Commercial solar energy systems can help businesses lower their electricity costs by a significant amount. They can also give businesses a hedge against increasing utility rates, which can be helpful in supporting long-term financial stability. Businesses that invest in commercial solar panels can take advantage of various federal tax incentives. This includes the Investment Tax Credit (ITC) and a number of accelerated depreciation benefits that can lower the net cost of installing commercial solar panels.
How Installing Commercial Solar Panels Reduce Operating Costs
Paying monthly utility bills can leave businesses with nothing to show for their investment. By installing commercial solar panels, they can move away from renting their electricity to owning a long-term energy asset. Whether they’re directly installed on your property or are generated off-site, solar energy will allow you to take control of your energy so you can stabilize your long-term cost.
Options for Installing Commercial Solar Panels
You have two options when it comes to installing commercial solar panels. You can either go into a Power Purchase Agreement (PPA), or you can purchase the system outright. You need to do a cost-benefit analysis so you can understand the potential savings, your return on investment (ROI), and the overall financial benefits of installing solar panels on your commercial building.
The Pros and Cons of a Power Purchase Agreement (PPA)
A PPA will allow you to lower your electricity rates without the upfront cost of buying a solar system. A third party owns and maintains the system while you purchase the power it generates (usually at lower rates than what’s offered by local utility companies).
PPAs will allow you to go solar without putting any money down. It will also allow you to avoid the responsibility of maintaining the system. But because you don’t own the solar panels, you won’t be able to claim the Investment Tax Credit (ITC) or any depreciation incentives.
The Pros and Cons of Purchasing a Commercial Solar System
Installing solar panels on your commercial building can be a game-changing investment, but you need to know about their advantages and disadvantages before moving forward. Here are some of the benefits of purchasing your own commercial solar system:
- Significant Cost Savings — They can lower your long-term operating costs by reducing or even eliminating your electricity bills.
- Environmental Sustainability — They can reduce your carbon footprint while supporting clean energy initiatives.
- Revenue Potential — They will allow you to generate additional income, because you can sell excess energy back to the grid where net metering is available.
- Positive Brand Image — They will allow you to improve public relations by showcasing your commitment to sustainability and innovation.
- Energy Independence — You’ll be able to protect your business from rising utility rates, which can improve your energy resilience.
- Eligibility for Incentives — You can access the 30% federal Investment Tax Credit and any accelerated depreciation benefits.
- Long-Term Financial Stability — They will allow you to lock in predictable energy costs for decades, which can make you more financially stable.
- Increased Property Value — Commercial buildings with solar panels usually have a higher market valuation.
Despite their advantages, commercial solar panels have the following drawbacks:
- High Upfront Costs — Purchasing commercial solar panels will require you to make a large capital investment.
- Sunlight Dependency — Solar panels are more suitable for areas that get a great deal of sunlight, so you won’t get as much output in cloudier climates.
- Space Requirements — You may need a large roof or land area for your solar system to meet energy demands.
- Aesthetic Concerns — Some businesses may be concerned about how their solar panels affect their building’s appearance.
- Maintenance Needs — While the requirements are minimal, they will still need regular maintenance. Eventually, the components will have to be replaced.
- Regulatory Complexities — Permitting, inspections, and utility interconnections can make the installation process harder and more time-consuming.
A number of studies have shown that solar power systems can increase the value of a home, so the same is probably true for commercial properties. Properties with solar panels are cheaper to maintain because the energy costs will be lower, but you must have solar panels on the commercial building to improve its property value.
If you’re looking for one of the best places to get commercial solar power in Corpus Christi, be sure to get in touch with Solar Power Integrator. We have a team of professionals with years of combined experience, and they would be more than happy to speak with you about your specific needs!