auto manufacturers, big-box retailers, and software companies have embraced solar in a big way. Corporations such as Whole Foods, Intel and IKEA have been championing the technology as both a wise business maneuver and conscientious environmental decision. While it’s cool to see recognizable brands harness the power of the sun, this might send the false impression that solar is only for major companies that can afford it.
That may have been the case at one time, but no longer. The price of solar has dropped dramatically in recent years. In fact, it’s cheaper now than it has ever been. The cost of an average-sized residential system is about $18,000, down from $40,000 in 2010. The price of commercial installations has also seen a sizable decrease.
The solar panel marketplace EnergySage estimates the average price of a 25kW solar panel system is about $50,200 -- feasible for many small business owners. That’s why 2018 was the second-largest year for commercial solar installations, according to the Solar Energy Industries Association.
In other words, you don’t need to be Walmart to go solar.
Yeah, But What’s the ROI?
In California, the average solar payback period is about six years. Of course, there’s the upfront cost to consider before you begin reaping the benefits. Fortunately, programs are in place to help defray the cost.
The Federal Investment Tax Credit allows businesses to deduct 26% of the gross installed cost of a commercial solar project. That means a $15,000 solar panel system could earn you a $4,500 tax credit. (If you want to take full advantage of this deal, hurry. The deduction shrinks annually.)
You may also be eligible for performance-based incentives, which allow you to sell excess energy back to your utility provider. Also, consider the added bonus of shielding your business from volatilities in electricity prices. In other words, no more fluctuating energy bills so that you can better manage cash flow.Bottom line: We’re just scratching the surface of what’s possible when you make your business green. To get a better understanding of the benefits of commercial solar energy, contact JP Electric &Solar at (559) 464-6048.